The pandemic has highlighted that companies have to be agile and adaptive, for which they need collaboration, partnerships, and alliances, says Sanjiv Mehta, chairman and managing director of Hindustan Unilever (HUL), India’s largest FMCG company.
Speaking at Amazon’s Smbhav event, Mehta said that HUL collaborated with manufacturing and other companies during the pandemic to meet the rising demand of products like sanitisers. “At HUL we drove the fast recovery of operations through strategic partnerships,” he said.
Mehta also emphasised on the need for compassionate leaders in a post-Covid-19 world. Qualities that are promoted in leaders, like vision, passion, and skill, make them ill-prepared for recognising and alleviating human suffering in the face of such events, he said. “Put compassion at the center of leadership. 2020 has shown that it is urgent and necessary not just desirable to humanise leadership.”
The pandemic has also led to an acceleration of digital adoption as well as acceleration of digitalisation. According to a survey by EY, called Embracing digital: is Covid-19 the catalyst for lasting change?, the uptake of digital technologies and data solutions increased by 50% during the pandemic. Mehta pointed out that HUL’s B2B ordering app Shikhar enabled lakhs of retailers to place contactless orders during the pandemic. “The momentum of technology and digitisation should be leveraged to make a fundamental shift in not only business processes, but also in education and healthcare, in government’s in creating jobs, and easing the pressure on big cities while bringing development across the country,” the head of the Fortune India 500 company said at the event.
Mehta highlighted that enterprises that had adopted digital technologies at the core of their business were less impacted by the pandemic compared to others.” Many SMEs in India are at a low level of digitization, and there is growing awareness of the handicap it creates,” he said. According to the Ministry for Electronics and Information Technology (MEITY), India can create up to $1 trillion of economic value from the digital economy by 2025, up from about $200 billion in 2019.
“Leveraging technology in businesses will have a bigger impact on collective productivity gain that comes from widespread digitisation, both from the transactional efficiencies and from the innovation multiplier that comes on top of digitised processes,” Mehta said.
General trade is here to stay
In a panel discussion at the same event, Mehta predicted that e-commerce will grow because of the convenience and assortment it offers. However, he also sees modern trade bouncing back more in the form of small format stores compared to hypermarkets. He believes that general trade with over 10 million stores, meanwhile, will remain a dominant channel in the next 10 years. “It will not be as large as it is today but it is going to be a very different GT. It will be connected stores, it will be stores where technology has come in, it will be stores with a modern science of retailing has come in,” he said.
Meanwhile, Mehta believes that it will take a while before the world returns back to normal from covid, and that developing economies will take longer to bounce back. “Advanced economies and a few emerging markets may recover faster, but many of the developing countries could languish for years to come. This will not only worsen the human tragedy of the pandemic, but also the economic suffering of the most vulnerable,” he added.