Vocal for Local
ABSTRACT
The purpose of the study is to understand and analyse the effect of the once in a century virus which has changed the dynamics of the world for once and all. It has taken a toll on daily living like never before and the world seems to be upside down to the bare eyes of commoners. The study focuses on the adverse effect of different sectors and the steep rise in other sectors like pharmaceutical, chemical, etc. The study will further focus on the promotion of local markets and local players in the domestic market. It gives due importance to the role of government and its mechanisms to further push the case. At the same time, it will help to identify the potential market leaders in the domestic as well as international markets. The study will further help in the process of accelerating the sparks of the local market across the globe while we breach the pandemic with our local products and services.
Keywords:
Vocal
Local
GDP
Price
Demand
Trade-exchange
Import
Export
Self-reliance
Swadeshi
Atmanirbhar
Promotion
Market
Globalisation
INTRODUCTION
Where are we in this new century? Two decades have gone by and we are still searching for our local market to flourish in front of the world. This sounds ridiculous to the bare ears of a youngster. Doesn’t it millennials? The other day, someone whizzed past me saying that we are the largest democracy in the world and its time to take a leap in the international market by promoting local products and services. As the young man passed by and dusk took over the grass laden path, I asked myself time and again after our short meeting, are we really on the right path? Are we walking that extra mile to achieve our dreams as a nation? Do we really care about our local markets? Do we lack talent? Do we lack quality? Do we produce enough for ourselves and others? While questioning myself, I went back to my apartment to hear the speech delivered by my honorable Prime Minister. As I was walking through his speech on ‘Vocal for Local’, I realized that many have deceived and bluffed me over the years by saying that it is unachievable. In a couple of hours, my mind was trotting on the beautiful streets of the cities and villages of India: the country of cultural diversity and opportunities. In the next few hours, my mind kept on telling me, why not? Isn’t this the hour we should look after our own men and women who are still fighting to make this country greater? Aren’t we running behind the international markets and trying to build a palace out of a rubble? Aren’t we chasing the wrong contingent when we have everything of our own? Isn’t this the hour to value our brothers and sisters who have given it all over the years to help us live a better life? With a plethora of questions, I dozed off to bed and I woke up with only one thing in my mind: this is the hour to excel and this is the ultimate moment to seize the local market for once and all.
In the past two decades, the industrial growth was not significant in India. Major impact was observed in the performance of core manufacturing industries, and despite several corrective measures taken by the government for sustainability of large firms, successes were few and far between. To boost the economy, more emphasis was given to service sector after observing the huge contribution of services in developed economies. Another peculiarity of the Indian market was the dominance by a few large players in almost every sector. These large players were, in effect, cannibalizing the small firms since they were not in a position to compete with large firms in terms of innovations, market share and policy framework. But COVID-19 changed all the calculations, people lost their jobs and incomes fell leading to reduction of buying capacity. As a result of that performance of large firms went down the line and people expressed a clear preference for products which are local made and available in nearby market. In India, rural markets present a great opportunity because of the saturation of urban markets. Therefore, the pandemic has presented a great opportunity for local players to establish their brands and markets with limited resources which they failed to do in the pre-COVID-19 era.
The Indian market comprises of urban and rural and there is a significant differential nature of buying pattern, customer preferences, liking etc. The rural market and industry mostly depends on agriculture and allied industries. But in different studies and debate, it says that there is a need of rapid revolution in the rural product and rural market. As a result, the overall development of the country will amplify. The VOCAL FOR LOCAL concept emerged recently in India and the moto is to be self-reliant. If this succeeds than we will get all round positive changes in countries economic, socio-cultural scenario. If we look into government initiatives, they mainly try to promote MSME which are the key drivers of country’s economic growth in recent years. MSME mainly operate by looking into local resource availability, combined with entrepreneurial skills and also limited market coverage. In this regard the small firms need to develop the brand which is required by a particular geographic region. Initiatives such as dairy firms, food processing units, restaurants, bakeries, jewellery manufacturing units, packaging industries, horticulture and many more which can emerge from local resources where people does not require high skill, promotion and pricing strategy. In this present situation, it is very much possible for the small firms to develop their business strategy by looking into the needs and demands of the local market and in terms of resources, it is easy to get the resources which are available in the surroundings. India is a country where people have a tendency to prefer branded products and also foreign made product. But this thought is going through a change now and people are developing their mindset to buy local products. There are so many industries such as FMCG, Electronics goods which are experiencing higher demand for locally designed products which have taken into account specific local requirements. If we follow Porter’s five force model which states that there is a big hurdle for market entry of local firms, suppliers were working under the constraint of market dominance by big brand. Local products were not getting proper leverage due this dominance by established brands, but now the door is open to small firms to operate without taking help of the larger firms because lot of initiatives and benefits are provided by the government in terms of finance, technology and also training support. The VOCAL FOR LOCAL concept also emphasizing the root of development which is more connected with rural India resources.
What is VOCAL FOR LOCAL?
Vocal for Local’ is a concept which dates back to the era of the Swadeshi movement which stared in 1905 as part of the Indian independence movement. As an economic strategy, it helped develop Indian nationalism at the time. After 1947, in the 1950s and 60s we followed a conscious, socialist pattern of development to create and grow a base of domestic big industry. However, this minimized competition and also encouraged protectionism. The era of the 1990s saw a liberalization of the economies across the world, including in India. This led to an infusion of FDI and big investments from MNCs and corporate houses and several joint ventures which made India very competitive. My stint at Hindustan Unilever gave me a ringside view of large scale new investments and launch of several new product categories and acquisitions of brands. Indian IT, ITES and BPO companies were able to take advantage of this world market to become dominant global players. But this also led to a decline in some verticals in the manufacturing sector and we witnessed the emergence of South Korea, China and Taiwan as the new hubs of manufacturing.
So ‘Vocal for Local’ would have been a brilliant strategy for some sectors in India but definitely not in most of the sectors. While ‘Vocal for Local’ is a great idea, we have to recognise that the realities of the global environment have changed significantly. It is no longer possible to create globally competitive products without access to globally competitive resources, and without creating globally competitive synergies.
Times have changed radically. India depends to a significant extent on the import of energy, especially petroleum crude, and the modern world economy is a complex web of tightly interdependent value chains where market competitiveness is determined by the two holy grails of price and quality. The automobile industry is a perfect example of this. Today, I may be driving a car where steel has been sourced from China, styling has been done in Italy, and manufacturing has been done in Germany, with components sourced from India. There is an undeniable value chain which operates to create a globally competitive product. Companies which are unable to take advantage of such multi-location, competitive manufacturing strategies get acquired by competitors. Tata Motors' acquisitions of Land Rover and Jaguar are prime examples of this trend.
India has a massive textile industry producing world-class textiles. However, the competitive pricing by Bangladesh and Vietnam creates such a powerful advantage that companies from all over the world get clothes manufactured there. Textile manufactured in India is sent to neighbouring countries to be manufactured into readymade clothes. Later these products are sold in multiple countries. This is a clear example of the value synergies global brands create in order to attain world-class competitiveness.
Indian food is extremely popular in London. However, surprisingly, most restaurants there are not operated or owned by Indians. Communities from Bangladesh dominate Indian food restaurants in London. Similarly, the Patel community dominates motels all across the US. The primary reasons for success in these two instances are the advantage of cost competitiveness.
While the ambition to create India as a viable centre for manufacturing as compared to China is commendable, Indian manufacturing cannot provide any advantage unless price competitiveness can be created and sustained. This is the only way to attract investment from domestic and foreign players.
In the past 3 decades, India has built formidable strengths in brainpower dominated sectors like IT and ITES, BPOs and several other industries which provide large numbers of jobs to educated youth. The services of these industries provide valuable foreign currency and employment to millions. If the concerns of these industries could have been addressed, it would have been a step which would have helped millions of workers and their companies. ‘Vocal for Local’ would have been better implemented if we had been able to support many of these industries directly.
India has done particularly well in the dairy sector but has not had a huge amount of success in oil and energy. Additional backing to these sectors would have provided better support for these industries to grow. In FMCG, we have done reasonably well but the sector needs more stability in pricing and new innovations. We have seen homegrown brands like Yoga Bar on the shelves of supermarkets in a category which was heavily dominated by imported brands earlier. These sectors could have done with more direct support.
Production of fruits and exotic vegetables is doing well in India and this sector has a high potential for export. While the industry is doing well in introducing new fruits like kiwi, strawberries and plums, we are not doing well on some fruits which have had traditionally strong industries like apples, pears, walnuts, almonds and other dry fruits. A key consideration for self-reliance is to build businesses which are competitive and able to create a strong value chain via brand, package, price and channels. Direct assistance to these industries would have helped create a stronger and more competitive presence.
MSMEs are one of the most important sectors of the Indian industry. They play an important role in almost all sectors, especially sectors like auto and auto components, supply chain and several other manufacturing sectors. The MSME sector should have been infused with direct cash relief. The weak link in the chain can deprive larger industries of supply. Strengthening the chain from its weakest link is certainly the logical and correct way to go.
‘Vocal for Local’ should protect industry -- yet not lead to protectionism. The Indian startups across various sectors like Zomato, Ola, Oyo, Paytm and many others would suffer severely if countries across the world suddenly adopted protective policies. The world is looking at Indian pharma to supply the coronavirus vaccine and several pharma companies are in the race to deliver. India, like the rest of the world, is certainly going through a tough phase, but will still shine due to its vast pool of educated talent, its huge demand centres, the resilience of its entrepreneurs and the unflagging spirit of the Indian people.
In every sphere, development comes from complete freedom and the strength of freedom lies in being financially independent. Since the dawn of Independence our freedom fighters have fought hard to establish the need for supporting our own country men by promoting a fair demand for their business and encouraging them to rise higher and climb upto the international ladder. The concepts of growth and freedom are complimented by demand and money. Hence, to set a proper pace to the growth of our GDP, the focus on purchasing and promoting the concept of "Swadeshi" is extremely important.
What is a market?
> A market is an arena of commercial dealing and transactions between buyers and sellers interacting under the laws of demand and supply. Market can be classified into (1) Perfect compitition, (2) Monopoly, (3) Monopolistic and (4) Oligopoly.
What are the factors that affects the market demand?
Population: directly proportional.
Population composition: if the majority of population belongs to the working or the retired class of people.
Government policies: Favourable government policies increases the demand and visa-versa
Credit policies: favourable credit policy adopted by various commercial banks instigate consumers to buy various commodities.This leads to an increase in market demand.
What are Imports and Exports?
The goods and services that are purchased from another country rather than buying domestically produced items are called Imports. Imports lead to an outflow of funds from a country.
The goods and services that are produced domestically and sold to customers from other countries are called exports. Exports lead to an inflow of funds and adds up to the nation's GDP.
What is the need for Trade-Exchange?
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The allowance of trade-exchange has endowed the nations with the availability of various resources and technologies that might lack in their own country. it also helps national economies grow and expand by selling the rare surplus goods produced into the international market and purchase the technologies and resources that it may lack from other countries for an overall economic development. This also creates a better business relationship with other countries and keeps the raputation and co-friendly relationships afloat.
What is Atmanirbhar Bharat?
On 12th May 2020, our honorable Prime minister Shri Narendra Modi announced and raised the vision of a self-reliance India under the COVID crisis. He explained the significance of standing by the business of our own countrymen and encouraging them to do better by purchasing goods and services from the local markets. He also gave example of the Khari industry that has achieved a global recognition due to it's increasing demand in the national market. The prime minister has also addressed to the nation an economic package of Rs 20 trillion to tide over the coronavirus crisis under the Atmanirbhar Bharat Abhiyan. He said that such an economic aid would help the labourer, farmers and cottage industry to become self-reliant and adapt the campaign more efficiently. However, the core of this campaign lies in being self-sufficient and is completely different from self-isolation or cutting itself off from rest of the world.
According to the vision, Self-reliance doesn't mean advancement towards a close economic system or shutting down the import business in the country; rather it advocates the fullest utilisation of public demand for 'Indian' or 'Made in India' goods.
Turning through the pages of history, although the concepts of 'Swadeshi' and 'Boycott' went hand in hand, in the modern independent India, the Atmanirbhar Abhiyaan focuses only upon the purchase and promotion of local goods and services which would help in balancing the economic depletion due to the pandemic situation.
Thus, containing the elements of Swadeshi movement, Atmanirbhar abhiyaan paves the way towards owning the 21st century based on five pillars:
1. Economy
2. Infrastructure
3. Technology driven system
4. Vibrant demography
5. Demand
Objectives of the Study
To help the local market flourish and to promote the MSME’s in these difficult times.
To help the MSME’s in terms of higher productivity, finance, raw materials, legal agreements and labour contracts.
To help the MSME’s in terms of entering the untrodden path of pharmaceutical industry and related markets.
To identify the potential MSME’s who can be market leaders in both domestic and international markets.
To accelerate the Covid19 vaccination process thus by promoting the sparks of the local market across the globe.
Current Situation and key Highlights
The world will never be the same again. Accept it sooner than later.
The year 2020, needless to say, has seen the collapse of various economies of the world. The pandemic has brought one of the worst global recessions of recent times where the nations were compelled to shut off their businesses for months. This lockdown for an indefinite time had led to a blurred future worsening the situation. MNCs and big companies have suffered heavily the consequences of poor consumer demands and forced legal restrictions. Huge number of people have lost their job as the economy came to a complete stand-still. The fluctuations in supply and cancellation of projects have cost the manufacturing and tertiary sectors huge losses, further fueling up the unemployment levels. There has been a nationwide complete shut down in the educational institutions. 'online' or 'work from home' became the trending tag that ruled every social media platform. Along with increasing demand for masks and sanitizers, the demand for online meeting platform such as skype, zoom, googlemeet etc., have thus seen a considerable hike.
However, the year 2021 brings in hope for new opportunities in the form of the COVID vaccine. India has confirmed the invention of two vaccines sucessfully namely the Covishield and Covaxin and the government has pledged to bring in and effective distribution by the month of August. On 16th of January, India had successfully conducted the greatest vaccine drive and is on toes to help the neighbouring countries by exporting it at the earliest. As uplifting India's generous nature it also brings in business opportunities and might prove a highlighted note is the income addition of the nation.
Covid19 has changed the world for once and all. It has a deep impact on every sphere of human life. The question still remains in every mind, will the world go back to normal?
As I say this, I would love to introduce you to the new normal. Welcome to 2021 and the world of opportunities.
Adversely affected sectors:-
Aviation and tourism is one sector which has the highest probability of going under without direct government intervention. It is highly possible that people will only travel for emergency purposes. Even after the vaccine is distributed throughout the nation, it gonna take some time for the people to feel secure and steady before they leap into tour at a greater distance.
Shipping and Non-Food Retail will hit a new low due to lack of customers at least for the next 12 months. This is because people have already developed a 'saving mentality' for an assumed unforeseen emergency and the period of lockdown has taught them to sustain comfortablely inside the security of the four walls of their house.
Real Estate businesses will face the challenges of high interest payments and lack of sales due to low purchasing ability. People are not likely to invest the liquid money into real estates at the moment as a result of which the overall business might see tough times convincing and re-directing their flow of loss.
Textile industry will hit a new low due to the hindrance in labour supply, raw material crisis, day to day capital constraints and restricted demand due to limited movement of people. In the past year, due to the restriction on various festival, it's already been a nail upon the coffin for the industry. People hardly brought ¼ of the usual garments having lesser celebration and reasons to move out. There was hardly a new fashion style introduced in the general narkets and the energy to shop was at it's lowest. This has been a huge loss already and the situation is unlikely to improve before the complete distribution of vaccine throughout the country.
At these high times of loss and tension, where people are unable to track the time of their smooth physical movements in the near future, they are not prone to invest their money only for the sake of status and luxury. Hence, due to falling income levels and global recession the automobile sector will face a high level of challenge in the domestic as well as international market.
Growing Sectors:-
As the pandemic has set an alert tone at an alarming rate throughout the world, every country have become aware of their lagging health facilities and understood the importance of investment in the medical sector of the nation. It's highly important to keep a check and develop the medical department and stay alert for such pandemic emergencies. Hence, the Pharmaceutical Industry will grow in the near future with a possibility to become the most profitable sector in the domestic market.
Chemical industry will rise in the next couple of years with the rise in need of disinfectants and sanitizers. Since the growth of the pharmacies and the chemical industries are directly associated, the Vocal for Local campaign will act as a fueling agent in the process. According to the research studies, it's seen that India is the supplier of 22% world's generic medicines but around 77% of the raw are imported from China. Therefore, it's a high time to understand and develop our own chemical industries and preprare to produce completely Indigenous medicines in order to support the campaign as well as our nation.
The digital industry will grow in the near future with ed-tech companies and online education system taking a massive leap in every household. Even the IT companies have switched to the "Work From Home" which is likely to be the future-possibility of the working class. According to the data gathered and surfed informations , it's seen that companies are being benifitted by this 'new normal'. The office maintenance costs and other costs are being saved and the employees tend to work more and extra while at home. Hence, chances are there that the future might work and expand this idea and re-introduce a fixed category of people who would be able to contribute to the profit of the companies from their respective houses.
Although it was the local markets and mandis that stood by us during the tough times of need, the online markets would still gain popularity because of their door-to-door service and time saving facilities with abundant variety of stocks. Hence, the online retail and groceries will see a massive jump with the pandemic seeing a steep rise in many countries.
As a result of all the above mentioned points the FMCG will rise sharply in the next couple of years.
Escape Route:-
Giving more importance to immunity thus by creating herd immunity in the process.
Vaccination which will open the doors of the pharma industry to achieve the unachievable. Numbers will see a sharp rise in the near future. It will soon be the backbone of the domestic market.
Physical distancing.
Proper hygiene.
Last but not the least, the importance of using and promoting the local market.
Positive Outlook
The growing pharma industry.
The growing sense of social distancing.
Usage of protective measures and different chemicals to stop the spread.
The growing use of local products and services.
The increased value of local mandis and farmers.
Street vendors becoming potential market leaders.
The rise in customer satisfaction after using procuring raw materials and local products and services.
The rise in government intervention.
Increase in demand of local products and services from foreign economies.
A new potential Supply Chain Management.
The rise in the production of pharmaceutical accessories.
The reopening of various sectors which will lead to the overall development of the economy.
The growing sense of deduction of fireign goods.
The urge to create and involve in new start-up business and introduce innovative ideas.
The awareness, interest and curiosity of youth to investigate and research more than ever and be 'vocal', forming their own and individual opinions on everything that comes their way.
The rise in bilateral ties.
The growing pace of unification of the nation through mediums of internet and due to a common problem (COVID-19) for a year. This has increased the sympathetic and understanding side of every citizen and people are energetic to come together and forward to deliver the nation from such distress at the soonest.
The increased reputation in the world market.
The development of vaccine has gained export demands for India in several nations creating a scope for better business in-flows.
Technology is the new oil of the economy.
Increase in the volume of data and information.
Steep rise in research and development.
Last but not the least, the Infrastructure Industry. population of 130 crores which is dynamic and relentless like never before.
Area of Improvement
Pharma industry which is growing in leaps and bounds.
Promotion of rural markets.
Digitalisation.
Promotion of marketing strategies.
Promotion of agricultural industry in foreign markets.
Organic farming.
Promotion of local vendors and markets.
Khadi industry.
Handloom and Cottage Industry.
Chemical Industry.
Automobile industry.
Retail Industry and non food retail.
Railways and transport.
Implementation
Government intervention.
Proper executive check on policy implementations.
Core committees for innovation and skills.
Committees for market regulators.
Committees at rural and urban levels.
New policies.
Protection of local vendors.
Promotion and Marketing of local markets.
Incubation cells.
Promotion of start up culture at a rapid pace.
Joining hands with business tycoons.
Focusing on being more self dependent.
Increasing the export orientated production.
Increase agricultural budget.
Encouragement of building innovative technologies.
Spreading educational awareness in order to decreased the import demands and gain support of the citizens.
Increase budget for MSME’s.
Centralised wage payment of contractual labours.
Conclusion
Some think that the entire pitching of ‘Vocal for local’ is steeping backwards and cutting out the chances of globalisation. In the last couple of decades, India has made its presence felt like never before in many different markets. The new process will help in the increase of different Indian brands. It will lead to the rise in new ideas and innovative thinking. The entire concept of discarding the foreign products and services is false while the process focuses completely on promoting the local market, brands and services to different sections of the crowd. The pandemic has helped local business units to come forward and join the hand of fellow local brands. The disruption in the demand and supply has put forward the difficulties and roadblocks of the business ecosystem. The idea of focusing on local market players has led to the rise in entrepreneurs and brands which are essential for the Indian market to rise like never before.
It's important to understand the significance of being "VOCAL", for. eg., the recent changes in the field of WhatsApp has been a hot-topic of conversation among the youth. The privacy policies have been altered. As the app has circulated it's new policies that it would have an acess to some of the user's questionable details such as contacts, IMEI number, transaction tracks etc. WhatsApp has suggested to uninstall the application if an user doesn't agree with it's policies. However, it had provided time for the implication of the new terms from 8th February onwards but due the rising voice of the people flooding over internet, and people considering the switch to other alternatives such as 'Signal' and 'Telegram' has made the company take into consideration it's decision and extend it's implication date till the month of May; a small but quite effective response from such a big company as Facebook. This proves the importance of invoicing our demands no matter how small, we mustn't think twice before contributing towards supportng the development schemes of our nation. At the same time it's extremely sad to witness our own sticker-chat messaging platform "Hike" to see a drop out from the industry due to lack of demand and proper attention as confirm by it's founder and CEO Kavin Bharti Mittal. Despite being loaded with every attraction and security the app failed to keep up with the company's expectations and died. Mittal recently posted that "the network effects of the International apps are too strong for India to have its own messenger." Amidst the fluctuating demands of whatsapp and other apps as a helpless citizen I can only wish for such beautiful potent Indian apps to exist and make itself visible and demanded by atleast it's own countrymen. However, for such wishes to come true, India is yet to gain a harder momentum in appriciating it's products and services and choose a promotive nature to uplift it's fellow mates.
Hence, Being vocal for local is a must from a personal as well as on a national level. It will help in enhancing the skill level of local market players and innovators. To conclude, India will see the new dawn of technology and skill by promoting the concept of ‘Vocal for Local’. India will become a self-sufficient and dynamic nation like never before in the near future. My grandchildren will see a new India and it will perhaps be a dream come true moment for all of us. A thank you? No, we need a versatile India!
