The coronavirus outbreak is first and foremost a human tragedy, affecting hundreds and thousands of people across the globe. It also has a growing impact on the economy in India. With these facts, arises some inevitable questions.
When can we expect COVID-19 to kneel?
What would be the economy in India once it succumbs?
Would there be Progression?, Stagnation?
Only time will tell!
Depression has hit India by December 2019. The economic conditions were coming down at pace. GDP growth accounted to be the lowest in six years and the fiscal deficit was not in control. It is evident the newfound pandemic is tearing up the economy beyond imagination.
It's expected that after the fifth stage, the COVID-19 spree would come to an end. Just the way China has rebounded, we can expect all nations to bounce back. Although the economic conditions after that can be anything.
In this scenario, there can be three possible economic curves;
1. V-shaped economic curve :
In a V-shaped economic recovery curve, the economy suffers a sharp economic decline but quickly and strongly recovers forming a 'V' curve. Such recoveries are generally spurred by a significant shift in economic activity caused by increased consumer demand and spending. We can look forward to the V-shaped curve in the future(If lucky enough).
2. U- shaped economic curve :
U- shaped recovery charts a U shape, established when certain metrics like GDP, employment and industrial input gradually decline and, rise back over time(pretty long time). Unemployment becomes
a major concern in this type of curve.
3. L- shaped economic curve :
This is one of the most dangerous outcomes. L- shaped recession depicts a steep decline in economic growth and doesn't recover for a significant period of time forming the shape of an 'L'. In an L - shaped economy, the recovery can take a decade or more.
Among these scenarios, businesses can fall under three sections.
The business sectors bagging immense profit and survives taking advantage of the loopholes of recession falls in the category of winners.
Some steps like Amazon opening 100000 new job openings during corona can be seen as a way towards the top. A Chinese company, JD.com added much more of their innovative 'unmanned' vehicles to their stash after doing a meticulous job in 'Wuhan' by delivering essentials through drones. E-commerce sectors have a huge advantage in coming days.
Video conferencing companies like skype, zoom, cisco Webx gathered their share of profit by work from home action plan adopted by corporate.
The non-cyclical business wouldn't get affected by any sort of recession as they deal in consumer essentials such as grocery, cosmetics, medicine, alcohol etc. In a way, we can say the sun never sets in this sector.
The industries affected majorly by the pandemic and face irrecoverable losses constitute this category. The comeback of industries like Cruise, Airlines, Travel, Tourism, and Construction can take much time. The construction industry in India was already a wreck. With the corona blow, survival can be tedious. ( Did you know, almost 6 lakhs buildings in India are UNSOLD after complete construction?!).
Traditional retail businesses can also expect the hit due to social distancing and panic.
Business sectors like Banks, health-care, manufacturing, etc can sway either side. They can be on the winning or losing sides depending on the economic sensitivity.
Post the crisis, there is only one question that matters to all.
Can you adopt new technology and new process fast?
To be clear, most businesses in India are traditional and caters local market. To overcome the challenges post-crisis, marketing strategy has to change, the implementation of new technology should be done, Accepting a new way of processing the business also can be crucial.
Local vendors and small sector businesses should try to take advantage of online platforms. Take your services online by making your own website and securing a place in the web world for yourself.
Restaurants can take up online orders by getting listed in online portals like zomato, swiggy (competition can be high) or you can make your own website and promote towards desired customer base to face the economy in India.
Salons can take their service online and provide the service at the doorstep of the consumers.
These are some examples of sectors adopting new tech and processes.
" Plan for the best Prepare for the worst."
Every problem comes with solutions. To survive one must keep the spirits and hopes high, develop the capacity to accept new technology and ideas.
This time shall pass soon. Take necessary steps towards development of the business and self.
More than anything stay safe during the perilous times.