Effects of COVID19 on Indian Economy

Effects of COVID-19 on various sectors of Indian Economy.

India reported the first confirmed case of the COVID19 infection on 30th January 2020 in the state of Kerala .The affected had a travel history from Wuhan, China.

In order to stop the effect flow of the virus in the country , the Government declared a nationwide Lockdown which led to catastrophic consequences in the economic and social life of the people.

Information Technology(IT) Sector:

Indian IT firms became subject to the full impact of business disruption in the US and Europe due to the Covid 19-induced lockdown in the quarter to June, as analysts expected companies to report 5-10 per cent drop in revenue due to clients cancelling or putting off discretionary spending on technology in the three-month period.

Sectors such as travel and transportation, oil & gas and retail have been the most affected due to the lockdown in the six-month period, with several companies declaring bankruptcies due to the loss of their business.

It is a washout quarter that captures the full impact of uncertainty in business from Covid-19 led by lockdown, supply side compression and demand pullback. We expect retail, travel and transport, hospitality and oil & Gas verticals to be severely impacted and do not expect recovery in Q2 also,” Aniket Pande, IT sector analyst with brokerage Prabhudas Lilladher wrote in a report.

In the near future, IT companies could feel the heat of pricing pressure, revenue loss due to lockdown (in India and many countries globally), client bankruptcy and slower client decision making led by lower discretionary spends,” wrote Devang Bhatt at brokerage ICICI Direct.

Indian IT firms are expected to follow Accenture, which lowered its growth forecast to 3-6% from 6-8% due to business impact from the Covid-19 impact.

Indian Retail Industry(IRI)

Indian Retail Industry has more than 15 million retailers, both small and big, traditional and modern trade. Retail employs 40-50 million Indians directly of which modern trade employs more than 6 million Indians equaling to almost 12 per cent of the total Retail consumption of the country. Retail contributes to approx. 40 per cent of India’s Consumption and 10 per cent to India’s GDP.

The lockdown to prevent the spread of coronavirus in the country has greatly affected retail business. Most stores, except stores selling essential food & grocery, have been shut across the country. Garments, saris, electronics, mobile phones, furniture, hardware etc. almost all stores are closed. Non-Grocery/food retailers are reporting 80 per cent to 100 per cent reduction in sales. Even retailers of essential items are facing losses as they aren’t allowed to sell non-essential items, which would bring them higher margin.

Manufacturing Industry

The ongoing lockdown has put a lot of strain on the manufacturing industry, which contributes almost 20% of the GDP. Of this, 50% is contributed by the auto industry. Even prior to the lockdown, the auto industry was not in a great shape, with sales down by more than 15% and production cuts of the order of 5 to 10% or more. In the unorganised industry, the situation was much worse, as the uncertainty would impact smaller organisations with lesser retentive power, due to their lower profitability. This is somewhat similar to the ‘root beer game’ effect in Operations Management parlance, where an event in the market can lead to highly amplified response from the suppliers, leading to short term overproduction and medium term discount sales. Choking of distribution channels due to this effect are not unknown and goods tend to get offloaded at lower prices, providing volume support, but hitting the profit and profitability.

Manufacturing industry has been hit in many ways due to the Corona effect. To begin with, lower production, due to lower offtake. This takes a little longer to manifest itself, as, some distributors, sensing an opportunity to earn profits in a developing shortage situation, tend to carry on with the sales, but with an extended schedule of deferred payments. Longer credit days are given by the producer, who is keen on continuing with operations, before a complete shutdown. More and more employees stop coming in to work, due to government directives, thereby reducing the scale of operations, with consequent effect on quality, cost and production volumes. Over a period, this adversely affects the turnover, which slows down to a trickle. The uncertainties in the logistics leads to a cascading effect, transporters struggle to not only place vehicles for loading, they also are under pressure to adjust their quotes for carrying goods, as they also face lower attendance, with their operational risks increasing steeply. The slower rate of banking operations, shorter working hours, jammed and overloaded communications lines lead to delayed money transactions, thereby elevating monetary risks. The suppliers to large producers start feeling the pinch, and start to disengage, and play safe, in order to protect their interests, because their capacity to bear risks is much lower than their big customers. Finally, due to all these interruptions, the end user also starts postponing non-essential purchases, and disengages from the consuming processes, by postponing their demands.

Construction Industry

In this challenging time where the effects of the pandemic are being felt in every part of the world, the real estate sector has been widely affected.

Countries from all over the world are applying strict and extreme measures to break the chain of CoronaVirus. India during the Phase-2 status of COVID-19 which had led to businesses experimenting with digitalization through Work From Home model. There are mixed opinions about the real estate sector in India.

Compared to last year, residential property sales have plunged majorly in the first quarter of this year. From 78,510 units in 2019 to 45,200 units in 2020. Even though RBI announced a 75-basis-point repo rate cut bringing it down by 4.4%, the benefits of this are more likely to be seen in the long term.

According to various sources, housing sales declined by an average of 30% in major metropolitan cities. In Mumbai, there was a significant decline of 42% in the sales units and on the other hand, Bengaluru, Pune and Hyderabad’s sales decreased by 25%.

Hospitality Sector

The hospitality sector is dependent on travel, trade and tourism for its sustenance. The pandemic has decimated the operations of major sectors like the hotel industry, and also affiliate branches like tour guides and lodging.
Due to the corona virus outbreak, the massive rate of cancellations of bookings and trips have badly affected the ability of hotels to operate across India. As per Hotelivate, a hospitality consultancy, the hotel industry could have faced losses in the range of $1.3-1.55bn this year.

Currently, 15-25% of employees in branded hotel chains are either contractual or regular employees who would be the first victims of any mass lay-offs. In the USA, 7.7 million jobs were lost in the hospitality sector while the same figure stood at 1 million in France.

The corona virus has also had a devastating impact on occupancy rates on hotels. In March 2020, towards the end of which month the nationwide lockdown began, Indian hotels registered an 80% YoY decline in Occupancy Rate and 12-14% decline.

COVID-19 – THE NEW NORMAL—INDUSTRY SCENARIO

The world is facing humanity’s biggest crisis since World War II. Almost every country has been affected by the devastating Coronavirus disease (COVID-19). Undoubtedly, this Coronavirus has put the world economy at a major risk. Businesses and individuals alike have had to adapt rapidly to cope with uncertainty and anxiety in a seemingly unending ordeal. The perseverance of businesses and people has led to the emergence of a new landscape- a ‘New Normal’ in which the global communities continue to survive.

There are several channels through which the COVID-19 outbreak has affected Indian economy. The disruption of supply chains is a major one. Job loss is on the rise along with the slowdown in manufacturing and services activities. Workers have come back to their home in faraway places, thereby leaving the upcoming harvest in a state of uncertainty. Lack of orders and initiatives has lead to massive trade contraction. Besides, there has also been a disruption in air travel, fall in travel and tourism, contraction in outdoor entertainment industries and rise in bankruptcy.

The following sectors have been adversely affected by the pandemic:

  1. Apparel & Textile Industry has seen a disruption in labour supply, raw material unavailability, working capital constraints and restricted demand due to limited movement of people and purchasing ability.
  2. Auto Sector(including automobile & auto parts)has been facing challenges on account of lack of demand, global recession and failing income levels.
    As per McKinsey & Company, global trends impacting the automotive sector are as follows:

    • Global supply chain disruption
    • Cautious demand outlook
    • Shift in mobility trends
    • A resilient aftermarket
    • A potential auto investment
    • Deal activity to grow
  3. Manufacturing Sector : India offers a strong manufacturing base. During the COVID-19 pandemic, it has announced some incentives to global firms that seek to set up new operations or expand their existing operations. While India offers a range of advantages as manufacturing destinations, capitalizing on these opportunities requires a multipronged strategic approach across three broad dimensions:
    • Understanding the local regulations
    • Getting the location right
    • Building an India-specific organization structure         
  4. Building & Construction are generally leveraged and they are burdened with high-interest payments and lack of sales.
  5. Aviation & Tourism Sector has also been deprived of direct Government intervention. Since lockdown, people have stopped travelling apart from very essential travel.
  6. The Paper Industry has almost been wiped out as the world looks to adopt more environmentally friendly ways to live. Digital is the new normal.

For many business organizations, technology is considered to           be a support function with it being used as a means to get to an end. Following the pandemic, this has changed as technology has become the frontline requirement in most organizations. It’s importance can be comparable to that of revenue-generating functions such as sales and business development.

The next 4-5 years are going to be the golden period for media & entertainment. 3D/4D chatrooms and conference rooms are going to emerge rapidly. The largest chunk of media spending will shift from television to digital. Print media will cease to exist.

Businesses will experience an increase in productivity due to reduced staff. Remote work will see an uptick. The burden on local transport will ease.

High End Technology with an uninterrupted high-speed internet powering the video lectures, online projects, etc is now no more an option for the students since physical classrooms are minimal and will be kept that way in post Covid 19 scenario as well.

Coming to the professional sector,  Remote Working and Work from Home seem to accelerate as  companies are giving more stress upon two factors-Health and Hygiene. In this way, productivity has risen since commuting time, expenses and energy are saved. However, to ensure all these, advanced technologies such as Artificial Intelligence, Machine Learning & Deep Learning , automation, robotics, augmented reality, Block-Chain and 5G will be the most coveted for all the industrial sectors as every industrial segment starting from BFSI, Information technology, Manufacturing, Health care, Supply Chain & Logistics, Power etc have to develop and adopt new business models.

To conclude, this is the time to rethink and reset everything. Never before has the world come to a standstill where one can pick apart the moving pieces. If we rethink everything properly, we can overcome the challenges faced by the people in this pandemic such as environmental change, disfigured lifestyle and inequality.

Need Customer Based Brand Equity? 5 Points To Consider

Building a customer-based strong brand is very important for every placement consultant and executive search agency. Few of the benefits you can reap by focusing on brand equity is greater loyalty from customers, your placement consultant won’t become exposed to the competitive marketing crises and even customers will show positive response to increase or decrease in the fees. Since customer based brand equity has so much to offer, it’s time for recruitment agencies to know the points they need to focus on.

Few Vital Points To Consider When Looking For Customer Based Brand Equity For An Executive Search Agency

  • Brand Identity And Awareness

If you are willing to achieve the right identity for your brand, you need to make your brand important to your customers. Check whether customers can easily recall or recognise your brand. Brand awareness is when customers can link the name, symbol or logo or your brand with certain associations. They should know what type of services you are actually selling under that brand. Unless the recruitment services are specially designed to fulfil their requirements, developing brand equity will become difficult.

  • Brand Meaning

The right customer-based brand equity for a placement consultant can be created when they can establish a brand image which can reflect what exactly the brand characterizes. In short, the image of your brand should reflect its meaning. You can generally distinguish brand meaning in two categories, the abstract imagery related considerations and the performance-related considerations. These categories actually exist in the mind of the customers.

  • Brand Judgements

Brand judgements are basically the personal opinions of your customers and how they evaluate your brand. They might form various types of opinions about a brand after putting together all their imagery and performance. Though customers can make various judgements about a brand, there are four types of brand judgement you need to focus on if you are looking for Customer Based Brand Equity for an Executive Search Agency. They are brand quality, brand credibility, brand consideration and brand superiority.

  • Brand Feelings

How customers emotionally react or respond to a brand is known as brand feelings. These feelings are the result of the marketing program for the brand. Not every executive search agency is aware of the fact that the feelings your customers have about your brand can be either intense or mild. When the feelings are positive, it means that your brand has attained social approval. They might have used the service themselves or has been referred by others.

  • Brand Relationship

Brand relationships primarily focus on how well your customers can identify your brand and their ultimate relationship. Your focus should be on making your customers feel that they can synchronise well with itS. The two dimensions of characterizing brand relationships are activity and intensity.

Since you are now aware of the vital points an executive search agency has to consider when looking for customer based brand equity, it’s time you too focus on them and give your business a boost.

Check The Recruitment Practices In India Expected To Rule Next Year

Everyone looking for great talents knows how challenging the task actually is. With the recruitment industry becoming more complicated, the hiring process has become harder. If predictions are to be believed, the competition is expected to get tougher the coming year. People looking for the right talent have to rely on a few smart and innovative ways. They also need to stay aware of the latest recruitment practices which can actually change the way how companies look for a potential candidate.

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4 Recruitment Practices in India And The Road Ahead

• Try Social Recruitment
For someone not aware of the term yet, social recruitment is basically the system through which social media platforms like Facebook and LinkedIn are used to source the right talent. There are numerous managers and companies using different social media platforms as it helps them choose from a larger market of candidates. Even the social platforms are experimenting to ease the method of recruitment through their networks.

• Flexible Work Schedules
Though this is relatively a new term, flexibility in the working hours is expected to become a trend in the recruitment sector soon. Candidates with work-life flexibility will be given more priority. With more and more companies launching flexible working schedules,Workers Compensation Southern California call us at 714 598-3900 who prefer flexible working hours will find it easier to land their dream job.

• Adaption Of PR Practices
Hiring the right candidate will become easier for the recruitment companies if they can adapt the latest PR practices. As recruiters are indulging in a wide variety of marketing and PR practices, it is expected to become a recruitment trend within a year or two. Few of the things recruitment marketers can do include candidate lead generation, branding and bringing over content marketing as these are the basic recruitment practices in India.

• HR Automation
Everyone in the recruitment industry is aware of the various benefits provided by HR automation. In fact, the entire process of automation is regarded as a vital move in the HR sector as it helps companies save time and money. The recruitment platforms have become smarter after the introduction of machine learning and artificial intelligence (AI). This is why recruitment managers need to continuously evaluate how they can save time and money using those tools.

Since you are now aware of the latest recruitment practices in India, it’s time you start looking for your dream job through the best recruitment agency.

Let Your Company Save Time And Money With The Best Recruitment Agencies

If you think that sourcing the best employees for your organisation is time-consuming, risky, complicated and expensive, approach a reliable recruitment agency and they will suggest the best staffing solution within your budget and lots of them want to play.com credit card at netentplay.com. You will come across numerous recruitment agencies for companies with years of industry presence and a vast clientele. In fact, they are the best professionals to approach if you want your organisation to save time and money in the long-run.

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4 Ways How Recruiting Agencies For Companies In India Can Help You Save Time And Money

  • Specialisation

The best recruitment agency is the one who specialises in the type of industry you want to focus on. This is why doing a bit of research before finalising one is always advisable. When the agency has suitable experience, they will know which type of candidates will suit (our site) your role the best.

  • Save Time

Companies with job vacancies will get hundreds of resumes every day and if they have to sit and go through each of them, it will become very time-consuming and boring for the company staff. The best alternative is to let the agency you are hiring find suitable candidates who can fill up the position. This will definitely help the companies save time. Few additional tasks undertaken by the agencies are completing the reference checks, scheduling interviews, matching their skill sets and completing the inductions.

  • Find Various Workers

Though finding full-time workers are easy, their salary packages are quite competitive in nature. On the other hand, temporary or part-time workers are quite hard to find. When you approach a recruiting agency for companies in India, you can stay assured that the best staffing specialists will source diverse candidates for your organisation so that you don’t have to burden your existing employees with extra tasks.

  • Reduce Turnover Cost

One of the basic issues companies face when looking for staff replacements is the money and time required to find someone suitable and train them. The right recruitment agency can ease this process by selecting the candidates on your behalf so that you have to interview fewer candidates. They ensure that every candidate they are shortlisting for the interview fulfil the necessary skill set which can benefit your company.

Since you now know how a recruitment agency can help your company save time and money, it’s time you start looking for a reliable agency.