Coronavirus Lockdown- How Serious Could Be The Impact On Businesses
The coronavirus has been declared a global pandemic by the World Health Organization. The ongoing dispersion of the COVID-19 has become one of the biggest threats to the global economy and financial markets, taking businesses, startups and employees across industries for a wild, and notably scary ride. To contain the coronavirus outbreak, countries across the globe are taking numerous measures including the restricted movement of people; locking down cities; closure of public places like malls, cinema halls, tourist sites with an appeal to stay indoors, social distance and avoid unnecessary travel.
From social distancing to curfews and government and state-mandated closures, businesses are suffering the hardships of COVID-19. According to the United Nations Conference on World Trade and Development, the coronavirus epidemic might cost the global economy $1-2 trillion in 2020, which has already given the feeling of pain to several sectors and the communications industry is no exception. The pandemic has come up with severe challenges for the economy of the country, causing a grave disruptive impact on both demand and supply-side elements that has the capacity to derail the growth story.
21 Days of Lockdown: The entire world has taken steps to curb the spread of pandemic coronavirus by staying home quarantined. Amidst the fears associated with coronavirus impact, India imposed a nationwide lockdown for 21 days. The world's largest lockdown means all factories, markets, shops, and places of worship are now closed, most public transport suspended, and construction work halted, as India asks its citizens to stay home and practice social distancing. The country will witness a lockdown kind of situation for three weeks, and if the count of affected people continues to rise, the situation might further exacerbate. Due to which the businesses, startups, companies and various firms at large are affected. The industries world over are also bearing the brunt including Aviation, Hospitality, Retail, Entertainment, Logistics, among many others.
Impact of COVID-19: The constantly evolving COVID-19 pandemic has cast a long shadow on the country’s economy, and it has been brought to a virtual standstill. Leading economists are saying that what lies ahead could be worse than the “Great Recession”, some go so far as to say- a depression lies in the near future. This comprehensive global shock comes at a particularly inopportune time for India when the country's economy was already on a very distressing downward trajectory since the turn of FY 2018-19. It has also severely impacted the supply side of the economy, that is, distribution of goods and services, its production, except for the essential items that are exempted. The impact of lockdown will also be felt through numerous channels, weakening of domestic demand, disruption in supply chain and turmoil in the financial market. All of this would result in declining production and retrenchment of employees. Such a prolonged lockdown in the near future is likely to be economically costly, with the brunt of the pain falling disproportionately on those in the informal sector.
COVID-19: A brief hiatus for the PR industry: Business is anything but usual right now, where every sector is wandering into uncharted territory. The coronavirus has left markets tumbling, where its ramifications to a swath of businesses and industries become more evident. The cascading effect of the coronavirus is cramping the PR (public relations) industry too.
Travel and tourism, auto and FMCG are the biggest spenders when it comes to PR activity and its services. With activity in these sectors abridged, revenues for the PR industry are hit, which in turn translates into a lower number of hires. According to the PR Consultants Association of India, the PR industry is expected to grow at 15 percent to reach Rs 2,270 crore by FY21. Every year, an estimated 1,00-1,200 individuals join the estimated 30,000 professionals strong sector. But due to the COVID-19 outbreak and subsequent market crash, the situation is worrisome. Newly joined staff members are too nascent to be put on crisis communications or regular client servicing.
The global epidemic has led to PR layoffs and loss of business: PR firms depend primarily on the revenue from the client, so now that companies are postponing events and pulling back on marketing due to the public health crisis, the agencies are experiencing losses of the business. Such companies have been forced to lay off employees while some are taking pay cuts to make ends meet through arduous times. Many companies are heading towards new technology and digitally based strategies to keep their business and relationships with brands afloat, in order to make the most of the crisis.
Time to form new strategies: With the headlines about the COVID-19 dominating the news, it’s challenging to develop PR strategies and plans and then execute them accordingly. However, there are still few things savvy companies can do during these uncertain times. With daily lives being uprooted, media coverage has transformed from writing about the outbreak itself to what this means for virtually every facet of life. The news cycle tends to follow a new pattern. Therefore, if your writeup or the piece of information does not fit in the first transition of coverage, you might be able to place your solution with a follow-up piece.
What can be done?: In the PR industry, events are a big hall game. That’s why a large part of the turmoil caused by the coronavirus pandemic is the delay or possible cancellations of festivals and events. Due to the prevailing social distancing, events, public relations firms are devising strategies to convert it into a closed-door digital event. Also, it is imperative for public relations professionals to adapt strategy in order to change in the outside world. They should be more selective while deciding the type of stories getting pitched in the wake of this crisis. PR plays a great role in providing thought leadership across industries. One just needs to be creative about how they present thought leadership to the media. Therefore, for PR professionals, how they adapt to remote-working and purvey to their client needs for the next few months will strongly determine their future. Thoughtful communication can also assure business continuity in the days and weeks ahead and minimize the near as well as long-term financial and reputational impact of the virus on your business.
Digital Media on surge: Messaging around coronavirus needs to get delicate as no one wants to capitalize on a horrific virus. Consumers today have a robust ability to filter out the opportunistic activity. It is not in a brand’s best interest to work to expand its audience but should focus primarily on reaffirming the company’s values to its most loyal consumers. These days, people are looking to digital and social media as an escape where engagement spiking through these channels is prominent. Also, most of the clients have an engaged audience which is essentially connected through social media.
Businesses around the globe have literally come to a standstill, and everyone is bleeding in an already challenging scenario. Even if the COVID-19 cases decline, effects of the lockdown will continue for at least a few quarters, and there’s a significant downside risk to FY21 earnings for sure, but effects could continue into FY22 as it’s difficult to say how the year plays out. Private stakeholders will not be able to regain the loss alone, without financial aid from the government.