Page 20 - IMDR EBOOK 20 OCT 2020

"Pandemic and Beyond: Naviga ng the New Normal" E - Book Year 2020

Table 11: Future Impact of COVID-19

Business Operations:
1. Costs of raw materials difcult to estimate due to slowdown in manufacturing in
different parts of the world.
2. In the Banking sector the main concern is delinquencies in loan and interest
repayments, especially from SMEs and individuals
3. Lay-offs are a reality
4. Marketing spends will reduce
5. Remote working may be the way forward

6. Small suppliers may not be as resilient as large corporations: as one respondent from
the manufacturing sector noted: “ Since we are a global company it will take a while for all
of the supply chain to be back to pre Covid 19 days. While we are a resilient company our
suppliers are not necessarily resilient and we expect to see some issues there”.
7. New distribution models and enhanced focus away from metros and small towns: Some
loud thinking by one respondent: “Alternative distribution models might emerge.
Companies like Elastic Run which ensure distribution of FMCG products into deep
interiors of country. Hyperlocal business models like Dunzo might also emerge till tier 3
cities which currently has its penetration in tier 1 cities. Considering Zomato's recent
takeover of Grofers opens door for these delivery models to use their infra for hyperlocal
business models. FMCG companies will look forward establish more C&Fs in relatively
smaller towns than prominent towns across country as smaller towns are always lesser
prone to event like health emergencies, riots, etc”.
Consumer demand:
1. Up-to 60% demand in consumer goods is likely to recover in the next six months but in
the long run it all depends on extent of job losses and government support.
2. Personal hygiene category will register growth.
3. Customers will hold back spending.
4. Post Diwali consumer sentiment may revive.
5. While car sales have dipped one respondent noted that ‘used car sales could go up as
the need for personal mobility solution would be high, as people would like to avoid public
transport’.

Going forward it would seem that businesses and their stakeholders must face up to
some harsh realities and prepare for them. Operations and supply chain managers must
prepare for possible increase in the cost of raw materials and think of new distribution
models. More-over they must prepare for collaborative relationships with suppliers and
distributors. Marketing managers must think creatively to get the biggest bang for every
rupee spent and also to identify new customer segments. Human resource managers
must brace themselves for lay-offs and prepare the workforce for remote working.

It appears that consumer sentiment will see an uptick only post Diwali.
5. Conclusion
78% respondents acknowledged that the pandemic had a negative impact on business
operations. The top 3 challenges appear to be difculty in staying connected with
customers, reduction in corporate spending and decrease in productivity due to remote
work. It is evident that ‘Work from Home’ is not suited to the manufacturing sector and
some service sectors, particularly Hospitality and Airlines. It appears that people are not
habituated to work from home. Even those who can nd it difcult to maintain the
balance between demands of work and home. Use of video can be uncomfortable with
awkward distractions such as kids in the background, dogs barking and other issues. It
must also be noted that not everyone is equipped with the right technology to participate
virtually. Organisations must take note of this and calibrate their response to help
employees become productive.

Sales have seen a sharp decline due to travel restrictions, social distancing, restrictions
on sale of some commodities and customers resorting to budget cuts and putting

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