Recovery may be faster than what people expects, opportunities to enhance market share: Havells India MD Anil Gupta
New Delhi: Digitisation of business will change how we work and it will also lead to reduction in cost and improve productivity. Havells is already witnessing adoption of digital methods by their channel partners. Vineet Agarwal, MD, Transport Corporation of India Ltd believes that digitization can provide exponential growth to businesses.
Demands in non-metro cities are intact and can fuel recovery, believe Anil Rai Gupta, MD, Havells and Abhishek Somany, MD, Somany Ceramics. Current escalation with China can actually benefit Indian companies, expects Rajiv Memani, Chairman and regional managing partner, EY India.
Above prominent industrialists— Anil Rai Gupta, managing director, Havells India, Vineet Agarwal, MD, Transport Corporation of India Ltd, Abhishek Somany, MD, Somany Ceramics were speaking at a webinar organized by Workplace Trends India founder Tushar Mittal, who also heads interior design firm SKV. Rajiv Memani, Chairman and regional managing partner, EY India was moderating the panel discussion.
Covid 19 has forced people to adopt digital methods and this will help in reducing cost and efficiency. Given that demand from non-metros and rural areas is intact and improving further, recovery can be much faster than expected.
“I believe that May and June have shown the industry that recovery could be faster than what people were expecting it to be in the month of March and April. So going forward we should fulfill what customers need, ensure availability and accessibility of our products, these will be key factors for any company for the next 5 to 6 months,” said Anil Rai Gupta, managing director, Havells India.
“If the companies remain strong and companies are agile there will be tremendous opportunities of gaining market share,” added Gupta
“While business has got impacted, those who will be able to manage cash flow and capex, will get opportunity to grow and capture market share. During this crisis we realized that short-term cost needs to be cut down, rather than long term costs. Long term cost which may be the good cost and need to be retained, whether such costs are for the R&D or to maintain capex. Because once we come out of the crisis we could have opportunities to gain market share,” said Gupta.
According to panelists, the Covid crisis has not impacted demand from non-metros and rural areas much and further demand from these cities and towns will chart out a recovery path.
Speaking at the event, Somany said: “I think it is a short term crisis, at the start of it our endeavor was to get rid of the inventory as early as possible. There is a reasonable amount of down trading, while we are focused towards margins and making value added products, but I think at this time dealers want a product which can provide them easy cash flow churn. So we have enhanced production of those products, so that his money doesn’t get stuck in stocks."
Even for Somany, demands from non-metros and rural areas are intact.
“We moved our focus from tier-1 towns to tier 3, tier 4 towns, not even tier-2 towns, so much so that even pre lockdown 70 percent to 72 percent of our sales were coming from tier 2, 3, 4 towns, and increasingly after lockdown we are seeing that focus shifting even further. I don’t have to say much but with migration happening, a lot of the work is happening at the tier-2, 3, 4 towns, cheap labour is available, there is some kind of fear psychosis, there is a pent-up demand and so on,” said Somany.
All the panelists were very vocal about the need for digitisation of the workplace and how it will change consumer behavior. “The biggest problem has always been adoption of new technology, but what Covid has done is the faster adoption of the technology,” said Gupta.
“We have about 1.5 lakh distributors, earlier our sales team had to go out to get orders, but after Covid almost 60-70% of our orders are coming through in-house app. This App is there since last two years, but no one was interested to place order through this earlier, but now they are doing,” said Gupta.
Speaking on how digitisation will help companies and consumers. Gupta said that, “cost is the biggest advantage of digitisation, and it also helps in improving productivity. I think 70-80% of work can be done digitally, and 20-30% work related to building relationships, for which physical contact is also important and will remain so.”
Adoption of technology is not a new thing, Agarwal believes that now companies and startups have to think a step ahead.
“What companies need to concentrate now is on how they can bring in process improvement or any kind of digital transformation that gives them an exponential change in what they are doing, not a 20-30% change in efficiency but a 2X or 3X kind of change in efficiency,” said Agarwal.
On being asked how digitisation will impact consumer behavior, Memani said that “Customer experience is changing dramatically – high quality digital servicing will become important; need to be hyper-local to ensure availability and accessibility to customers."
“When shifts happen, consumer behavior starts changing. Going forward they will restrict their visit to shops and departmental stores to buy materials, and once they get used to the convenience of buying online, a good combination of offline and online is the future, online will remain but offline will retain its importance,” added Gupta.
When Mittal asked how tension with China will impact businesses in India, Memani said that it will give tremendous opportunity to Indian companies. “Most Indian companies which were importing from China, I think they will now look to diversify their supply chain, either from other countries or look at local sources of manufacturing,” said Memani.
So if we assume that the trade deficit is $30-35 billion, if $10-15 billion that can be shifted in terms of manufacturing in India, that’s not bad,” added Memani.