The pandemic has led to the huge change in the purchasing behavior of consumers. People are now looking at things with a new lens like what and how to buy. The health and worries of people has made them switch to buying more hygienic and health care products.
Since April 2021, India has been witnessing a surge in Covid-19, and the country is seeing over huge number of fresh cases on a daily basis. The COVID-19 hit India at a time when we were already under a lot of economic stress and our growth was stunted. This was due to a dip in the domestic market demands. Unorganized retailers, small industries and companies that were just starting out are the worst struck by the pandemic. Late in March 2021, the second wave of the virus spread like wildfire in the nation. India, which is the second-worst COVID-19 hit country, currently has over 18+ million cases. While, if we talk about the number of COVID patients admitted in the hospital, it has substantially increased from the past year. However, the death rate is lower than the previous time so far.
Changed Consumer Behavior
With a rough estimate of $854 billion, retailing in India makes up for over 10 percent of the country’s GDP. It is one of the biggest industries of the company and provides employment to more than 45 million people. Out of this, 90 percent of the employees are blue-collared workers. 50 percent of the total retail is owed to fashion and electronics while the rest is covered by other essentials such as food.
This pandemic has changed the world as it was earlier. From the thinking pattern of people to shopping for goods, everything is much changed. We are working differently, buying things differently, communicating differently and all these just for the sake of good. Several young companies in the retail industry have borne a lot of financial losses, many of them have shut down while others are experiencing an all-time low in generating revenue.
Adapting New Purchasing Pattern
The pandemic has led to the huge change in the purchasing behavior of consumers. People are now looking at things with a new lens like what and how to buy. The health and worries of people has made them switch to buying more hygienic and health care products. The crisis has also made consumers migrate towards online shopping and the good thing is that they’re actually adapting it to a great level. Also, consumers are now playing more smartly in terms of what they’re buying. They’re now shifting their ways to limit the wastage of food and move towards sustainability.
Being Socially by Maintaining Social Distancing
While it has changed the way people connect with each other earlier, but it didn’t separate them. People are now adapting to new technologies and ways to be in touch with friends & families. From young children to senior citizens, everyone is grasping the technology to support this crisis at its best. As per the latest research, overall 80 percent of people feel more connected with their communities through a digital medium. It goes without saying that people are getting used to this digital, no contact shopping experience. It is being predicted that by the end of 2021, consumer data as well as technological loopholes are actually going to push the retail sector of the country towards transformation and expansion. This is because all the online shopping and scrolling will provide companies enough data to study consumer behavior. Predictive analysis would help brands to make shopping experience more fulfilling for consumers.
A Virtual World
Be it about students attending online classes, people attending yoga sessions or employees doing WFH, everyone is moving in a virtual world in some or the other way. And, this is not a new anymore to anyone because in the first wave, people practiced these changes in their lives and now they are trying to excel in this world called ‘Virtual.’ People are living their life virtually as this pandemic has closed the doors to educational institutions, offices, businesses and almost everything except the essential services which has encouraged the remote era.
Impact on Economy
The Indian economy has been hit hard during the second wave of this virus in the country. Sectors like retail, hotel industry, tourism, hospitality business, trade sector, aviation, etc. has faced the crisis at a higher level; where as other sectors are also facing the heat.
As per the latest reports, there has been 20 percent reduction in domestic travel and about 75percent reduction in international travel bookings. Hotel booking rates have also decreased from 70 percent to 20 percent. There has been a down of 30-35 percent in the restaurant business too and losing a business at some extent daily.
March 2021 saw a fall in The Nikkei/IHS Markit Services Purchasing Managers’ Index from 54.6 to 54.0. This is the lowest it has ever dropped to since the beginning of the year. Only a mild increase in selling prices was witnessed with just a handful of companies laying the cost burden on the clients. Although firms are predicting a rise in output volumes in the next few months, the pandemic has heavily reduced the business sentiment across the nation.
The fashion, grocery, electronic retailers of India are hopeful of making close to 85 percent of the profits that they used to acquire before the monstrous corona virus hit the world. Diwali and Christmas in 2020 did help a lot of brands and sectors in making up for the losses experienced from March to September 2020. However, sales have been negatively impacted by little to no travels by non-resident Indians who used to visit the country in winters. Travel restrictions all around the world in general and India in specific added to the decrease in international demand which had hit a low since March 2020. While production activities were slowly getting on track in April, the composite PMI further downgraded due to the scarcity of services.
As per recent data, India’s ongoing GDP losses are likely to be approx. $5-10 billion (0.15 – 0.35 percent of GDP). With a more than 20 percent cut in benchmark indices, the Indian equity market has entered the bear market territory.
While everyone, including the Government of India, is trying hard to break the infection, the economic damage could have an unforeseen chain of events affecting the medium-term growth.
Owing to the pandemic, companies have had to bear the highest expenses in the last nine years. This was because of the dearth in inputs all across the globe as well as the transportation costs were at all-time high. All this resulted in an “upward pressure” on the outlays globally.
As they say, every negative impact may have a positive aspect to it. As humans, we need to fight the outbreak by staying united and following basic health and hygiene guidelines directed by the Government and WHO of India. We have to believe in this fact that the business landscape will alter and together we will overcome this virus. We will be back in the market with full freedom and the economy will take a hike soon.
( This article is written by Lokendra Ranawat, CEO & Co-Founder, WoodenStreet)