The experience of both companies and people during the pandemic have been noteworthy and very inspiring. New directions have emerged and fresh discoveries made. No doubt, the experiences will shape the businesses moving forward and shared lessons will ensure that the new directions are capitalised on. Sharing his learnings from the pandemic and preparation for future growth, Ashok Chhajer, Director, Krishna Lamicoat stresses the urgency to be prepared for future business growth, as the only way forward.
Like many in the trade, Ashok believes that there are opportunities in the global market as China vacates space in the apparel market, but he is quick to point out that the impending opportunities are only for those who are prepared and informed. “With China taking the beating with its cost as well as the negative vibes of the world towards them, it will surely open up opportunities to all. We have to be prepared to make use of this opportunity and not only on an individual level. Unless the Government comes forward and reforms labour laws, export policies and improves ease of business, we will miss the bus again. We have already lost many of these opportunities to countries like Vietnam, Cambodia, and even Burma,” reasons Ashok.
Lessons on how to support the apparel industry in a proactive way can be taken from our neighbours and competing countries. “It’s not as if the Government is completely ignorant of the industries need, and recently we have seen a lot of commitment for the textile sector, but much more needs to be done specific to the apparel segment. We have not learned from our neighbouring countries like Bangladesh, which have flourished on Government support to earn such a strong position in the global apparel trade. Basics need to be taken care of besides labour law and ease of exporting, like developments of ports, economical logistics between Inland Container Depot (ICD) and ports, transparency in incentives offered by the Government, easy to understand and implement policies, all of which will add to the ease of doing business in a highly competitive environment,” avers Ashok.
Not only should Indian entrepreneurs work towards grabbing business that is/will be moving out of China, but Ashok also feels that China has the potential to be a viable market for Indian exporters in the coming years. “My strong opinion is that in the near future, may be 3 to 5 years from now, China will be the biggest market for India to export all the goods where intensive labour is needed. Already the cost of labour in China has shot up to minimum US $ 700 to 800 and the only way they are able to sustain now is because they do not calculate the cost of investment and return on it, as it has already been covered. But whenever they will upgrade the technology which is likely in the next decade, the cost of investment will not be justified with the increase in labour cost,” he avers, adding that in the current scenario, the freight cost difference of minimum US $ 5000 to 10,000 in most of the sectors could also be a huge advantage for India on a short-term basis. “All India needs is scale and attitude to handle large business with ease,” says Ashok.
These insights clearly come from critical learning from the pandemic, when business around the world suffered, but some more than others. Sharing what he feels are the 3 biggest impacts of the pandemic, Ashok says, “I feel the biggest impact on business has come from the shift from physical retail to online platforms, leading to centralised distribution of products, hence reducing the quantity drastically which otherwise would be filling stores. Another major shift to note is customer spending, which is now more towards necessity (basics) over luxury. And the third biggest impact has been the overwhelming reality – survival of the fittest- as many units that were not competent enough to survive the impact of Covid, have closed doors.”
These shifts are now reflection of what the world is calling the ‘New Normal’ but the fact is that the direction was already there, the pandemic only ensured that the trend becomes a norm earlier than predicted. “World was already trying to be on a digital platform, Covid has surely made it happen faster than expected,” reasons Ashok. But the story does not end here and now it is up to the players of the industry to make the changes so as to stay preferred and relevant in today’s scenario. “Every company has to strive to be sustainable and efficient with capacities to meet the large demand that already exists, but which is currently not being met by India. They have to scale up operation size with fully integrated factories under one location to be competitive in the international market,” opines Ashok.
Good advice, but what about Krishna Lamicoat? Have the changes been implemented and the preparations made to face the new business environment? Ashok is very upfront in confirming that Krishna Lamicoat has always been working with future in mind. “In all honesty, Covid did impact the sales of both domestic and international business, adversely. However, we believe that this is only momentary and we are already working on setting up a factory with 5 times more capacity then present, which should be ready within next 12 to 18 months. We were able to sense the silence before the storm and are preparing to grab the increased business that will come our way, very soon,” concludes Ashok on a very positive note.