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COVID-19 and its impact on consumers

Much has been written about COVID-19 – its origin, impact, infections, mortalities, flattening the curve and more that would be tiring to repeat it here. However, there are two aspects of the COVID pandemic that are likely to have lasting impact on Indian consumers.

Firstly, US President Donald Trump last week called for a wider control over social media platform Twitter. By implication, Trump also called for wider control by the US government authorities over all social platforms. Although Facebook has declined to police Trump’s post (unlike Twitter), the company is facing a massive backlash from its own employees. In India, on several occasions, government officials, ministers et al have also called for greater control over SM platforms.

Post COVID, this call is going to become strident and more forceful. Governments the world over acknowledge the enormous power that these platforms possess and are collectively wringing their hands at the inability to rein them in. As a matter of fact, there is a debate, even amongst the public, that social media platforms have huge heft in shaping the thinking of sections of the society. As a friend pointed out: ‘COVID-19 originated in China but was spread by social media’, the platforms led the information deluge on the public. So much so that the government of India had to intervene and come out with its own app to give ‘official’ figures. The fear-mongering and the sheer amount of fake news has angered many a past advocate of these platforms.

However, the bigger question is – even if these platforms cannot/will not regulate themselves due to commercial interests, are the governments even capable of doing so? Will this not convert the very nature of these platforms– from free-to-express destinations, to ones that are policed by governments to serve their interests? What will this do to the commercials around the company– Facebook, WhatsApp, Twitter et al? Will they be able to balance their commercial interests with government oversight? Finally, what happens to the data? Who owns it? If the government, then where and how is this data going to be used?

While we may not have any answers to any of these questions, one thing is clear– the very nature of the platforms and the sheer numbers that populate them will reduce dramatically if there is a hint of government control, and the utility of these platforms will evaporate.

Secondly, the return to nationalism. With the Prime Minister himself calling for ‘self-reliance’ (atma-nirbhar) as the war cry, what is it going to do for the Indian tech consumer? Where are the Indian brands? Last we checked, over 70% of the Indian cellphone handset market was owned by Chinese brands. So, does this give the opportunity to the likes of Samsung and Apple to make aggressive noises and sharply increase their marketing budgets? Or do we see a hybrid model evolving – where the likes of Motorola and Nokia partner with Indian corporates at an equity level to cater to India and India-like markets?

To me that is probably where the opportunity lies for these once-hallowed brands to make a re-entry into India. A Nokia JV, where it holds 51% with 49% being held by an Indian corporate, would have multiple advantages. One, it reopens the Indian market. Two, the Indian corporate gets to participate in the telecom sector growth, which currently is only restricted to the Telecom Service Provider (TSP). Three, Make-In-India, empty rhetoric in the telecom sector so far, gets a real use-case. Fourth, it allows Nokia (and others) to build lower-cost handsets for other global markets such as Africa, where the telecom revolution is booming. Five, it will give the Indian corporate a taste of competing with the Chinese in other overseas markets.

All in all, it is not such a bad deal for both the foreign as well as the Indian brands.

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