Lockdown can be one biggest factors to change the way businesses use technology 
Lockdown can be one biggest factors to change the way businesses use technology |Representational image
IN-DEPTH

How COVID-19 lockdown is impacting businesses across Northeast

Many businesses across Northeast are laying off people, reducing salaries, etc. However, some startups are utilising this opportunity to reimagine & replan their enterprises

Simran Bajaj

Simran Bajaj

Guwahati: It was peak tourist season in Sikkim when India started reporting its first COVID-19 case. The tiny Himalayan state known for its astuteness and discipline implemented strict measures. One of its first decisions was to ban entry of tourists and those already in the state began their swift exit. The state relies heavily on tourism with over 20 lakh visiting every year.

The flourishing industry was the first to feel the impact of a virus which was still thousands of miles away. Overnight, hotels were empty, tours were cancelled and taxis had nowhere to go. The other Northeastern states followed suit.

Serial entrepreneur and Forbes 30 under 30 Asia fellow Rewaj Chettri from Gangtok, Sikkim is the founder of NE Taxi. Having founded 35 companies, he is no stranger to downturns but this is different. "Uncertainty of the lockdown is one of the biggest challenges at the moment which entrepreneurs are dealing with," says Chettri. His strategy to stay asset-light and tech-heavy has paid off. He and his small team are using the lockdown to develop new products that appeal to the millennials.

Gangtok’s MG Road which is otherwise filled with tourist wears a deserted look
Gangtok’s MG Road which is otherwise filled with tourist wears a deserted look EastMojo image

Hotels have been hit the hardest. Bjorn De Niese, director of Mayfair Spa Resort & Casino and co-founder, RightClique Hospitality, says that the hospitality sector has lost its peak summer season. The impact is severe on startups as well as bigger businesses. "Tourism is one of the largest hit sectors in the entire scenario. It’s fair to say a very large amount of the jobs have been hanging in the balance right now," he cautions.

Uncertainty of the lockdown is one of the biggest challenges at the moment which entrepreneurs are dealing with
Rewaj Chettri, Founder, NE Taxi

A few hundred kilometres away in Meghalaya, another young entrepreneur is fighting the COVID-19 battle. RK Vijay Byrsat, managing director, Centre of Learning, Knowledge & Services (COLKS), works with farmers empowering them with information and creating financial linkages.

“It is harvesting season across the country, and there was initial damage to crops because the produce could not be sent to the markets because of the lockdown,” says Byrsat. He then got together with other entrepreneurs and got help from the Meghalaya government to start procuring directly from the farmers to supply to the cities and towns. They also started home deliveries.

"However, looking at the scenario, it will take time to recover. This is the new normal. Markets are not usual. The logistics and communication has become difficult as not everyone has curfew passes. And even if you reach the market, deliveries to consumers are a challenge," added Byrsat.

COLKS with the help of entrepreneurs and Meghalaya government will start procuring directly from the farmers to supply to the cities and towns
COLKS with the help of entrepreneurs and Meghalaya government will start procuring directly from the farmers to supply to the cities and towns COLKS

In Manipur, the startup hub of Northeast, some technology companies are smelling opportunity. Lairenjam Niranjan Singh, director & CEO of JCRE Skill Solutions, says, "I was speaking to a tech startup here (Manipur), and surprised to know that they are actually making money now. Since everyone is at home, parents wanted children to get engaged. Offering their product, the startup made a revenue jump of 20-30%. However, other startups are badly hit."

I was speaking to a tech startup here (Manipur), and surprised to know that they are actually making money now
Lairenjam Niranjan Singh, director & CEO of JCRE Skill Solutions

Startups are hit because the internet is still a luxury in most parts of the region. About 20 million people are connected currently but speeds are abysmally slow in smaller towns and cities. Dr Tejbanta S Chingtham, CEO, CEO, AIC-SMUTBI & Mentor of Change at Atal Innovation Mission, Sikkim says startups being incubated at their centre are facing problems post lockdown because of low bandwidth at their homes. The startups have three dedicated internet lines at the incubation centre.

Meanwhile, in Guwahati, Assam, where internet connection is relatively better, Pallav Bagaria, director of Sapient Wealth Advisors, is seeing a cost-saving opportunity. "This entire lockdown has taken the technology advances that a normal startup needs to have to the next level," said Bagaria, adding that “initially, many employees were not comfortable with technology, which has now changed significantly,” he said.

"Lockdown can be one biggest factor to change the way we have used technology to a large extent," he asserts.

Lockdown can be one of the biggest factors to change the way we use technology to a large extent
Pallav Bagaria, director, Sapient Wealth Advisors

Northeast is fast emerging as a region for talent in the media and entertainment sector. Tanushree Hazarika, co-founder & director, Atvi Infotainment, sees very little opportunity in the short term. "Right now, TV and digital [news portals] are doing well. It’s good in the sense that viewership is increasing, but the bad news is we are very advertisement dependent, which has been slashed."

Whenever there is uncertainty the first thing companies do is cut their advertisement budget. “This will stay that way for at least two quarters (six months) till corporates are comfortable again to start spending on advertisements. Till then, media and entertainment houses have to survive on a tight budget,” she says.

Right now, TV and digital [news portals] are doing well. It’s good in the sense that viewership is increasing, but the bad news is we are very advertisement dependent, which has been slashed

Tanushree Hazarika, co-founder and director, Atvi Infotainment

What are companies doing to survive?

Bagaria of Sapient Wealth Advisors believes that venture capitalists (VC) will look at businesses they want to invest in differently. "They will focus on more profitability rather than on the scalability of a business," he says.

“But at the same time, we have to look at this that every crisis builds an opportunity,” Bagaria opines.

De Niese of RightClique Hospitality thinks that collaborations are vital to survival. "We need to get back to the basics, the roots of our businesses. We need to trim it, be decisive. There are jobs that will be lost, let’s not sugarcoat anything. But this also an opportunity for collaboration, imagination and losing egos. In the sense that, you need to let go of your ego and collaborate with someone to keep your head above the water."

Serial entrepreneur Rewaj Chettri feels the need to keep both the short term and long term vision in focus. "We need to survive that's the short term plan, but beyond that, we need to have a long term plan to prosper and grow. Save the travel business in the short team and for the long term, we are diversifying our client segments our businesses are catering to,” he says.

You need to let go of your ego and collaborate with someone to keep your head above the water
Bjorn De Niese, director of Mayfair Spa Resort & Casino, and co-founder, RightClique Hospitality

Byrsat of COLKS believes in a dual approach, first, adapt to survive and adapt to thrive. To meet the former approach, they are working on scaling up their business to take farmers produce across the country, as interstate border are open for essentials. "The second part is, adapt to thrive, that is, where we are trying to anticipate in the future. There are things we are figuring out with our team, trying to adapt to the future and trying to anticipate."

Sapient Wealth Advisors' Bagaria is using the lockdown to connect with their 12,000-odd clients in the Northeast. “Over the last one month, we have connected with all our clients and partners on cyberspace,” he exclaims. "Earlier, we had to arrange for a huge space for the meet and everything in Guwahati, and now sitting at home we are connecting with them through webinars by top personalities from the country, and addressing the clients from across the country."

Dr Chingtam of AIM-SMU says that this is a difficult time for entrepreneurs. "In the next 3 months to 1 year, VCs will try to recover the funds they have already invested,” he cautions. "I have been advising the startups at our incubation centre to go back to their drawing board, playbook, and recalculate their runaway money. Whatever was there 30 days ago, there will be a change in it. As a founder of a startup, you are the captain of a ship, your ship is sinking, you are looking at a lifeboat, what are the things around you'd like to take along with you. What is the most minimal thing?" he says.

As the lockdown continues, OTT  platforms will go on a buying spree
As the lockdown continues, OTT platforms will go on a buying spree Representational image

Niranjan Singh of JCRE Skill Solutions says the world is converting to a "low touch economy". “As, we don’t want to touch anything like doorknobs, and are constantly disinfecting them. People are living in anxiety. However, there lies an opportunity here for healthcare startups and robotics/drones driven by Artificial Intelligence (AI),” he says.

Brick and mortar shops have taken a hit, while e-businesses thrive. "But giants like Amazon have not been able to reach my or your house, (in Northeast), I ask myself a question, though we say online and tech business is the thing, but it is always driven by an offline business, the logistics, warehousing etc. So when the borders are sealed, how do we deal with it? business, like Amazon, needs to get hyper-local. Have warehouse in Guwahati/ Imphal etc," added Singh.

In the entertainment world demand could be fuelled by social distancing and lockdown. But with production houses also on lockdown who will make fresh content? Atvi Infotainment's Hazarika believes that OTT (over the top) platforms will go on a buying spree, and even old content is likely to be acquired.

How do we become future-ready?

Sikkim's Rewaj Chettri believes that the forward for startups is to stay light. "Imagine if you are a bucket, and right now it just has a jug of water. That is the way forward for the startups."

The baby who cries loudest gets the most attention. Business in the Northeast must together make a lot of noise for the Central government to hear us at this dire time
Pallav Bagaria, Director, Sapient Wealth Advisors

Vijay Byrsat says it is difficult for agribusiness to be asset-light. “One needs to have warehouse, logistics and machinery. Our go-to-market strategy is to push us into an agri-tech model. We need to be sensitive towards the consumer and the world around you. We need to build a robust infra for dealing will consumers," he adds.

AIC-SMUTBI's Dr Chingtam suggested retrospection to the time of 2007-2008 recession model. He says, "If you look at those times, investors choose early-stage startups. More promises with lesser investment and lesser risks. So, early-stage startups can expect fund coming in [post lockdown]."

Meanwhile, Bagaria wants businesses to conserve cash, every bit possible. He also feels that need to reach out to the government for help. “The baby who cries loudest gets the most attention. Business in the northeast must together make a lot of noise for the central government to hear us at this dire time,” he adds.

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