Probably the last straw of distress, disturbance, down- turn , and misery of the Overall Economy.. !
When we consider India and track the past few years , it will show a rigorous downfall , recession all over, considering it a textile , banking, or pharma whatever the sector you choose there was no phenomenal improvement or upturn seen. Looking to today’s scenarios when worse have become the worst we can say that its “Always Darkest Before the Dawn .” Right now we are in the darkest possible situation that one could have ever imagined and hopefully we will come out of this together in the most awaited dawn..
is changing due to Covid-19. I am not here to tell you that same story, but to
look beyond the current news cycle. Which fundamental shifts are here
to stay, how will they turn industries upside down, and which strategic
options do you have to go on offense.
going into lock down, and businesses across the globe are operating in fear of
an impending collapse of global financial markets. This situation, clubbed with
sluggish economic growth in the previous year, especially in a developing
country like India, is leading to extremely volatile market conditions. Let’s understand
how the corona virus is impacting business and subsequent tax reforms in India.
rates, and fiscal deficit, the economy in India has seen better days. Adding
fuel to this fire is the novel Corona virus that is sending tremors down Indian
trade markets dependent on China for imports
India originate from China. These imports have already slid down to 40% in
light of the coronavirus outbreak and subsequent lockdown. As a countermeasure,
India is considering the promotion of indigenous production in a bid to reduce
dependency on a single market. Additionally, China is India’s third largest
export partner for export of raw materials like organic chemicals, mineral
fuels, cotton, etc.; and a lockdown of the countries is likely to lead to a
substantial trade deficit for India.
industry is of significant concern for India, mainly as 70% of active
pharmaceutical ingredients (API) are imported from China. These active
pharmaceutical ingredients are essential to a large number of pharmaceutical
manufacturing companies in the country. As COVID-19 is rapidly making its way
through India, medication is going to be the number one consumer demand, and
because there aren’t nearly enough APIs to manufacture drugs, the subsequent
traders and the market are witnessing skyrocketing prices. The prices of
vitamins and penicillin alone already see a 50% surge.
historical tourism, attracting domestic and foreign nationals throughout the
year. It does not come as a surprise that a large number of confirmed COVID-19
cases in India include foreign tourists. But with visas being suspended and
tourist attractions being shut indefinitely, the whole tourism value chain,
which includes hotels, restaurants, attractions, agents, and operators is
expected to face losses worth thousands of crores. Experts believe the tourism
industry is likely to take a massive hit, and it could end up crippling the
industry for the foreseeable future.
After the Government of India
indefinitely suspended tourist visas, airlines are said to be working under
pressure. Nearly 600 international flights to and from India were canceled for
varying periods. Around 90 domestic flights have been canceled, leading to a
sharp drop in airline fares, even on popular local routes. Private airport
operators have requested the Government to grant permission to impose a nominal
passenger facilitation charge on airfares to cover the increased operating
In the final stage, whether a bear market goes into overdrive or recovery, cheap starts delivering positive absolute performance.
This isn’t a story that just applies to traditional Value.
Cheap assets generally behave in this triphasic manner. The unwind of the Tech Bubble showed that pattern holding, for instance, in regional asset allocation.
The silver lining is, of course, that we can add to cheap assets, such as Value stocks within Europe, UK, and Japan (MSCI EAFE) and U.S. corporate credit, at significantly more attractive levels than we could before.Emerging markets, to us, are even more compelling, especially when we analyze this year’s price action.
Every crisis serves as a learning opportunity for organizations, and this pandemic is proving to be quite the lesson. Here’s how organizations are figuring out their next moves.
Why our world will be very different.
In search of positive change.
The learning curve
• Limited gatherings
• Hygiene requirements
• Remote working
• Mixed work/life
• Access to e-commerce & logistics
unprecedented shocks are still unfolding.
some form of (temporary) lockdown.
followed by mass bankruptcies, bail-outs,…
laws fuelled by existing xenophobia & populism.
time will now accelerate to become more immediate behavior change.
anxiousness/loneliness and depression
more isolated, will lose their job, get confronted with sickness, face
relationship issues,… if not all at once.
tremendous need for (remote) therapy and coaching. Certain regions already see
a rise in demand for pets and animal companions. Also, online social games/tools
are booming. (e.g. Houseparty, Discord,…).
designed for new use cases. e.g. Online Dating via Zoom anyone?
people and products
consumers and organizations are becoming much more careful about the people and
products they interact with. Both people and organizations will expect formal
proof of hygiene and current health status.
packaging redesigns, sharing of personal health records and temperature,
retail/ hospitality formats with free service add-ons focused on cleanliness,
Preference of science forward products over ‘natural’, Contact-free deliveries
within a country
biggest impact as an industry. Travel feels like a risk for consumers who may
not be able to get back to their home, or are unsure if they’ll be covered in a
foreign land should another outbreak occur.
flourish of course. Traveling abroad might be only worth the effort for longer
extensive holidays, taking a period of quarantine into account. Potentially
combining travel with remote work. The rural and remote will become luxury
beyond typical office jobs
individuals and families figure out new ways to balance their work-life needs within
the confines of their space.
will reduce office space and infrastructure. Expect setups at home that go far
beyond a second screen. People will bring in special equipment, machines, and
advanced video/audio setups to accommodate this change in lifestyle. Policies
and new insurances will need to follow.
at all levels
operating in survival mode. While doing so, many might breach contracts or regulations
along the way.
already showed a spike for “Force Majeure” (superior force). Legal battles will
pop-up everywhere. At the same time, lawyers are shifting to a digital way of
working. This will trigger more tools to automate legal work to operate at
career, as switching to another struggling competitor in the same industry is
not even an option.
training will see a peak. At the same, many might switch to an entrepreneurial
side business to boost their family budget. Both options will bring valuable
experience once the economy catches on at a later moment in time.
distributors will need to switch to delivery and/or remote-first. Regular
retail will not vaporise, but evolve.
delivery solutions (e.g., drop off points for frozen/cooled food). More
advanced supply chain optimizations. (e.g. multiple shops bundling deliveries
to the same household or street).
interaction with +65- year-old people will be severely restricted. People will
need to rethink social gatherings.
will be accelerated quite soon, it will be the normal day-to-day activities
that will need to be redesigned. Special retail options? Tweaked
ceremonies/rituals (e.g. large weddings). Rise of communities for those with
special needs or of a certain age.
significant part of who they are. Mixing work and private life debunks this
superficial layer. Only now many are getting to know their colleagues at a
deeper level, 1 live stream from their bedroom at a time.
fashion is one element to shape and communicate your preferred identity. When
there is less physical interaction, digital altering of your video interaction
can partially replace this. (Notice how Twitch streamers are customizing their
‘live stream room’). More experiments with digital alter egos will pop up.
packing many people in tight spaces, there is no light at the end of the tunnel
(cruises, theaters, events/festivals,…)
booths or human-free interactions (e.g. robot waiters). One way out could be
the rise of a new consumer segment with an official health record to prove an
immune status. Would you market only to these people? This would be uncharted
territory for most industries.
organizations have had no choice but to dig into their business continuity and
contingency plans. Ever since the first COVID-19 case was
confirmed in India, numerous companies have instituted a ‘work from home’ drill
using critical resources to understand whether remote working conditions are
feasible. That being said, remote working also has its limitations and cannot
be carried out by other sectors like retail, hospitality, or manufacturing,
leaving them no choice but to face business interruption.
hour. Still, with no experience of dealing with a virus that has the potential
to spread rapidly, most companies are brushing off their hands by asking
employees to stay home. Some organizations, however, are implementing measures
like temperature screening, disinfection of office premises, setting up COVID-19
response teams, distribution of COVID-19 precautionary packages.
COVID-19 is lower than the 1918 influenza pandemic, it has caused a widespread
panic due to unclear lines of communication. Organizations are stepping up and
maintaining an open line of communication with all their stakeholders,
including employees and customers.
economies are becoming cognizant of the risk they face by being overly
dependent on one market. Making the current situation a learning opportunity,
CXOs of Indian multinationals, who recently attended the annual meeting of the
Confederation of Indian Industry (CII), believe this is the time India can work
on capturing potentially 40% of their competitor’s market share by looking at
indigenous production of goods, furthering the country’s Make in India campaign.
Sources : GMO Publications
Board Of Innovations
Banking And Finance