Fear and greed are big drivers of action. For half a decade, businesses spent billions of dollars trying to motivate change through greed. They offered deal after deal and covered page after page of newspapers trying to get consumers to change behavior and shop online. Then along came COVID and pulled on the string of fear. Fear of infection caused by interaction. Consumers no longer needed crazy offers to try to buy online, they simply needed to know that they wouldn’t get sick. And so now everyone is transacting online. E-commerce order volume increased by 36% in the last quarter of 2020. People are buying more than just books and electronics online. They are buying essentials, medicine, fashion, food and everything in between.  India’s e-Grocery market witnessed a 73% CAGR over the past year.

We saw fear driven adoption in 2020 and will see convenience and value driven growth in 2021. Consumers have experienced the benefits of product discovery and the ease of access to a breadth of products, that will make going back to the “old way” seem like moving into the Stone Age. Investments in technology and fulfillment infrastructure has driven a 1.5X jump in NPS across categories. The 1.1 million digitized consumer are making growth equitable by helping SME and homegrown brands scale.

This massive fear driven behavior change has enabled businesses to achieve scale commensurate with the market sizes they have been going after.  Pre-COVID, businesses suffered from an imbalance in capital raised vs revenue scale. This has now changed. Rebel Foods is now a $150MM annualized revenue company operating in 7 countries with 3500 internet restaurants across 395 kitchens. Melorra has scaled to $50MM in revenues with the lowest CAC we have ever seen in the business. Scale is larger, profitability metrics are better, customer acquisition cost is lower. Things in India happen Gradually then Suddenly. We are in the Suddenly part now and the party is just getting started.

Like many parties thing are going to get crazy. We are going to see a flurry of IPOs. New age companies are going to buy out old world businesses. Traditional businesses will double down on product and distribution expertise while beginning to invest more aggressively in new technology enabled channels. Fundamental financial analysis will give way to exuberant optimism. With war chests of capital available, companies will continue to invest in creative ways to optimize labor and automate processes. All of this will happen in the backdrop of an ongoing pandemic that will continue to accelerate the fear driven shift in consumer behavior. Over the past year and a half the pandemic has had a positive effect on businesses and the operational efficiencies they have come to realize are here to say. Changed behavior that is delivering benefits at both a consumer level and a business level, are going to continue. All of the changes and growth that we expected to see in the consumer tech space for the past decade are now happening and at Lightbox we are excited to be one of the hosts of this great Indian technology party.