A defining global health crisis of our time, the novel coronavirus is spreading widely.Along with an unprecedented human toll, the global pandemic has triggered a deep economic threat. In fact, there are predictions that the global economic impact could be broader than any that we have witnessed since the Great Depression.
While the virus continues to spread, it is no more a looming threat for retailers but a harsh reality.It has caused disruptions everywhere from the manufacturing timelines in Taiwan and China to the transit and delivery timelines of the freight forwarders. The early stages of what has now become a pandemic saw Chinese retailers struggling to meet the needs of both their workers and their customers. This is now a common scenario in countries across the globe.
The crisis that the world is facing right now has left several industries in a difficult situation, especially the retail segment which majorly relies on imports. Supply chain remains a rising concern for majority companies doing business in China, dragging them in a critical state. For many businesses in the retail sector, the trouble began as early as January 2020 when situation started to get worse in China. The coronavirus outbreak in China has thrown the entire supply chain out of order and companies are grappling to meet the demand and fulfil their committed orders. India, a major importer of electronics goods from China, is one of the severely affected countries because of the higher prices of Chinese electronic components caused by supply shortages.
Followed by a prolonged lockdown, even the stock that is ready with the retailers in the country, is not available for sale. With transportation and delivery of non-essential commodities coming to a halt in the lockdown period, everything seems at standstill. March, a month of financial year closing, is typically a period when majority companies close higher numbers than usual orders but to everyone’s surprise, everything got washed off.Many companies in the retail segment are expecting a further hit of 15% on their top line and around 25-30% hit on their bottom line.
If the situation continues for longer, the Indian economywill find it hard to recover as it was already witnessing a slowdown. As per a report by Retailers Association of India, the business had dropped by 20-25% by end of February itself when the coronavirus panic just broke out in India.Talking about the revival, retail sector will perhaps take the longest time to recuperate to its full strength. Due to the fear of virus spread among people, many will avoid walking to the stores to buy the products. However, e-commerce will be back on its feet much faster.
Measures to Deal with the Situation
Meanwhile, retailers must focus on re-designing their business strategy to fast-track their production to meet future demands. The aim is to keep the buffer stock ready at partner factories because a boom in demand is expected post lockdown. The businesses must drive towards ability to dispatch large quantities when the situation gets better. To substitute the losses, retailers must focus on being digital i.e. scaling up their existing online offering andexpanding in-store collection for online orders.
Government intervention is essential right now. Though it has taken favourable measures, the sector that has been growing tremendously and contributing significantly to the economy, needs more attention. It is expected that government will come forward to soften the economic blow rendered to the economy, especially the retail sector.
Summing It All Up
Though revenue streams of majority companies remain dried up, efforts are in place to upgrade the skill set of workforces like training on productivity tools and sessions by lifestyle coaches on Stress Management, Personal Styling, etc.
They key focus of businesses at this time should be tostrategise to overcome the losses when normal market resumes. Of course, a wave of fear and anxiety runs across everyone as businesses lie at stake. The fear of recession coupled with huge business losses, stockpile up and uncertainty on the situation, are all taking a toll. The only thing that can be done is to plan for future. Let us all pray the global health emergency settles soon.
Retail sector will take the longest time to recuperate and revive to its full strength since it has a several aspects that need to fall in place like people have to get confident enough to walk to the stores to see the demo and buy the products, healthy economy, stability and certainty. I believe, E-commerce will be back on its feet much faster, as it is already being considered to begin partial relaxations post 3rd May.