The COVID-19 pandemic, which began as a health crisis in early 2020, has rapidly evolved to become an unprecedented economic crisis affecting global, national, and regional economies and billions of individuals around the world. Organizations in service industries such as travel, tourism and hospitality have been hit the hardest. However, MSMEs have proved to be the backbone of the country, making a quick and strong recovery from the pandemic. A major reason behind this recovery has been the ease of adaptation. The opportunity-seeking nature of MSMEs combined with their innovative spirit and adaptable nature has helped them to diversify, moving from the traditional approach and preparing for the new normal.
But, diversification at a time when the economy is changing rapidly has to be backed with expertise, knowledge and calculated risks leading to not just sustainability but also growth. The small business owners that are part of the ASCENT Foundation cohort were able to adapt and diversify through the support of like-minded entrepreneurs whose experience helped them take the right decisions, after analysing all the pros and cons.
The nationwide lockdown as a result of the pandemic, accelerated the move towards digital healthcare and telemedicine, during this period, it was observed that there was a substantial impact on cancer patients in terms of reduced doctor visits and availability of treatment. In keeping with this change,
Ratul Lahiri, Co-founder and Director of Platinum One started a new healthcare venture called PurpleRibbon with the objective of making chemotherapy accessible and affordable to the masses, in the comfort of their homes.
“During the peak of the pandemic, we started Chemo@Home. We are the pioneers of the Chemo@Home model in India. Our team carries a portable IV stand, an infusion pump, and an emergency medicine kit to the patient’s home; IoT devices are used to monitor the patient’s vital during the entire duration of chemo. Being a new territory altogether, it was extremely challenging for us. As soon as I started my new venture, the lockdown got imposed. One of the key strategies was to take the digital route for marketing and fortunately, my ASCENT Trust Group has some extremely talented and passionate digital marketing experts and entrepreneurs. They always guided me on the right and optimum strategy for reaching out to the right audience.” Ratul Lahiri
So far, PurpleRibbon has 18 nursing home partners in the Mumbai/MMR region, with a plan to expand to 500 Chemo Day Care Centres across all tier 2 and 3 cities and towns by 2025.
The hospitality industry has also felt the brunt of the COVID-19 restrictions and lockdowns. The trend of dining-in reduced with a sudden shift towards cloud kitchens and big hotel chains launching home delivery. It became necessary for the hospitality industry to adapt to the change and ensure that the dine-in experience could be replicated seamlessly at home.
“When Covid struck, and restaurants were forced to remain closed for half the year, we diversified into delivery and more casual dining formats to appeal to the dining needs of the hour. We were exploring various new opportunities when Covid hit. During discussions with my ASCENT Trust Group, it was highlighted to me that I ought to review incurring large capex during a time like this. Furthermore, there was a lot of sharing of knowledge relating to employee management during the lockdown. As we shifted our focus to more of delivery business, it accelerated our need to become more technologically savvy and upgrade our IT infrastructure to compete with the fact that our customer base was now largely transacting online rather than offline.” said Gauri Devidayal, Founder and CEO – Food Matters Group.
The pandemic has also undoubtedly affected the traditional B2B distribution networks with a boon towards B2C distribution operations. Small businesses had to quickly adapt to suit the demands of the end consumers, a diversification from their existing, retail models. This called for ensuring product development and service directed towards the end consumers and their rapidly evolving demands during the pandemic induced lockdown phase.
Aditya Ruia, Co-Founder, Beco, an emerging eco-friendly household products brand added, “Our real journey started in the B2C space when covid-19 happened when the B2B trade was almost taken aback. There were alot of demands in the B2C space, which also required a major shift in the operations which primarily opened doors for us in terms of quality, packaging and dealing with consumers directly. By diversifying into B2C, we suddenly saw a spike in orders from customers for products that were not available to them directly in the B2B model. While earlier I was dealing with retailers and B2B business orders, the target audience changed after the pandemic as now I was directly dealing with the end consumer. The discussions with my Trust Group came in handy while I was diversifying as they helped me in not just understanding the expectations and needs of my customers but also assisted me in adapting my brand’s narrative. Moreover, the trust group kept me motivated and pushed me to achieve the higher goal while carefully mitigating risks based on their experiences.”
Commenting on business diversification, Archanna Das, Head of ASCENT Foundation said, “SME businesses in India have always been traditionally run. While earlier digitization and automation was considered ‘good to have’ it became a ‘need to have’ in the post pandemic new-normal and SMEs have been quick to adapt in order to stay relevant. This also paved the way for an array of opportunities for small businesses to diversify by creating new products or services, catering to an evolving market, venturing into a new industry or exploring new channels to reach existing customers. But with quick diversification as response to the post-pandemic new normal entrepreneurs also had to ensure risk analysis, careful decision making as the ecosystem was drastically evolving. Peer learning from like-minded entrepreneurs helped businesses in easy adaptation, careful diversification and risk-analysed decision making. Peer groups as ASCENT played an important role in ensuring smooth passage from these challenging times, especially for small business owners who look up to their Trust Groups members. Hence, diversification became an active conversation amongst growth ready entrepreneurs helping each other to explore new opportunities and share their exciting stories of possibilities that awaited them in the new- normal.”
Diversification step was taken by the organisations, not just with the goal of booking profits. More than that, it was about connecting with and reassuring their presence to the consumers during the pandemic and having a peer support group enriched the entrepreneurs with a soundboard, mitigating the risks and pushing them in the right direction.