Start-ups can be deemed one of the worst hit sectors due to the ongoing crisis. With limited liquidity and hold on the market, new ventures are bearing the brunt on all fronts with not only stalled inventory, but also the rapidly plunging sales figures, pushing them to a stage that might be insurmountable by the time the battle against COVID-19 is won.
Opining his outlook on the state of start-ups and their ability to survive the morbid situation, Maneet Gohil, CEO and Co-Founder of Lal10, says, “I believe things will be different from here onwards and we all will have to get accustomed to the ‘new normal’. The ones, who can quickly adapt to the ‘new normal’ by changing the business models and cutting down on non-crucial costs, will be the ones who will survive this black swan movement.”
It is now the onus of these entrepreneurs to find ways to sustain themselves or be forced into oblivion as the pandemic causes a global economic crisis.
A start-up’s take on the crisis
When facing a situation as unique as we see today, every entrepreneur has to strategise to maintain the viability of their venture to tide over difficult times. As many start-ups turn to the only commodities allowed to be traded – essential goods – others are looking to sustain the cash flow by allowing consumers to purchase non-essential products that will be delivered once the lockdown is lifted.
As Arijit Mazumdar, CEO and Co-Founder of Northmist, explains, “Amidst this grave pandemic situation worldwide and the lockdown imposed in India, our entire operational process has been jeopardised. With none of the courier service partners working, delivery of shipments is being delayed. Hence, retailing online has gotten majorly affected and experiencing a steep downturn.”
That being said, the constant circulation of money is imperative in an economy that has come to a complete standstill, in order to create a sort of safety net for the cash resources that are drying up. The purchase of non-essentials might seem a trivial activity to most, but is bound to help start-ups pay their artisans and employees who depend on the company’s income at this time.
Although demand has been affected, companies have kept their online portals functioning and engaged in a number of marketing tactics to bring in the orders. Re-commerce start-up Kiabza has seen orders fall to 30 per cent of the average, but is still working hard to entice customers to buy more. “The company’s orders have gotten affected drastically and have plummeted to only about 30 per cent of the average daily orders. Nevertheless, Kiabza has used its time prudently and introduced the ‘Loyalty & Referral’ programme in order to attract new and retain returning customers,” avers Nohar Nath, Founder and CEO, Kiabza.
“Additionally, the company has introduced discounts for customers to keep shopping, and we’re looking to ramp up our marketing more aggressively at this time. Other than that, the lockdown has afforded us the opportunity to re-work key aspects of our business and monitor them closely,” he adds.
Another aspect of ensuring a smooth transition from this phase to the sudden onset of demand post COVID-19 is to equip the team and prepare the supply chain to bounce back with ease. Tjori’s CEO and Founder Mansi Gupta is already working to handle the gargantuan inflow of orders once the lockdown is lifted. “The demand for our primary products has definitely fallen, but we have seen a good increase for products in our essentials’ range. The strategy we are currently following is planning down to the minutest of details and coming up with solutions for all possible situations and problems that could come our way, delaying deliveries or production. The alignment between teams has seen great improvements and a perfectly working team will guarantee deliveries and happy customers. As of now, we are also focusing on the demand for essential commodities that is keeping us on our toes to be delivered them on time,” she says.
Launching hand sanitisers and disinfectants along with a range of face masks and sanitiser sprays on its e-commerce store, Tjori is one of the many brands that are utilising its resources to fulfil current demands. Similarly, Lal10, the B2B venture that helps artisans and SMEs reach global retailers, is exemplifying perseverance in the face of adversity.
“At Lal10, we have utilised the skills and bandwidth of our sourcing team to aggregate the manufacturers of COVID-19 protective medical equipment. Our operations team has procured permissions and approvals for these essential goods’ distribution throughout India. We have done checks for the right certifications of the products so that you do not have to worry about counterfeit products,” maintains Maneet.
“We are determined to fight against COVID-19 using our learnings and strengths because this is our contribution towards the nation and this is keeping all of us busy at the moment,” he adds.
Many struggling ventures are also looking to the Government to help them tide over financial woes. “We are talking to other start-up entrepreneurs and plan to approach the Government collaboratively for some kind of relief. If the lockdown continues for a longer period, we have strategised to seek small-term loans to cover up the losses and stay afloat,” says Arijit, speaking on their efforts to seek respite. The Government has so far not announced any relief measures to help start-ups.