Mumbai: With India Inc. on lockdown, businesses have taken a hit like none before. Feedback Consulting, a Bangalore based B2B market research and business advisory firm which comprises of two firms, Feedback Insights and Feedback Advisory gauge the impact of COVID-19 on businesses across sectors and the economy through this survey.
Remote working (29%), digital/tech adoption (23%), EHS focus (17%) and de-globalization (18%) are going to be the biggest resets in business, in the post pandemic world, found the survey. About 46% businesses are also looking to focus more on employee engagement, 66% leaders feel localization will gain more prominent than ever before
In April, 2020, about 146 business leaders participated in this web-based survey which was conducted across various sectors including auto, agriculture, BFSI, Chemicals, Energy, Pharma, Healthcare, Education, Construction, IT and Services, to name a few.
This report tries to access the extent of the impact of COVID-19 on the global economy. However, about 35% respondents were unable to gauge the situation as it is shrouded with uncertainty. 33% respondents foresee a significant de-growth in the economy across the globe, of which 49% respondents belong to the services sector. Overall, only 17% feel the slowdown will go on till the lockdown is in effect, post which they expect rapid recovery.
As a result of the pandemic, about 84% business leaders expect global supply chains to undergo a major realignment while digital/tech adoption to increase at a faster pact. However, about 77% respondents are positive that the hit on businesses will be short term as they expect newer business models to emerge. The effect the pandemic has had on the volatile global trade will act as a fuel to localization and 69% also believe it will be more prominent than ever. 59% business firms expect working from home to become a norm in a post-pandemic world.
While business leaders have been optimistic in general, they have been critical about the efforts undertaken by the government. 1 in 3 business leaders (about 33%) believe that India’s recovery will be better than the world economy. However, about 30% feel it is too soon to tell as it depends on further measures taken by the government. 16% business leaders feel the impact will be much more severe than anticipated.
Across the various sectors, business leaders have mixed views about the time it would take to make a recovery. While 25% respondents feel it would take at least 2 quarters, 29% believe it could take between 6-9 months and another 29% believe it could take even more than a year.
Travel and Tourism are the sectors most impacted by the pandemic, according to 81% of the respondents, while they will also be among the slowest sectors to recover. The auto industry (80%), hospitality (71%) and construction & real estate (63%) are also amongst the most affected industries. Post the lockdown, E-commerce is expected to make a speedy recovery, according to 50% of the respondents, followed by IT services (46%), FMCG (44%), Logistics and supply chain (43%) and retail (29%).
1 in 2 businesses are preparing to address the impact of COVID-19 by relooking at their growth outlook for the coming quarters, while 33% are waiting for further guidelines before taking action. However, 17% respondents are planning to deal with the situation by managing their work-flow.
One of the biggest concerns faced by companies is the management of cash-flows (27%), followed by 26% business leaders who are worried about the uncertainty of the situation. With operational costs increasing and limited staff working remotely, 13% respondents are worried about the business sustainability.
Firms are less optimistic about business bookings and are expecting the first two quarters of the year to have a muted growth. About 23% respondents expect a reduction of over 15-20% in their business bookings, while 22% are expecting a reduction of 10-15%.
More than half the respondents (52%) agree that logistical challenges are soon to be the most problematic which will have to be addressed. 40% feel that maintaining consistency in service delivery will be a major problem, while 35% feel coordinating with the teams to ensure smooth service delivery is a growing concern. Getting the employees (especially the labour force) back to factories is being perceived as the biggest challenge among manufacturing firms.
Managing customer experience has become a major challenge which most firms are adopting the ‘stay in touch’ approach. 35% business leaders believe in keeping an open channel of communication with their customers to be the right approach while another 35% believe in proactively reaching out to their customers and understanding their concerns. 22% firms have taken to digital mediums to address customer’s queries and requirements.