Part 1: Are we there yet?

Almost 60% of the world population across the world is living under lockdown conditions. That's a staggering 4.5 billion people. In India itself, almost 1.3 billion people have been put into lockdown till the 3rd of May 2020.

But world over, we are beginning to see this gradually change. In Europe, Denmark and Austria are easing up, and have announced that schools for younger children will open in April itself. In Asia, Taiwan opened its schools as early as February end, while China (Beijing and Shanghai) are planning school opening toward end April.

Businesses too have been cautiously re-opening, under strict conditions. In Spain, construction and manufacturing sectors returned to work on April 13. Germany, Europe’s largest economy, will allow smaller stores of up to 800 square metres, car dealers and bike shops to reopen from April 20. Austria let non-essential shops of up to 400 square metres, DIY shops and garden centres reopen on April 14. In India too, the government has said that it would allow some industries, such as farming and construction in rural areas, to open after April 20.

While this is nowhere close to a world back to "normal", these are all indications that we are inching back to normalcy, in perhaps between 3 to 9 months from today.

So: what's the status now?

Almost from Day 1 of the lockdown, certain sectors in India were kept open. Food and Groceries, Medicines and Healthcare, as well as Banking; termed essential services; were kept open.

Look at what happened to startups in these sectors.

Bigbasket and other online grocers reported a multi-fold jump in their orders: such a staggering volume that they were caught unprepared to deal with the demand. UPI based payments crossed a billion transactions in March. Even though this was a 6% drop in March as compared to February 2020, remember that a vast sum of UPI payments in February were for services (national toll payments, "non-essential" services and so on) that were no longer in the basket for consumers. Healthcare revenues shot up, specially "immunity boosters"; even as startups scrambled to pivot to manufacture masks and IoT devices such as ventilators.

While essential supplies and pharma are already open, the Government of India is now relaxing the conditions for sectors where almost 30% of India's startups operate.

Now, India is opening up a bit more. From May 3, a few more sectors where startups and entrepreneurs have some presence, are opening up.

  Data from Excubator; covering over 24,000 startups in India

If the jump in transactions in the Grocery and Payments space was any indication; I foresee a pent-up demand in these sectors too: Agriculture distribution, E-commerce, Employment and hiring services, and Transport.

If you operate in these areas, my question to you is this:

Are you ready to take advantage of a scenario where there is a pent-up demand that suddenly bursts onto your order books in May?

India: Caution? or Agressive response?

India reported its first COVID case on January 30th, and the first death on the 12th of March, by when the number of cases had grown to 74. By the 25th of March (657 cases reported, 12 deaths), we moved to complete lockdown. This was far more agressive than most other countries (Italy, for example, locked down only on the 9th of March, by which time over 9000 cases had been reported, and over 450 people had died).

This agressive posture has actually helped India slow down the growth of cases (called "flattening the curve"). COVID cases in India are doubling every 9 days or so, while in France, Italy, Spain and Belgium this is happening every 5 days. In the United States of America, COVID cases are doubling every 3 days. While we may have supressed the curve so far, and we might escape the worst of the pandemic, will have to be cautious about it.

In India, COVID-19 Cases double every 9 days. In many other countries, these double every 3 to 5 days. But its not time to breathe a sigh of relief yet.

Opening up a country's lockdown completely, too soon, can lead to a W curve in the economy, where an initial spurt in the economy is hammered by a resurgence of the virus, leading to perhaps an even steeper drop in the economy.

This is what economists in Europe and the USA fear: that decreasing social distancing norms by opening up work-places and travel could result in a steep rise in both cases and deaths, leading to a bigger impact on the economy as final recovery could take many more months.

What does this mean for entrepreneurs and India? We are currently on the Blue curve, and its been less than four weeks since complete lockdown and forced social distancing. This means that in all probability, if the lockdown is lifted abruptly, we will see a sudden resurgence of the virus in about three to four months; which will lead to even harsher conditions.

Relaxing this gradually, by allowing first essential supplies to be made easily available and then slowly adding more categories into this can help move us on the the Green curve, with the possibility that the economy is almost back to normal by the end of the calendar year 2020.

-- Guhesh Ramanathan