While the overall economy has taken a hit, some sectors have converted this threat into an opportunity and are set to see immense growth in the post-COVID era.
Gaurav Mohan, Indrani Sengupta
Covid-19 has not only had an impact on the health of people at large, the economic damage that it has rendered and will continue to render may be more damaging than the disease itself. During the course of this pandemic, businesses continue to be significantly impacted, liquidity remains tight and so does the scale of operations. New strategic alliances or business partnerships are dwindling during the period. COVID-19 has certainly impacted the Indian economy to a great extent. The government is focussing on meeting hyper demand for essential items like healthcare infrastructure and facilities while non-essential items are seeing a steep decline. On top of that, the restrictions on movement imposed by the Government for the purpose of containing the virus have forced many sectors to pull their shutters down.
Even though the recovery of the underlying economy will be slow, but now most sectors have accepted this to be the new normal. While the overall economy has taken a hit because of the government lockdown, some sectors have converted this threat into an opportunity and are set to see immense growth in the post-COVID era.
Digital & Internet Economy: During the course of the pandemic, people have started using digital medium for work commitments, education, and entertainment. Online platforms for work meetings have seen a massive rise in popularity. , Meeting and Video calling Applications have come up with innovative features making it conducive for professionals to work from home. This has also facilitated Schools and universities to start online education and assessments. The lockdown has restricted events that require a massive gathering of people like sports, music festivals, theatre, movies etc. resulting in these sectors taking a hit. Due to which online platforms for digital content has become a huge hit with many movies and shows seeing digital release instead of theatrical release. Due to lockdown, this sector has really seen a boom time like never before.
FMCG & Retail: This sector has seen a growth in this tough time. With continued fear of complete lockdown, food-based retail chains and essential commodity providers have emerged as winners. Given the heightened need of healthy food and immunity-boosting products among consumers have further broadened the scope for the companies in the product segment. These companies are revamping their growth strategies with a focus on providing a value proposition to consumers in existing categories, launching new products in the food and health categories, enhancing the direct distribution reach in the rural market, door to door services, etc. which will help them to achieve the growth in the medium term. By this, companies have been trying to broaden their product portfolio and reducing dependence on seasonal offerings.
Leading brands like Dabur, Patanjali, Zandu and other organic brands have launched more products and variants in the health food segment. The lockdown and social distancing requirement has forced consumer behaviour to shift from eating outdoors to home-cooked food or ready to eat items. Also, the deadly virus has led to the growing need for quality immunity building products like chawanprash and immunity-boosting health drinks. A number of these initiatives were already in the queue but as per the situation demanded these companies have taken the opportunity for the expansion and launched new products.
Specialty Chemicals: Increased need for cleansing and sanitation has catapulted the demand for hand sanitizers, disinfectants, and surface cleaners. India’s largest fast-moving consumer goods (FMCG) companies have rolled out a range of home cleaning, disinfectants, and personal hygiene products as they anticipate a surge in demand for such items amid the COVID-19 crisis. Companies such as ITC Ltd and CavinKare have rolled out surface disinfectants. ITC has launched a Savlon-branded surface disinfectant spray, after a hand sanitizing liquid, Savlon Hexa. Also, Marico Ltd announced to launch of ‘Veggie Clean’, a fruit and vegetable wash.
Also, the increased demand for the disinfectants, drugs, and medicines due to the pandemic, has given an opportunity to the organisations manufacturing chemicals required for manufacturing these. Hence organisations dealing in chemicals are expected to see a spike in demand owing to increased demand for disinfectants, drugs, and medicines by the customers.
Healthcare Sector: Healthcare sectors have faced hardships owing to the lockdown and all non-emergency treatments taking a back seat. But this sector shall see immense investment in the aftermath of the pandemic. The world would now realise that the threat of a pandemic is very real and investment in the sector to safeguard will be done in the near future. The rife spread of the virus has warranted people to take precautions to save themselves from this deadly disease. Demand for certain medical devices like oximeters, Personal Protective Equipment (PPE) kits, and masks have seen a rise as infected patients with mild symptoms under self-care and isolation need these basic devices for self-monitoring.
The market to the above-specified sectors is expected to see growth owing to this pandemic. Some are converting this into an opportunity by changing their product mix. New brands are coming up with essential supplies like hand sanitizers and disinfectant cleaners. While these brands are taking advantage of this opportunity, established brands that have built trust over the years are leading through this rat race.
The world has seen something like never before. The COVID-19 crisis has ultimately lead to an emergence of new FMCG products, a change in consumer behavior, and a shift in the market’s focus on health protection and hygiene. In order to get the business and economy back on track, the companies are moving forward by taking the situation of the pandemic as an opportunity. Some are coming up with innovative ideas and resultantly getting the first-mover advantage, whose impact will entertain a long-lasting impact on the market.
For the survival of the business, growth plays a vital role and it depends on its internal environment and external environment. The internal environment is the strength and weakness of the business entity whereas the external environment lists all factors which affect the business which is uncontrollable. The trick lies in playing with the uncontrollable factors eventually budding them into opportunities.
Gaurav Mohan is CEO AMRG & Associates, and Indrani Sengupta is Manager, AMRG & Associates. Views expressed are the authors’ personal.