SECTORAL IMPACT OF COVID-19 ON BUSINESS
Blog: NASSCOM Official Blog
The current COVID situation has major economic consequences across the globe, and it does not look like any country will not be affected.
Small-business are facing the worst economic scenario due to the COVID-19 effect.
The regular cash flow is the livelihood of these small companies. Small businesses are vital to the economy of the nation whether there is a pandemic across India or America or any other country Access to cash is one of the key challenges for small businesses. Running any company is risky, but small businesses are particularly vulnerable. According to some survey, fifty percent of small business fails in the first five years because overhead costs like rent and other expenses leave little money for the businessman.
Start-ups faced challenges
According to a survey done to understand the impact of the COVID-19 on Indian start-ups, a majority of respondents stated that it would have an impact. About 30 percent of entrepreneurs felt that it would decrease demand for their products and services. And it happened demand for their products falls.
Segmental impacts on business
Consumer products and retail
After the announcement of the lockdown, the demand and consumption of FMCG and household products increased massively as the public got to panic about the availability of products and panic buying by the consumers and companies had to increase production. However, with the implementation of the lockdown and companies facing disruption across manufacturing and supply chain, there is a considerable slowdown in the growth of these products.
Consumer durables and electronics
The COVID impact is more in the consumer durable sector as it has a high dependency on china for product imports. Most of the electronics products are being imported from china. India also imports a bulk of consumer durables components from china. In these sectors, product prices may increase soon as the situation is extremely unpredictable.
Hotels and restaurants
There has been a massive decline in the food and restaurant business. Food delivery has become a major means of revenue in the foodservice business. Likewise, hotels and other linked business-like marriage halls have been directly impacted after the lockdown.
Travel and tourism
COVID is one of the severe downturns for the travel and tourism sector. As there was very slight or even we can say null growth in this sector lead these in great danger and so much impacted leading to a near-collapse of the sector. Companies have done salary cut off, work without pay for managing these losses.
Non-contact demand during the pandemic is expected to boost sales at smaller stores whereas supermarkets ensure supply of products at normal prices. Due to the pandemic impact on consumer behavior are changes to online. The establishment of an online platform is expected to become a difficulty for offline stores.
These were the only sector with the highest boom in the COVID times. There was a good supply chain and production for these as the demand was constantly rising in these sectors.
Impact on the legal sector
Employment of new lawyers in firms has also decreased or kept on halt because of Covid-19 impact on monetary on the legal sector. Independent Litigation practitioners had faced and still are facing many challenges because of the lower court being closed and minimal functioning of higher courts through the E-court mechanism. Corporate offices are stable because they have started work from home but still the efficacies are not up to the mark. Hearing through Video Conferencing is done by High Courts and Supreme Court advocates can work from home on virtual screens and hearing on important cases are done.
Impact on Real Estate
Both commercial and residential real estate sector has been hit hard by this COVID-19 pandemic, both in terms of sales and purchase as the people aren’t having enough liquidity. This pandemic has resulted in the closure of malls, retail outlets, and entertainment venues. This could lead to a hold in real estate deal.
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