Revival & Survival: We expect strong headwinds to growth: Rubeena Singh
Prepared or not, India has to gear up for an exit strategy for the lockdown period. It is definitely a changed world that India is entering now, and we will have to learn to live with the Coronavirus in our midst.
A lot has been written, debated and discussed over how much the economy and business operations have been hit. We, at Adgully, aim to look at the revival story. What does it take to jumpstart an economy? That is the great narrative that we are following up as part of our ‘Revival and Survival’ series.
Rubeena Singh, CEO, iProspect India, analyses the new normal for corporate India and highlights the measures needed to ensure a speedy business revival for the Digital and Media industry.
What does the new normal look like? How much has the COVID-19 crisis disrupted business operations?
The impact of this crisis has been significant for us and our clients. In fact, the whole ecosystem has taken a big jolt – consumer demand has contracted and it will take at least 3 to 4 quarters before things start getting back to where they were before this crisis.
The new normal will include the following:
- WFH is here to stay; this crisis has proven that it is possible to work from home productively. Going forward, we expect enhanced telecommuting (2-3 times a week) to be part of the new normal. Basically, a hybrid model, wherein employees will WFH 2-3 days a week and come to the office only when necessary.
- It will also see a significant drop in business travel. Digitally connecting over video calls with clients has found ubiquitous acceptance both with clients and service providers. Given that the virus is here to stay for some time, we expect people to be cautious and restrict business travel to critical needs.
- We expect digital commerce to continue gaining strength to strength. Offline-traditional retail will remain subdued for some time to come.
What should be the blueprint for a post-COVID-19 economy?
There is still a lot of uncertainty over how long the overhang of the virus will remain, will there be a second wave, will we find a vaccine, etc. Consequently, while it is difficult to estimate economic estimates, we can project certain themes which have a high likelihood of emerging in the post-COVID-19 economic reality:
- Digital interaction in business, commerce, communication, entertainment, education, healthcare will only increase, in some cases, manifold.
- Governments will start paying more attention to healthcare infrastructure.
- The utilisation of public transport will reduce, and consumers will once again turn attention towards personalised transport.
- Aviation, travel and hospitality will struggle.
- Demand for luxury goods will be subdued.
- Commercial real estate (malls, offices) will come under pressure.
What are the 5 key measures needed to ensure a speedy business revival for the Digital and Media industry?
- It’s a people business, keep your human capital motivated and abreast with the latest.
- Stay engaged with partners to solve business and marketing challenges.
- Embrace technology, more than ever before.
- Focus on creativity and innovation.
- Communicate often with all stakeholders and stay positive.
How are you strategising for the remaining quarters of this Financial Year 2021?
In this period of significant uncertainty, revenue growth and cash conservation are going to be focus areas for the remaining part of FY21. While we expect strong headwinds to growth, our attempt would be to help our clients reallocate their media spends, and hopefully turn overweight on digital by showcasing innovative ideas, solutions and opportunities.
Creative management of costs and a strong focus on collections will be the mantra for FY21 as businesses strive to conserve and protect cash flows.
How do you see businesses and the Government working together to undo the lockdown disruption and address the market uncertainties?
Lockdown disruption can be undone by resuming economic activity in a safe manner. Here, the health of employees and consumers should remain top priority, and businesses and government will need to work together on this.
Statutory authorities will need to specify clear and well-researched guidelines and norms for resuming business activity. Businesses will need to focus on adhering to government norms without any shortcuts.
How do you visualise the economy and your sector a year later? How much would it have recovered by then?
Various estimates by economists and investment banks have projected a 5%-10% contraction in the economy in GDP terms. A lot will depend on how we deal with the virus spread, subsequent lockdowns, etc.
The media sector has been significantly impacted by this dip in sentiment and economic activity and things are not expected to recover in this financial year. Next year, could be at best be flat.
While ad spends will come down, digital is expected to gain materially, at the expense of print, TV and events. During the almost 2-month long lockdown, many first-time consumers have adopted digital commerce channels for daily needs such as grocery. Going forward, one can expect these new digital interactions to remain sticky and gain at the expense of offline commerce at physical stores.