2020 was a transformative year, with Covid-19 altering the corporate landscape like never before. The year became a buzzword for disruption, from the pandemic upending our lives, to its enormous impact on the country's economy and, also, on various sectors. But it was also a year of frenetic corporate activities. Here, ten names from India Inc. pull out their crystal ball and offer their predictions on what to expect—and not—as 2021 rolls on.
The economy requires the automobile industry to grow and the growth of the economy is significantly affected by how the automobile industry performs in a country. This is seen in most big carmaking countries like the U.S., the U.K., Germany, France, Japan, Korea, and China. This new trend towards personal mobility is not being dictated by carmakers, and it’s not going to last when Covid-19 is under control completely.
It will take a year or so to change, but it’s certainly going to change because personal mobility is much more expensive for an individual than shared mobility. So, in the long-term, it cannot be personal mobility; people will move to shared mobility. If we find that the demand is inadequate, I’m sure the government will look at other options, including [a cut in] the GST rates because India’s taxation rates are much higher than the rest of the world.
The pharma industry came together to ensure patient access to treatments despite the challenges precipitated by the pandemic. From forging global partnerships and launching drugs that had potency to fight the virus, to collaborating across the value chain, Indian pharma stood true to its position of being the pharmacy of the world.
I envision 2021 to bring about a wave of reimagination with the industry evolving beyond its traditional role across the value chain—from episodic care to continuous care, from disease management to disease reversal, and from volume- to value-based care. The government’s policies towards promoting domestic manufacturing and export of drugs will provide a further boost in creating a self-reliant pharma ecosystem. At Cipla, we have embarked on a transformational path into a holistic healthcare solutions provider focussed on wellness.
The sentiment for 2021 is one of cautious optimism and the hope of a V-shaped recovery. We’ve been able to stay resilient and the past few months have been the greatest masterclass in learning to unlearn. Our attention is now on the post-Covid-19 landscape, to explore how new consumer behaviours will shape the future of the food and beverage industry.
The disruptive environment has bolstered focus on health and immunity, and packaged foods are well-equipped to serve this need. 2021 should see an improvement in consumer sentiment, but affordability will continue to be a purchase criterion, and our continuous focus on democratisation will help us. While the urban economy improves, rural has grown to be strong, and we expect this trend to continue. 2020 has thrown up opportunities to drive cost efficiencies through local sourcing and shortening supply chains.
The [Covid-19] crisis [has] activated the reset button. It showed us a trailer of what the future is likely to be. Organisations that are resilient, and prepared to pivot into new areas, will thrive. But the playbook will have to be written differently, marked by four key differentiators: Trust, the key currency; Agility, spotting opportunities in midst of a tailwind (e.g. cloud, collaboration, cybersecurity); Talent, businesses going where skills are; Innovation, that accelerates digital transformation.
The future of work has also seen an irreversible shift. From gig workers to the differently-abled, including higher women’s participation, the IT workforce will see a whole new range of competencies being added. And as sectors go deeper into the virtual domain, data generation will expand manifold. Using advanced technologies, India can unlock great value— approximately $500 billion in the next five years.
The rapid market recovery that we have seen has left all of us perplexed. The economy was slowing down before the pandemic; the pandemic expedited prevailing trends. While speaking to promoters of many listed companies, I realise one of two things: half are seeing significant pent-up demand and doing better than their pre-pandemic selves, while the other half are really struggling.
Nifty at its current multiple is expensive compared to historical averages; we maintain a position wherein we are hedging 50% of our longs at this point in time. I think this year will be less volatile. The pandemic brought with it incredible amounts of uncertainty around which sectors will live through the economic downturn. Markets often overestimate a problem to begin with and course correct with a vengeance. It might be prudent to focus on inherent fundamentals and ignore most of the noise.
While the economic activity has been getting back to normalcy, it would be naïve to assume that life will be as before very soon. Our policymakers have acted swiftly and decisively to cushion the impact and yet the after-effects of this shock are likely to linger on for another 12-18 months. Full recovery will require sustained policy support for some more time.
One of the most enduring impacts of this crisis will be the adoption of technology. Digital banking was already in play much before the pandemic, but its impact was largely seen in retail payments. The crisis has, however, brought to the fore the need for accelerated change across the entire business model. Technology spend is likely to be front and centre for the industry. Open banking, use of big data analytics, artificial intelligence, and machine learning are likely to be the areas where banks will have to invest the most.
For the auto industry, the biggest learning was that the fundamental need for mobility will never die. The year also made consumers realise the effects of clean energy on the environment. 2021 is going to be the year of electric mobility. The year will see the establishment of the connected [through technology] electric vehicle (EV) category, which has been in its nascent stages in India.
With multiple launches of high-performance EVs through the previous years, consumers will now have an EV in their consideration set while making their purchase. Consumers will be looking for sustainable and safe mobility, which will require overhauling the infrastructure. The technological advancement of the EV segment will not only enable purchase, but will gain precedence over traditional fuel vehicles. 2021 will be a breakthrough year for the auto industry, where one will witness the shift to electric for the masses.
In the limits of home confinement, stories became the only window to the world. As we bring in a new year, we believe the entertainment industry in India has every reason to be optimistic. Because great storytelling has always been the beating heart of our society. More than ever, people will look to entertainment—to escape, relax, laugh, be challenged, and bond together with friends and family.
Consumer habits have undergone a shift and in 2021, more audiences will opt for the convenience of streaming their entertainment, and they will have more stories to choose from. At Netflix, we want to have a robust slate of differentiated stories that are suited to the different moods of our members. We recognise that being part of the local creative community in India comes with responsibilities, in particular the need to develop the talent pipeline and give new voices a chance to be heard
The office is here to stay, but its format and function will change. There will be more renegotiations and renewals, elimination of touch points, new seating guidelines, and minimising usage of materials that spread the virus. Corporates would also accelerate their sustainability programmes. Employees will get the flexibility to choose from different emerging hybrid models: work from home, or work from office, or working from a co-working centre. Within the office, employees will get the flexibility to work in work zones, quiet zones, collaboration zones, wellness zones, work cafes, and semi social zones.
Work from home has its challenges: online fatigue, collaboration, productivity, performance management, and data confidentiality. To sum it up, office demand will broadly remain consistent with the pre-pandemic levels over the medium- to long-term. In the short-term there will be some pain.
When taking an overview of the year that has been, it is reassuring to see that the fear of flying in India is gradually reducing due to the safety measures taken by the airports. As a result, there is an increased sense of safety and comfort among the passengers. With the continued restriction on international travel, the industry will continue to rely on domestic aviation to sustain itself for the immediate future. Vaccination will play a pivotal role in improving the trajectory of the aviation industry, allowing safe global mobility.
With the continued support from the Ministry of Civil Aviation, the state, the regulatory bodies, we hope the industry will reach the pre-Covid-19 levels by 2023-24. At Chhatrapati Shivaji Maharaj International Airport, we will continue to undertake measures that will continue to instil the sense of safety in passengers, while simultaneously focussing our efforts to ensure sustainable growth
(This story appeared in Fortune India's January 2021 issue).