All the new statistics and future predictions about the economic crisis are confusing and scary at the same time! The most affected businesses would be the MSMEs and startups who are yet to establish a strong base!
From what I have studied about the investments perspective of Indian startups, they are mostly dependent upon the cash flow from VC firms, PE funds and to some extent angel networks! The huge investment coming from a South Asian giant is critical for almost all the Indian unicorns. But lately that particular South Asian enterprise has landed in trouble with its few investments.
It would be really interesting to know how these unicorns keep themselves floating amid this crisis. It's being said that, survival is all the more important than anything else. The cash left with most of these unicorns is only sufficient for a couple of months. They have to plan their strategy quickly yet effectively to stay in the business.
When we try to think logically, what alternatives do we think of? The usual answers would be, business diversification, a possible pivot or effective marketing gimmics which won't cost the company much but would fetch more customer base. But don't you think all these are extremely risky especially in the time of this severe crisis? It would be extremely critical for a startup to decide their business strategy for the near future. It's a do or die game!
Talking about some of the best unicorns, who were an integral part of the lives of people in most of the Indian metros are now diversifying into totally new lines of business. Food delivery giants like Swiggy and Zomato have ventured into online grocery delivery. Swiggy particularly has been preparing itself to be a last mile delivery game changer. It recently acquired Suprdaily, for the daily delivery of milk, bakery and other essentials. But Dunzo is giving a tough competition to Swiggy already. The fittest of them would survive and eventually win this last mile delivery war.
Swiggy is few steps ahead, trying to venture into online alcohol delivery. On the other hand, it has closed its cloud kitchen business recently with the aim of saving on the expenses. A diversification along with a closure, what does their startegy really indicate? Would it be purely demand based in future?
Amazon is currently piloting food delivery in India, it would be a huge competition for the food delivery unicorns if Amazon is successful. And one of them might want to get acquired by Amazon, let's see what future has in store for these last mile delivery companies.
Zomato on the other hand has recently acquired UberEats, India. Without much of diversification, what would be Zomato's change of startegy? Would significant changes be coming up in their subscriptions and memberships in future? It is being predicted that, dining in restaurants is going to pick up pace very slowly in the post Covid 19 era. Where do Zomato subscriptions stand in then in post Covid 19 era?
On the other hand, ride sharing services such as Ola and Uber offered their services for emergency and essential travel during the first few phases of the lockdown. That temporary pivot helped them in atleast keeping the moral of their drivers high. It would be really commendable of them if they decide some employee centric business model to sustain this crisis.
When all the other startups were struggling for survival, the grocery ecommerce companies have struck gold. Apart from struggles of manpower management, companies like bigbasket and grofers have been doing extremely well. Does this mean, that essential service companies would definitely survive the crisis? Customer panic buying is definitely responsible for this sudden surge in demand.
Consumer behaviour and psychology need to be very carefully studied before formulating any critical business decisions and strategies in the coming times. Taking calculated risks might be the success mantra. Time can only answer which startups would survive this crisis and how? But till then, it would be fun to see and analyse their new business strategies...
P.S. A unicorn is a startup with a valuation more than or equal to $1B.
No comments:
Post a Comment