There’s no denying the fact that the Coronavirus outbreak is the worst crisis for the Indian startup ecosystem and economy worldwide since the 2008 recession. From sales to productivity and from suppliers to fundraising, it has impacted almost every aspect of startups in India.
Most of the businesses are struggling to survive. Many have admitted that they have never experienced anything like this. The virus had unleashed a never heard before chaos in the market and impacted almost every business worldwide.
The Coronavirus has even managed to change the buying patterns of consumers. The sales of luxury goods, clothing, and electronics are going down while sales of essential food items are an all-time high.
Let’s take a look at how the Coronavirus outbreak in India is affecting startups in India and what’s the future holds for the Indian startup ecosystem.
How Could Coronavirus Impact Indian Startup Ecosystem?
1. Coronavirus and Fundraising
In the wake of the Coronavirus outbreak, people are advised to stay at home, and most of the stores have already shut down till further notice. The virus has brought the economy to a grinding halt, severely affecting business, leisure, and travel worldwide. Business travel has almost stopped, adversely affecting fundraising activity.
China and Singapore are the favorite funding destinations for Indian companies. Since the outbreak in China, most of the travel plans have been canceled, which has put a brake on funding related activities as well. Experts are of the view that the virus may change the Indian startup ecosystem forever if it can’t be contained within a month.
2.Change in Consumer Behavior
Since the outbreak, consumer behavior patterns have seen a dramatic change. Due to the epidemic, the economy has suffered a crippling blow. It holds especially true for the retail and service sector. It has, in turn, negatively impacted the production as well.
Through food and grocery, businesses are not that much impacted, logistics and other industries are taking most of the brunt. Experts believe that Indian e-commerce sales may experience a further drop in the coming weeks, even if the outbreak subsides.
3. Flight and Hotel Booking Platforms
In the times of Coronavirus, these are the worst-hit sectors. Other related startups like Airbnb, Ola, and Uber have suspended operations nationwide until further notice. Besides, co-working startups in Gurugram and Bengaluru have also seen a drop in demand for the last few months. These sectors are expected to see a further downfall in the coming times and may not be able to recover anytime soon.
The virus outbreak has severely affected almost every sector in India, including pharma, consumer durables, toys, and electronics. China manufactures over 90% of the world’s electronics, including computers, air conditioners, and smartphones. Now, most Indian electronics manufacturing companies heavily rely on China. These companies assemble the products here, but the components are imported from China. So, the consequences of the outbreak can be very severe.
See Also: 5 Most Recent Startup Failures in India
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