NEW BUSINESS OPPORTUNITIES AFTER CORONA

inbatv Articles, Health, Survey

In the middle of difficulty lies opportunity

-Albert Einstein

The cataclysmic pandemic COVID19 is resetting societies and stimulating a change in moral  human behavior providing a window of opportunities to opt for sustainable new solutions and  services to protect mankind as well as nature. Although, we humans don’t care about Mother  Nature but current circumstances are bounding us to bend ourselves and act in a specific manner  otherwise be prepared to face the most disastrous tragedy than ever before i.e. climate change. It  was Spanish flu in 1918 which brought economies at halt and after which the world is facing  such a dreadful new ball game now. We were aware that Liberalization, Globalization and Privatization along with opportunities, exchange of goods and services is also a medium of exchange of diseases but it was not expected that it would create such desolation.

Initially, it was confined to China only but steadily it grabbed the whole world. Thus, the circumstances have left us with none other option than to behave ourselves well. Prior to the Corona crisis we were more heedless towards nature but now we are on a brink to rethink and re-planned things. Businesses existence after the COVID 19 may see a change as the perspective of the consumer will change and they will be cautious in their choice, opting for technologically enabled solutions. On other side government rules may seem stricter due to the positive change observed in the environment during lockdown. However, the crisis has hamper many businesses but there are some businesses which are still able to operate due to advancement of technology, especially in the service sector, education, online works, live streaming, working virtually all of these are reshaping business models and engaging customers in creative ways. Moreover, the need of the hour is demanding us to pick up the threads while being at our own place and that is possible only by going for advanced technology. But at the same time there is the existence of hindrances such as accessibility and availability of technology at individual level in various parts of the country.

According to the division of three sectors model which divides economy into primary, secondary and tertiary sectors. Service/Territory sector is the backbone of the economy providing livelihood to around 53% of the population and contributing 54.3% highest to the GDP while secondary sector around 29.6% and primary is at last with 17% contribution towards GDP in 2018-2019.(1) Service sector is the largest growing sector not only in India but all over the world economies due to technological advancement and demand of services due to convenience.

With the progress in the service sector India missed the growth of vital component manufacturing earlier since the 1990s and the opportunity to foster it lies presently. Further with expansion in its market and presence of young, middle class there is abundant skilled and semiskilled labor. It has the youngest “working age” population counting approximately 1.14 billion along with creating a huge domestic market. Other than this India has overtaken France and UK as per the latest report of ‘World Economic League Table 2020’; to become 5th largest economy in the world with well depth and size of market. This shows the potential of India to support bulk manufacturing, assembly and processing. Along with this to minimize transportation cost and ensure a smooth supply chain eastern coast is the best option to connect with Asia Pacific markets.

To set the momentum pharmaceuticals, mobile phones, machinery and other requiring networks of small and medium –sized enterprises (SMEs) should be focused which further attract the other mega manufacturing investment. (2) With global slowdown in economies, developed nations will be looking for low cost outsourcing solutions. The major reason for shifting is the lack of trust of the major economies in China as after the Corona outbreak supply chains of foreign firms were disrupted.

As per report, approximately 300 companies are already in conversation with the Indian government for production in a wide range of sectors such as electronics, medicine and textiles. The outcome of the pandemic is observed as a shift in consumer psychology leading to altered behavior towards the market especially towards China and its products which opens up a sea of opportunities for India and other South Asian countries. To fill this global space and attract existing companies to choose India their next working industrial destination first step is to become independent and remove all the dependencies. India is a suitable option in the present scenario due to the lack of severity of cases if we normalize the population in terms of positive test and fatality. India is an aspirational economy, rich in resources where legislation is open and accountable with stable democracy. For India FDI will boost up technology, skills development, exports, employment and competitiveness economy. The recent stimulators package of 20 lakh crore would help to achieve a vertical shape recovery which specifies India as brightest economies to attract FDI.

India’s growth surrounding optimism is mainly centered on sharp decline of global oil prices, low cost labor availability and domestic propensity to consume and once the macroeconomic indicators stabilize there is expectation of foreign capital moving to emerging market.(3) These indicators are clear signal that India is the best alternative to foreign companies searching for their next set up of manufacturing units. The Countries such as South Korea, USA and Japan evinced interest in production conducive economies in South Asia. Indian Government, in an effort to grab the opportunity developing existing industrial areas, planning fiscal incentives like preferential tax rates, tax holidays etc. (4) Whether it is IT, finance or non- core items India is capable and ready to face the challenge. The current business opportunities emerging as a result of COVID 19 is a low hanging fruit which India can catch by winning investment deals in various sectors.

Apart from the opportunities from the foreign countries the options for businesses are also available in the country itself. As COVID 19 is undoubtedly a risk for business except for some which are in demand and burgeoning in the lockdown.

The major reason behind blooming these businesses is the drastic change in the behavior of individuals and the need of the hour. People are switching to live streaming platforms, online education portals, digital content providers, online gaming stacks and other such kinds of businesses which were infamous earlier. People have started opting to those services which they were not generally opting for. For example ‘WhiteHat Jr’, an online platform teaching ‘coding’ has doubled its growth, businesses which are technology based such as education, agriculture, health, content and essential retail trade are performing well that may help them post better growth numbers.

Sectors like ed-tech, digital health and digital content have seen a perceptible increase in demand. Companies like Vedantu, Doubtnut, Pratilipi, 1mg, MyUpchaar and DealShare and few others have seen positive traction.(5) The companies are reaping benefits on account of lockdown and work from home. The reason behind this is that people don’t have any other alternative to avail the services as traditional things are not working out. For instance earlier the common person used to visit the clinic or hospital to seek medical consultation but nowadays they are opting for consultation over a call or through video interaction due to feasibility in the lockdown. The overcrowded hospitals in cities and high chances of being infected are the reason to avoid going to hospitals.

Drones are used for street surveillance to minimize or end physical contact which is helping authorities and people in different ways to prevent the spread further. The change in behavior of the individuals due to pandemic has created huge demand for mask and hand washing products. In services education traditionally been slower to adopt the tech industry which is now rapidly changing to online modes, making it more attractive for investors.(6) During a pandemic the disposal of waste is a big issue but the same is an opportunity for business as demand of disposing of waste from PPE has increased.

The World Health Organization has warned the countries recently that novel coronavirus will never go away and the world will have to learn to live with it. So, the drastic demand created in the pandemic is going to travel far away. This convinced Industry that behavioral change and demand resulted due to COVID19 will help the sector grow. To be safe and maintain social distancing human interface will reduce and technology will augment many basic human centric requirements. This accelerated adoption of technology will be observed around the globe as companies of US, Europe and Japanese would open opportunities for Indian outsourcing companies demanding more consulting led work and better margins. Post pandemic the following sector will see a high demand all over the world.

Health

The demand for healthcare workers would increase as the crisis would be lasting as per World Health Organization (WHO) including that there would be a surge in disease due to pollution as a result there would be a surge in up-skilling platforms for grey/blue color jobs.

Education

Education Sector which is adversely affected due to pandemic would stand again with the help of

online modes. Consumers have already tested the efficiency of learning online that will continue after lockdown creating a green field opportunity. Schools are opting for online modes as they are unable to conduct classes offline and universities have opted for online classes. Moreover, courses like UPSC, IIT-JEE, CAT, 10th and 12th coaching including extra-curricular courses such as Singing, Painting, and Guitar learning can be held online. Conferences held online are getting good responses from participants and remote working tools like ZOOM, Google Meet, and WebEx are increasingly used in business.

Insurance

Insurance penetration would increase because people would be conscious that they are more prone to the health problems and may experience financial stress. So, in the mid and long term health insurance products would expect more demand.

Entertainment

Post covid19 consumers would avoid visiting cinema halls and concerts for some time. They would have more time to watch online videos, movies and TV. This will create demand for opportunities in online entertainment.

Games

Online games were less preferred earlier but due to lockdown children would not be able to play outside; shifting their physical time to online games. Even in lockdown all age groups are preferring virtual playing leading to a surge in 40% usage of gaming APPS during lockdown. As the situation is going to exist for some time long online games would be a choice.(7)

Retail

Post crisis organized retail will be preferred instead of the local shopping which is crowded.(8) People will be looking for more hygienic and less crowded places for food, entertainment and other activities. While live streaming commerce models which enable retailers to showcase and Present products on larger commerce destinations would be more feasible. As technology improved virtual exhibition would be preferred which enables people to come together under a single roof, regardless of their location. For example Art Basel’s exhibition was held virtually for the first time due to pandemic with online viewing rooms, hosted galleries and collection for buyers and collectors to purchase. It shows the opportunities in the area of virtual exhibition where corporations can come together, network, watch live events and much more. (9) Brands would like to adopt the online platform channels like Amazon and Flipkart to reach its customers. Groceries delivery would see peak in demand as people would prefer not to visit supermarkets due to convenience and fear.

Other Services

Services like Gyms, Clubs, therapy, meditation and fitness classes would be an appropriate choice through APPS online. People would prefer tele-consultation and telemedicine instead of visiting a clinic/hospital and medical store.

Manufacturing

Fear of health and catching infection among people would increase demand for products such as masks, sanitizers, immunity products, nutraceuticals and other immunity boosting products. To make it more attractive, brand apparels may start manufacturing masks which are luxury and designer or matching with the dress.

Technology

Surge in remote working tools and accelerated increase of technology with use of drones create demand for robots and more drones. As drones based solutions can be used for farm monitoring, sanitation, delivery of certain goods etc. Along with this vending machine that is automated, providing snacks, beverages, lottery tickets etc to consumers after money is very useful in the present scenario to avoid human contact.

It is true that some of the changes are direct and short term to the crisis and will revert regularly even after covid19. But some will continue due to convenience that will form business in future.(9) The pandemic has provided an opportunity for various new businesses and most of them are in the Service sector by use of advanced technology. The present opportunity requires capital intensive technique instead of labor and for that India should focus on Research and Technology. To utilize the opportunity of the service sector India should skilled it’s labor in many areas. Although it is strengthening itself even after struggling with the pandemic and has started standing again with its full power. To accelerate its economy India has opted to be self dependent (Atma Nirbhar) and initiate Make in India. As demand for various existing and new manufacturing products is surging we can boost the economy by manufacturing in our own country. It would help us further to have quality checks on the locally produced items and that is not possible when we import. Chinese products are known for inferior quality with no central agency to scrutinize the quality of imported items.(10) At this juncture being the manufacturers and users of local products would turn the Indian economy upside down. It will require investment in the manufacturing sector and advancement of technology which is in demand now creating employment opportunities. This will help migrant workers in jobs and life sustenance support. Coordinated effort from the Ministry of Commerce and Industry as well as the concerned state governments are required a lot. Move of state governments such as Uttar Pradesh and Madhya Pradesh ordinances to exempt manufacturing establishment from purview of most labor laws is beneficial for businesses.(11) COVID has come not only with disaster and crisis but with new opportunities to develop our business. Some businesses may become the thing of the past and some will become the future. However, it is difficult to predict the future while covid19 keeps a serious issue until vaccines come. But we can hope for the best while continuing our struggle. It’s just how we take the situation and find out the hidden opportunities in them.

REFERENCES

  1. What is the Sector-wise contribution of GDP in India 2016-17 [Internet]. [cited 2020 May 18]. Available from: https://www.jagranjosh.com/general-knowledge/what-is-the-sectorwise-contribution-in-gdp-of-india-1519797705-1
  2. After COVID–19: Manufacturing India’s New Economic Potential [Internet]. [cited 2020 May 18]. Available from: https://thediplomat.com/2020/04/after-covid-19-manufacturing-india’s-new-economic-potential/
  3. India isn’t ready yet for foreign companies that want to quit China [Internet]. [cited 2020  May 18]. Available from: https://theprint.in/opinion/india-isnt-ready-yet-for-foreign- companies-that-want-to-quit-china/415040/
  4. A post-Covid business opportunity | The Indian Express [Internet]. [cited 2020 May 18]. Available from: https://indianexpress.com/article/opinion/columns/post-coronavirus- pandemic-india-6408650/
  5. Businesses not affected by coronavirus: Which businesses are doing well at the moment [Internet]. [cited 2020 May 18]. Available from:  https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/for-these-covid-proof-businesses-there’s-no-better-time-to-make-some-money/articleshow/75256923.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
  6. VC funds smell new startup opportunities in the post-Corona world as the global crisis resets consumer habits [Internet]. The Financial Express. 2020 [cited 2020 May 18]. Available from: https://www.financialexpress.com/industry/sme/vc-funds-smell-new-startup-opportunities-in-post-corona-world-as-global-crisis-resets-consumer-habits/1923881/
  7. Sequoia’s GV Ravishankar On The Evolving Valuation Game For Startups [Internet]. [cited 2020 May 18]. Available from: https://inc42.com/features/startups-covid19-sequoia-indias- gv-ravishankar-on-the-evolving-valuation-game-for-startups/
  8. Organised retail to grow post COVID -19 crisis- The New Indian Express [Internet]. [cited 2020 May 18]. Available from: https://www.newindianexpress.com/business/2020/may/15/organised-retail-to-grow-post-covid–19-crisis-2143596.html
  9. Automation I. New Business Opportunities Emerging Amidst Covid-19 [Internet]. Industrial Automation Magazine. [cited 2020 May 18]. Available from: https://industrialautomationindia.in/startupsitm/9437/New-Business-Opportunities-Emerging-Amidst-Covid-19/startups
  10. How COVID-19 Can Be a Huge Opportunity For India To Dominate the Trade Market [Internet]. [cited 2020 May 18]. Available from: https://www.entrepreneur.com/article/349952
  11. India news: India has an opportunity to build a more resilient and diverse economy after COVID-19 pandemic: USIBC – The Economic Times [Internet]. [cited 2020 May 18]. Available from: https://economictimes.indiatimes.com/news/economy/finance/india-has- opportunity-to-build-a-more-resilient-and-diverse-economy-after-covid-19-pandemic-usibc/articleshow/75139553.cms?utm_source=contentofinterest&utm_medium=text&utm_ccampaign=cppst

By INBA Team