An Interesting World

The Chinese have a unique way of looking at the world. They have a proverb that goes : 

May you live in interesting times… 

 - Chinese Proverb

I understand this proverb is meant to be a blessing and a curse in equal parts; after all interesting times can be trying for all involved. 

The Coronavirus pandemic has indeed created interesting times for the world. 

Before COVID became a household term, we were witness to the great power game was heating up : the US-China trade war was front and centre on the global stage, with the rhetoric being dialled up and adventurism on both sides.

While there are theories galore around the origins of the coronavirus, the undeniable fact is that our lives have become far more interesting, volatile and uncertain than they already were before the COVID pandemic. 

So, what are the take-aways so far?

A World Unprepared

This crisis caught everyone unprepared, with the possible exception of Wimbledon (they had pandemic insurance, go figure) and a handful of other institutions. 

As a result, our socio-economic system has undergone massive shocks in these past few months, and there are very real challenges facing us all.

The silver lining is : we’re all facing this together. 

There’s no institution, or country on the planet that hasn’t been affected by this pandemic. This is a losing proposition for everyone and we all need to develop solutions to put this pandemic behind us. 

Developing those solutions is far easier together than developing them all alone. It can be faster, cheaper and more efficient to do so. Given the current situation, surplus resources are a luxury few can afford. 

The Socio-Economic Conundrum

Closer home, the corporate world is trying to whether the storm and pass through the more tangible and immediate challenges. 

Markets for many industries have bene closed over the past few months, consumer spending has been subdued in most categories bar the immediate essentials and overall confidence has taken a hit.

There have been some industries more impacted than others (travel / hospitality / auto to name a few), and all corporates need cash right now. For many cash flows for many have dried up and we all find ourselves hoping there’s a way the lockdown can be lifted without endangering lives.

Safety is of paramount importance, and our governments find themselves in the unenviable position of weighing the costs of the lockdown in the short term versus the economic impact in the long term. 

There are no easy solutions to this conundrum. 

Opportunity in Adversity

With summer internships underway, we recently kicked off our remote internship program. 

We now have the privilege of a great crop of bright young minds who are helping us solve some of the toughest problems we face in these uncertain times. 

Through this pandemic, we have a chance to work with tomorrow’s leaders and develop solutions for our current environment that can have a tangible positive impact today. 

At times, opportunity has a strange way of knocking on one’s door. 

As an aside, who would have thought the hand sanitiser category would go from Rs. 80 crores a year to a Rs. 500 crores a year* market almost overnight?

Digital Retail & Omni Channel

Today, it seems difficult to imagine consumers flocking to malls and high streets in the same way as the were before the pandemic. Consumer needs haven’t gone away, though their behaviour, concerns and preferences have certainly changed. 

While there has been a lot of focus on the e-com industry in India these past few years, the industry is still in its early stages : it is still the privilege of those in metro and tier 1 cities, access to smartphones, ability to navigate an e-com website and with access to the formal banking system. 

This pandemic might be the final push the e-com industry needs to become mainstream.

Sure, tier 2 towns and onwards contribution to significant order volumes, there is more focus on regionalisation, local languages and contribution of CoD as a payment method is extremely high more so in upcountry markets.

I would love to know what the numbers look like when it comes to order value in upcountry towns, categories being consumed and spread of order density in tier 2 and upcountry towns. However, I find most of these data points are difficult to find in generally available reports on the Indian E-commerce Industry. 

In a country like ours where 80-85% of all firms are MSMEs, these firms are the backbone of our economy. They exist and thrive because of their extremely frugal methods of conducting business, their ability to innovate and adapt locally, and their unparalleled understanding of the local consumer. 

A digital retail model that partners with MSMEs and leverages their strengths can be a far more efficient solution that one brought about by a single market place aggregator or company. 

We’re seeing some of this come about with Amazon partnering with local Kirana stores and possibly with the Facebook (WhatsApp) + R-Jio partnership. With R-Jio, we must also remember Reliance Retail is a player waiting in the wings to possibly make an entrance at an opportune moment.

In Conclusion

What we’re going through is a time of unprecedented change. Change brings with it adversity and opportunity in equal measure. 

Adversity can bring out the best in us, and while opportunity can be hard to identify, it can also be equally rewarding. 

And since we live in interesting times, may you find yourself stronger, sharper and the better off for it. 

Sources,

1. Indian Hand Sanitiser Market, https://economictimes.indiatimes.com/news/economy/foreign-trade/india-inc-wants-the-sum-of-its-parts-to-be-china-plus-one/articleshow/75462108.cms