The impact of the pandemic was the reason for the loss of jobs and pay cuts in the manufacturing and allied industries.
Just as we are getting into the festive fervor, there are sufficient supporting data points that give us hope and reason for the industry to celebrate this much-needed booster for recovery from torrid times and declining business results.
Though there is a heightened spirit on the buoyancy that revolves around the growth of e-commerce and retail, one needs to back the upcoming positive results with statistical data that is hope driving and testimony of what is yet to come.
Let us get down to the key triggers on why this festive season is being seen as a harbinger of better times. The year 2020 was topical to Covid-19 and attributed to literally changing not only the way we live but negatively impacted the industry landscape. The impact of the pandemic was the reason for the loss of jobs and pay cuts in the manufacturing and allied industries as manufacturers were deprived of cash flows to maintain the status quo due to the national and state-wise lockdown.
To add to the woes, the banking sector too played its part by being risk-averse and started alienating the smaller companies and regional manufacturers. But as every saga has to end and end well; and this coming festive season and the buoyancy around it is giving the much-needed hope for not only a revival but it can propel organizations onto an organic trajectory too.
Some of the core reasons why this change would possibly be the catalyst for better times ahead are;
Retail Sector Resurgence:
Cause: With active Covid-19 cases in comparison to 2020; active cases for September are averaging around the 34,000 mark and we are at 39 percent of active cases in September 2021 comparative to September 2020. Besides this encouraging Covid-19 statistic, India currently has more than 46 percent of its population vaccinated with the first Covid-19 vaccine dose and 16 percent of the population who have already taken both doses.
The Effect: These two encouraging data points would encourage more people to step out and get back to their normal shopping ways, thus giving a boost to traditional touch, feel and experience retailing. The distribution of products and in-store retailing will get the much-needed thrust that will enable the revival of the retail segment.
E-commerce Growth Propellers:
Cause: Though industry experts and business consultants have projected 30 percent growth over last year with a GMV of $4.8 billion, this 30 percent projected growth is primarily driven by the emergence of Tier-II and Tier-III cities that contributed to more than 57 percent of the 2020 GMV. This statistic though bullish may have its part to play but putting a bet on last year's trend may not really be the right thing to do.
The Effect: What was missed last year was the festive feel and most buyers would like to get back to normal and do what most Indians like to do when it comes to festivities which is to go to the market, experience, and witness the products they like to buy and get the feel of what they buy besides getting the pleasure of a bargain.
This effect of wanting to get back to normal, 3rd wave is not expected to be coming soon and with Covid-19 restrictions not that stringent, assuming a 17 percent to 20 percent growth on the back of both metro and non-metro traction is what is most likely to be attained and the reason why e-commerce may not see the 30 percent growth projected.
Irrespective of which channel does well, I am in favor of the manufacturers getting their products out there for customers to buy from them and their channel of distribution. With a large number of e-commerce companies focusing on aggressive tactical campaigns to induce the buyer the scenario this year will definitely be better than last year. It is in this festive spirit that I wish both traditional retail and e-tailers the very best for the coming festive season.