Re-engineer, Reinvent
There are two deadly fears out there today. Coronavirus and failing economies. Where the former isn’t deadly enough, plummeting economies are. As governments flip between the tough choice of saving lives versus saving livelihoods, a few have moved at lightning speed to save their industries. In Germany, the stimulus of $600 billion was in bank accounts of recipients within the week of the announcement. In the US, companies can self- declare and receive funds instantly.
But Italy stepped in gingerly and continues to struggle. Italian firms had to apply online to ask for government aid. When they did, the website crashed.
In India, it’s been a waiting and guessing game. To many, the inordinate delay in announcing the second stimulus is worrying, intriguing – even frustrating.
But the Centre seems in no hurry. There is conviction in the corridors of power that a major stimulus is not needed until the lockdown is opened entirely. Chief Economic Advisor K. Subramanian has also re- enforced the argument being heard unofficially: Unlike in the West – in India, large industries will have to fend for themselves. The big question is: Where is the money for a stimulus?
First, it has to be squeezed out of available funds from every nook and corner – wherever possible ( page 12). And then, the Centre must prepare to bust the bank. But how much? Business Today reached out to noted economists and statisticians to ask where to find the money for a major stimulus: Former RBI governor C. Rangarajan; former CEA Arvind Subramanian; Marti G. Subrahmanyam, Professor of Finance and Economics, New York University; Pronab Sen, former chief statistician of India; and Professor Gourav Vallabh, spokesperson of the Indian National Congress. Their unanimous advice: widen fiscal deficit, print money, save industry…do whatever it takes. Read Joe C. Mathew’s story.
And while industry waits with bated breath for that elusive stimulus, necessity is breeding innovation. BT’s sector specialists put together a fascinating array of industries where firms are going back to the basics to reinvent and re- engineer.
Ajita Shashidhar and Sonal Khetarpal discover that FMCG major Marico and apparel maker Raymond are being myopic – literally. As projections fall by way side and planning gets subverted, they are setting aside long plans to strategise short, very short.
Consumer goods firms are most agile in adding products that didn’t exist in their portfolio. HUL has extended three brands with new offerings. ITC has launched two more. And Godrej Appliances has reinvented its semi-automatic washing machine.
In automobiles, Sumant Banerji notes the industry is resigned to low demand. Hence, showrooms will be smaller. Honda, Hyundai, MG, Toyota, Skoda, Ford, Jeep and luxury carmakers like BMW and Mercedes will eliminate dealer visits. Jeep already has a platform that excludes the need to physically go to a dealer. Consumers will gravitate towards leasing vehicles, rather than buying them. Ford, Mahindra-backed Zoomcar and Hyundai-backed Revv are gearing up for 15-20x growth in business.
In pharmaceuticals, P.B. Jayakumar finds Cipla has opened new direct-toconsumer distribution through e- commerce firms, unimaginable before. Medical representative’s job has transformed. Instead of visiting doctors, he uses virtual adboards, podcasts and webcasts to promote medicines, engaging doctors with global experts; or connecting them with patients.
In agriculture, the biggest challenge of farm-to- customer has been cracked by Bengaluru-based Ninjacart. And among large manufacturers, Tata Steel’s new materials business has got non-steel offerings of fibre-reinforced polymer and graphene. Read those in the following pages.