The long-running India story has been built on three pillars: stable politics, skilled demographic and consumption economy. The world has looked towards India as a growth-driven long-term opportunity. Our competition with China is real, and we thought we will win this battle in the near future. The last one year of pandemic has changed this story, and now the change may be systemic and even long-lasting. All three pillars of the India story have crumbled.
India’s draw of stable politics is under the scanner now. The international eye on India is not about stability in polity, but of inaction and cluelessness. In just 90 days, India has gone from story of the future to disaster of today. From Davos to the G-7 summit, there has been a sea change in the India narrative. The political story of India is not about stability; it is now about ineptitude.
THRIFT IS BACK
The second is about the skilled demography of India. India has been one of the most optimistic nations in the world. This optimism reflects in how the consumer sentiment is in India. Our growing consumer market reflects this optimism. This has come to a halt.
Today, the sentiment is definitely negative. We are seeing thrift come back into fashion, people are cutting back on consumption, and in the coming months, almost every segment in India will see a dip. The growth story is over, what we will see is a contraction in size. There is a fundamental change in the structure of the markets. We will see a dip in the retail market; we will see shops shuttering, we will see brands disappearing, and despite the growing e-commerce segment, we will not see growth in many years.
The third is the economy that is seeing a long-term contraction. This contraction is leading to stress in the money market as the money supply has disappeared. While India is witnessing a wave of unicorns and rise of start-ups, those are outliers and do not reflect the real state of the economy. The infrastructure in India is stressed and the slowdown is so massive that the restart and coming up to speed will take a long amount of time. The stress on capital has straight impact on consumerism.
A NEW JOURNEY
The real damage that India is suffering today by losing its most talented citizens to the virus cannot even be estimated. These are the bunch of people India would need to recover. The loss of resources and its impact will be felt over the next decade.
Every truism that we have come to know of India has come to an end. We the professionals who work in marketing and advertising have a massive challenge in front of us. We have to relearn the way we create stories of persuasion. The 90s called and it wants its brand theories back.
What does the future hold? We have to embark on a new journey, and that isn’t going to be easy.
(The author is Co-founder and CSO, Bang in the Middle)