Post lockdown, as businesses plan to reopen across India in phases, we continue with our series on what the industry leaders have to say on business scenario and practices going forward. Here’s part 2* of our coverage.
Mr.Pranesh Chhibber – Country Director, Canadian Wood
It is apparent that there is no escaping the global recession. With deep contraction in advanced countries, it is predicted that the global economy in FY 2020 – 21 will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago.
Consequently, with eight weeks of extended lockdown and continued uncertainty over the trajectory of recovery, the Indian economy, too, is bound to take a hard-hit in FY 2020 – 21. The spill over from global developments and domestic containment measures, including supply chain disruptions, will dwarf the gains resulting from the sharp drop in crude oil prices and the recently announced monetary and fiscal stimuli by the government. Further, due to the sudden demand shock, supply chain disruptions and ‘risk-off’ environment led liquidity squeeze, corporate India is set to see a decline in revenues and profits in the current fiscal, especially the mid and small sized firms.
However, it is interesting to note that IMF still projects India to be the fastest growing major economy with a growth of 1.9 per cent in the current fiscal, despite GDP growth rate having slid to a 27 – quarter low towards the end of the last fiscal. Thereby dragging the overall GDP growth rate to an estimated 5 per cent in FY 2019 – 20. The projection of 1.9 per cent may appear small in isolation, but it is significant when viewed against the estimated growth of 1.2 per cent for China and the global output shrinking by 3 per cent during the same period.
Going forward into 2021, the projection for India looks even better – IMF predicts India will rebound back with a GDP growth rate of 7.4 per cent, whereas the developed economies are projected to grow at 4.5 per cent. According to IMF’s World Economic Outlook, US and Europe are expected to bear the brunt of the downturn in 2020, with their economies estimated to shrink by 5.9 per cent and 7.5 percent, respectively.
Under the new normal, post easing of the lockdown, I see social distancing still being practiced, even as the offices and factories reopen. People are thus likely to continue avoiding events and other large gatherings. This would have a huge impact on many aspects of how the businesses were done in the pre-pandemic era. Work force in factories and manufacturing plants is expected to get more disciplined and organised in line with the government advisories. However, production ramp up will be cautiously implemented in response to consumption and demand. Consumption of non-essential goods is expected to decline with changed consumer priorities, thereby triggering a possible change in buying patterns.
Webinars and virtual exhibitions will end up replacing seminars and trade shows in the short term, new launches will happen online rather than at traditional venues. Networking too is certain to undergo a change. Social media will innovate, evolve and step-in, in the meantime. Even one-on-one meetings would be restricted to only necessary ones. People will rely more on telecons and video conferencing. Digital communication will grow to be the new normal. Traditional media will decline unless they relook at their offerings, evolve and innovate.
We at Canadian Wood are alive to changes, as they take place around us and are geared up to respond to challenges and opportunities alike during the pandemic or post Covid-19.
*For part 1 of our series, click here.
Mr.Anil K.Beejawat, CEO, RAK Ceramics India Pvt.Ltd.
The big change that I see is that post lockdown, customers are going to rely more than ever before, on the ‘known and established brands’ in the market. It’s going to be a tough market for the unbranded players in the tiles, bathrooms and sanitaryware industry. As customers return to the market to make purchases, known brands will give them the psychological comfort, for both quality and after-sales support.
On the selling style, established companies will have a clear edge. Reliance on technology is going to increase. Companies will move towards capturing the customer data and preferences online and using that information, the sales will happen at the dealer point. Hygiene at the dealer point will be important for the customer with social distancing norms becoming the common thread across all transactions.
Architect engagement will increase online, be it giving him basic information on products and solutions or helping him with design simulations. At RAK, we have all our content, both in terms of the product and it’s applications, available in the digital format. We bring our global manufacturing, selling and after-sales experience to India. Today, the Architects, Interior Designers and PMCs are very comfortable working with us. They can expect a much more seamless service from RAK in this new format of digital communication, as is being discussed in the industry.
Credit control will be another challenging area that all stakeholders will need to address. The building materials industry had already been in stress before the lockdown. The dealers and customers will all have to ensure that the payment schedules are adhered to, both in letter and spirit. Credit cycles will surely come down.
Overall, I see opportunities for players like us as we were anyways moving towards a digital format of doing business. Our dealers, the architect community and the customer only stand to gain from. We are fully geared-up for the market as it starts opening.
Mr.Gautam Ghosal, Director, Pansophical Technological Solutions Pvt.Ltd.
As we prepare for the lifting of the lockdown, we can also see the emergence of a new normal in all major aspects of life and business. There are both challenges and opportunities.
Looking at the brighter side, and with personal hygiene and safety being propounded to heightened levels and rightly so, touchless mechanisms are bound to assume prominence. From the Building Materials standpoint, products like electronic taps, sensor urinals and sensor WC Flush mechanisms are expected to be more sought for commercial installations. Many of the top notch establishments are already having them, I see a much greater propensity for usage in the middle level commercial establishments as also many small offices and retail stores.
An extensive recommendation of hand wash for a minimum of 20 seconds is being made to avoid infection from Covid19. A high level of consumption of water is imminent. Alongside, It also heightens the possibility of wastage of water during the 20 seconds of application of soap when an ordinary tap may not be closed. The sensor or electronic taps thus fit in very well to reduce this consumption. Let us not forget that Water as a resource shall continue to be important. I see a huge potential for appropriately priced but efficient products.
Sales of Building material products have a high factor of personal explanation and “touch and feel”. Consequent to large scale apprehensions of catching infections, the next six or eight months shall see much less personal physical interaction in terms of meetings and visits to retail outlets except for possibly the finalization aspects. Here lies a huge challenge. Marketing of building material products shall have to be innovative and much stronger. The digital format is widely being talked about, however rising above the clutter shall be critical in gaining ground.
Conservation of costs and energy can be expected to become the talking point much more than before. As also product quality and efficiency. Engineers and consultants shall have to far more discerning not only in the plumbing and piping designs but also in choosing appropriate and efficient valves like pressure reducing valves, Hammer Arrestors and other products.