The coronavirus pandemic or the COVID-19 has ushered an eclipse on the businesses, both global and domestic. The Indian businesses are facing a sharp nose-dive in their revenue generation, thus affecting the growth. The nationwide lockdown and the severe travel restrictions have hit the transport, logistics, hospitality sectors and many more. No industry around the world is immune to the harsh impacts of the invisible virus. Instead of the curve being flattened, it is continuously soaring higher, causing long term effects on the economic, social, industrial and psychological conditions of the masses. The financial crunch is faced by all the organizations, irrespective of their sizes and market share. The small businesses, entrepreneurs and gigs are facing the highest tide of problems, including scarcity of funds, lack of seed-stage funding and venture capital.
India was under strict lockdown measures since March, but halting all the economic and industrial activities for months cannot be a permanent solution. The sluggish recovery rate is imminent. McKinsey has reported that, “India’s GDP in the first quarter of the 2020–21 fiscal year could shrink by 20 percent, compared with the same quarter last year. The World Bank projects that full-year GDP will contract by more than 3 percent. India’s unemployment rate, which stood at 8.4 percent before the lockdown, rose to 27.1 percent in April.”
The global economy is under crisis, as the pandemic has embraced every nation within a span of few months, and weeks even. Business analysts and experts have noted that the governments around the world have already devoted more than $11 Trillion to revive the economy from the steep downfall. These measures have succeeded in many ways. But, the investment has not covered each and every aspect reeling under the negative effects. The two questions that can come in our minds about the huge amount being invested are ‘Is the money enough, or do we need more? Is the invested amount being utilized in the best possible way?’ The governments are trying hard to pull up the economic conditions. The Indian government has invested crores for supporting the small businesses, MSMEs and gig economy.
Due to the pandemic, the businesses of India and also of the world will undergo some swift transformations to be resilient to the changing market landscape. The metamorphosis is noted primarily in 3 layers:
- Consumer Behaviour
- Technological Developments
- Business Models and Strategies
These three dimensions are transforming swiftly in these uncertain times. Dive in to decode this ‘change’.
Businesses Affected by Changing Consumer Behaviour
The pollution level of the capital city of India was alarming. The sunlight used to get overshadowed as the city remained enveloped by the tremendously thick smog. Some preferred masks, while others did not mind breathing the air. Then, a new pandemic cropped up, that made wearing masks mandatory. The new list of basic needs of people is food, water, clothing, masks, sanitizers, gloves, hand washes, PPE kit, health & hygiene products, organic products for strengthening immunity.
As witnessed by Kearney experts, “The naturals and organics trend has been gaining traction in India’s CPG space, with an overall CAGR of 18 to 25 percent despite the substantial premium that comes with these products. COVID-19 will fuel health-focused demand as consumers move toward prevention: seeking immunity from consumables, hygiene from personal and home care, and chemical-free from personal care. Health and hygiene will fuel the transition in consumer preferences from private labels to known brands.”
On the psychological front, human beings are more prone to feeling low and depressed to a certain level as they are under quarantine and social isolation. Even though the restaurants and malls may open, consumers will be hesitant to go and visit these public places. The fear of the pandemic is supreme in everyone’s minds, and they will not be getting out like the pre-COVID era. In such a scenario, they will be inclined to purchase something online or order food online. This coping mechanism to fight against stressful situations is known as ‘retail therapy’. The eCommerce platforms are becoming the new favourite spots of the masses. They will indulge themselves in purchasing something of their choice to elevate their moods.
During the lockdown, the online platforms like Swiggy, Zomato, and Amazon etc had to face tumultuous times. The consumer demand was nullified during the lockdown. The businesses were hit adversely. Swiggy had to sack 1000 employees for the humongous decline in revenue. But, post lockdown, these businesses are changing their strategies to gain the trust of the consumers. In the present situation, users are more attracted to quality and safety than discounts and free delivery. The fear of Coronavirus loom large, but the users want to elevate their moods as well. So, the eCommerce platforms have resurrected with new safety measures and quality assurance techniques. The businesses are shifting from the previously implemented ideologies to cater to changing consumer demands and behaviour.
Re-shaping Business Models and Strategies
Drawing reference to the previous point, in order to cater to the changing consumer demands, the businesses have to refurbish the existing models and strategies. The businesses have started reforming balance sheet and cost management for being resilient at the face of the uncertainties. The COVID-19 pandemic has challenged the debt financing and revenue prospects of businesses, as the costs remain the same. Many large scale organizations have expressed their anxiety regarding the constraints of servicing debts and shrinking revenue. The pandemic has compelled to transform the Future of Work. The businesses are now planning for data-driven operations that can be monitored remotely. The new system of “work from home” used to be an occasional luxury, but now it became the new normal. It is imperative for the businesses to assess the fixed and variable expenses, actual revenues, cash flow, financial metrics, credit cycles, sales, debts etc.
For stabilizing the businesses in troubled waters become all the more crucial, and the agile workforce is driving this change. The qualified employable resources, business experts and consultants are “rising to the challenge, helping people and organizations navigate massive workforce shifts, such as the urgent need to shift to a remote workforce to protect and empower employees, serve customers and to establish business continuity. For example, the now critical need for virtual care messaging and visits in healthcare.”
The businesses are planning for cost control, deciding on the operations that must be kept ‘in-house’, while the rest can be outsourced. Several organizations, like large IT firms, are inclined to hire expert professionals on-demand basis for better cost management. The companies are looking for professionals who can be onboarded based on project requirements and their domain-specific experiences. Task-based recruitment has gained momentum in recent times. In case you are wondering, how to kick start your career as a professional consultant, contact us to know more.
Incorporating Technological Advances in Businesses
The pandemic Coronavirus has accelerated the incorporation of tech advances and disruptions in businesses. Virtualizing operations and setting offices at home hint at higher digital dependency. “The McKinsey Global Institute estimated in 2019 that such technologies could create some $1 trillion of value in India alone. For example, equipping the IT-BPM industry with digital technologies such as artificial intelligence (AI), analytics, cloud, and cybersecurity could yield $205 billion to $250 billion of gross value added (GVA) in 2025, roughly twice the $115 billion achieved in 2017–18.”
The businesses are digitalizing sales and marketing, supply chain management, customer experiences, manufacturing and operations. Several traditional organizations are triggered to inculcate the latest tech advances for ensuring agile remote working. Improving employee experiences, along with securing the business operations from the breach is of prime importance. The companies with efficient remote working procedures can save considerably on physical locations. This can help them in reducing overheads and facing the inevitable economic slowdown. Using cognitive technologies like Artificial Intelligence, Machine Learning, Internet of Things (IoT), Blockchain technology, Big Data, Cloud Computing etc are being incorporated in businesses for improving agility, productivity and developing risk assessment techniques. The workforce has to be niche skilled and well acquainted with technological advances. A collaborative environment, where the humans and machines work together, is knocking the door. Automation and Digitalization are the new methods to drive business diversification and value creation.
Takeaway
The times are changing, and uncertainty is the only constant. The changing market landscape and consumer behaviour will impact the business to a great extent. The pandemic has acted as a catalyst; bring fast-paced metamorphosis to the Future of Work. In case you are wondering, what steps and strategies must be implemented for your business, you can get all your queries cleared from our expert consultants. To know more, reach us NOW.