Covid19 - Bubble Business
COVID is an unprecedented situation in front of whole world. This gave many thought points in front of all. It changed the outlook of whole world. Everybody realised that depending on one product line is no longer a viable idea.
Demand started following an unprecedented graph. Demand for some articles swung up, where as demand for some fell-down. Certain products suddenly grew high in demand, distribution took some time to gear up for this. This caused a temporary vacuum in the market. This vacuum made provision for some business. These businesses are quick to yield. But lifetime of such businesses might be less. Once the supply chain gets regularised, or once the situation improves. Such businesses might perish. These businesses come and go like a “bubble”.
These businesses are amazing in nature. These businesses have a low survival rate. But the question comes, does these businesses do any good ? Well, the answer might vary. In my opinion, these business start with minimal investment and are quick to yield profit. Once the profit is reaped, those can be invested in some other place. Too much investment in this, can be a risky proposition. This is due to future uncertainty of demand, which means demand might fall any moment. So these are good for making some quick bucks.
Quick profit made, should not be invested back in such “bubble businesses”. Rather those should be invested into some other business, activity or work. Bubble businesses are temporary and those should be dealt like that only. It must not be taken as a long-term venture.
The demand for sanitizers surged manifolds. Following coronavirus crisis, their demand increased suddenly like anything. Many smaller brands got into sanitizer market. As per “Neilson COVID-19 Impact on FMCG & Retail: Edition 2” branded players made only 38% of market share in March. 61% of the market was captured by new entrants. According to Nielsen India, the market for local companies touched Rs 43 crores in March from Rs 10 crore year ago.
Facemask too saw an upward demand curve during this time. Many local companies started making this. Even designer masks too came up in the market. Many apparel companies made a move in this direction. As per Hindu Business Line report in April, in Kerala, women lead micro-enterprise under “Kudumbashree” – State Poverty Eradication Mission in Kerala – manufactured more than 14 lakhs marks. This is not only protecting people from infections but making some money for rural women. In Dibrugarh, in Assam, masks are made by an NGO Seva. In Damoh, in Madhya Pradesh, around 156 women produced more than 50 thousand masks. A statement made to Hindu Business Line by one of the Damoh women said that, in that way she could support her family till the time things turned to normal. In East Champaran district of Bihar, NGO Save the Children, along with rural people, is involved in production of masks. As per Indian Express report, 10 members team from Delhi, is working to spread the message of wearing mask, to produce and distribute a million mask to informal sector. “The mask for India” involves volunteers for this. They are in touch with NGOs in different states. This too encourages local entrepreneurship.
These are some really good businesses and employment methods during the pandemic. However, once the situation normalises, their demand might fall. Hence the profit earned from these activities need to be preserved for some other activities or businesses.
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