"India has the potential to become the next manufacturing hub"
Arjun Bajaaj, CEO and founder, Daiwa, on how India can progress as a manufacturing company
What was your strategy throughout this pandemic and what was the biggest challenge while achieving the strategy?
As a manufacturing company, we faced quite major challenges in the initial days of the lockdown. As per the government guidelines, we had to halt the production for almost 2 months. It was soon followed by the migration of our manpower, along with thousands more, back to their hometowns. The logistics and maintenance of machinery also came in as another set of challenge. The cash flow too was drying up fast, as ready material was lying in our warehouses but sales had declined. With the available working capital, we had to pay heavy demurrage charges, apart from pending payments to our vendors and our employees’ salaries.
Having said that, the impact of the pandemic is inevitable, we are trying our best to focus on the current scenario and have been making some key transitions. Adoption of digital technology was the first step to resume our business. Secondly, we have been focused on increasing employee productivity by continuously encouraging them and providing means to hone their skill sets needed for the dynamic market. Through our “My Daiwa App”, we have tried to simplify the process of solving our Clients queries and be more approachable. This process of resolution helped us determine the pace and depth required for our business continuity. Our go to market strategy has been adapting to and meeting the current needs of the customers. The last and most important strategy that we followed was preparing and ramping - preparing the team to keep going irrespective of the challenges we face, and ramping up the product portfolio to match the supply and demand.
What changes did you see in the consumer behaviour and pattern of buying?
The consumer sentiment and behaviour has seen a drastic change since the beginning of the pandemic. The same has been reflecting in their buying patterns being extremely dynamic yet very conscious at the same time. Although essential items were a priority among the majority of the population, we observed a rise in the sale of recreational appliances and devices as well. The whole world is stuck at home trying to maintain a routine but they also realise the importance of spending quality time with the family members.
And since many years, TV has been that one thing bringing families together. The lockdown hasn’t been any different in that matter; people are interested and want to invest in good quality, smart TVs but at an affordable rate. Daiwa has been providing consumers with the latest technology driven, quality products at prudent prices, which best suit the current needs of the consumers. The sentiments of the people to go “Vocal for Local” has also played an essential role in increasing sales, as people have started to make mindful purchases only from brands that are “Make in India”.
Do you think the tension between India and China will give "Make In India" companies a boost? If yes then have experienced any increase in sales due to this?
The India-China tension has impacted many sectors, both positively and negatively. It has also revived the whole “boycott” foreign products moment, in this case, Chinese products. I believe this situation has definitely given a push to the Make in India initiative and with that a positive boost to home grown companies. We have also been receiving volume of queries about whether the brand is made in India and also if it is has been originated in India.
Daiwa is a brand that truly resonates with the ‘Make in India’ philosophy not only in terms of its performance but also functionalities designed as per the needs of the audience. The dynamics of the market are very uncertain at the moment, but for now we can say that we have seen a spike in our sales. Consumers have shown our brand immense support by engaging on our social media platforms. Make in India initiative has gained more and much needed momentum than before, and has aided many international companies to enter and invest in India, all of which could lead to India becoming a major manufacturing hub.
Do you think India will become the next manufacturing hub?
I do believe that India has the potential to become the next manufacturing hub in the near future. However, it can only be possible with the support of our Government, by modifying and implementing the right policies and acts in accordance with our aim. Government needs to allow foreign companies, who have the technology and resources, to invest in India.
For instance, open cells - have the largest share in terms of cost or value, used in a TV - are not manufactured in India. If that technology is introduced in India, it would only improve the manufacturing infrastructure of the country and shall open gates for exports as it requires major production. And with India being a pool for labour, this again would bring in employment and enhance the skills of manpower. These steps would allow India to truly become Atma Nirbhar Bharat.
In the current situation, manufacturing units required a lot of man power how are you managing with that as many migrant worker have left town?
Yes, lack of manpower is a major issue that we have been facing since the labour has migrated to their hometowns. When there was a relaxation in the lockdown norms and factories could resume in less volume, we did hire new manpower and trained them, but they did not show up after 2/3 days, and it eventually impacted our efficiency of production. During the initial days only 33% of manpower was allowed which again turned out to be a problem. We have learnt a lesson from this and from now we are planning in advance and ensuring the manpower gets proper training and proper facilities. We have also made them understand the importance of the stability of a job and have ensured they would be given job security, which would boost their morale.
How do you think India can/ could beat China when it comes to manufacturing?
The pandemic has halted imports from manufacturing hubs including China and Italy. This gives tremendous thrust to newer opportunities for India to emerge as a manufacturing hub. To aid that, the government should focus on “Make in India” rather than “Assemble in India”, by urging multinational firms to set up their manufacturing facilities in India itself to support the local industry. With that and with advancement in technology, doors shall open up for new businesses and export advantages. India needs to capitalize on this opportunity and gear up its Manufacturing eco-system. Along with this, the manufacturing industry also needs to work upon their revival strategies and address the current concerns like migration of labour to hometown, logistics, maintenance of machines, etc. that have further brought several new challenges to the ecosystem.
Do you think India can completely go Vocal for Local with the current policies?
India has the potential to go Vocal for Local, but it needs the support of the government to accomplish it. India needs to revise its FDI policies and bring in new policies and technologies that could help manufacturers grow. This shall help us become less dependent on other countries for raw materials and other imports. The government also needs to consider the rationale behaviour of consumers while making a purchase which diverts them to products that offer the best value for money. Thus, instead of making an obligation for the masses to go vocal for local, our government needs to undertake reforms that would improve the condition and growth of the domestic industry against its international contenders.
By going Vocal for local, it would help embrace our roots in every way possible and help boost the economy as well.