COVID-19 outbreak: Challenges and opportunities for Indian startups

The COVID-19 outbreak has brought about unprecedented challenges across sectors. It is no longer about which sectors have suffered, but rather which industry has been hurt to what extent.

COVID-19 outbreak: Challenges and opportunities for Indian startups

Monday July 27, 2020,

6 min Read

business opportunities

The first half of any new financial year is a great time to accelerate growth, but the COVID-19 outbreak changed the scenario this year. The situation is unprecedented for almost every sector of the economy, especially the early-stage ventures.

It is no longer about which sectors have suffered damage, but rather which industry has been hurt to what extent. From that damage assessment perspective, the travel and hospitality sector has suffered extensive losses and it is likely to be the area which will take the longest to re-emerge due to the new normal.

Similarly, other people-intensive sectors, such as manufacturing, logistics, transportation etc., will have to face stiffer challenges.

Then there are emerging sectors exemplified by the hygiene industry, which have gained prominence during the current crisis. In a country like India, hygiene has for long been a topic of hot discussion, but there has been little action.

This is likely to change now with a very real and globally witnessed impact of contamination related risks. Whether it is personal, surface or community hygiene, the playing field has changed already.

For instance, let’s talk about hand sanitisers. Before the pandemic came into picture, there were a handful of brands and the product was at best considered an item of necessity in certain hospital areas. However, today, it is a product that the masses cutting across economic and geographic divisions are aware of.

The consumption has increased several-folds in the last three months itself. Similarly, surface disinfectants, soaps, masks, gloves, sanitiser sprays and other such hygiene products have seen such a rise in demand that there is a demand-supply gap today.

It is this growth potential that has already brought several new brands into the market, and there will be a lot of investment in this arena. It is not only during the COVID-19 pandemic, but also hygiene which will continue to be one of the most rapidly growing industries in the future.

This is a great lesson in understanding one aspect of operations that was previously given little thought by most businesses. Things were being run with focus only on the graphs and marketing. Times have changed now.

Yet, adversity can also be a great opportunity. War not only destroys but also creates opportunities for those who are resilient and keen to rebuild. Today, our war against coronavirus has brought to us similar challenges and opportunities.

The challenges and how to tackle them

Cash flow

We are all witnessing a drop in sales and the degree of impact varies according to the sector a company operates in. However, what is needed at this point is the ability to be adaptive and innovative.

Reassess what you do and what new can be done to make yourself relevant during the current crisis. A lot of ecommerce companies and even conventional shops started selling groceries, fruits or vegetables or providing logistic support to the retailers.

Carmakers are making ventilators and wine makers started producing hand-sanitisers. Such adaptability not only keeps the cash flow going but also helps in scoring valuable marketing points by serving the consumers in their hour of need.

Growth setbacks

Irrespective of your organisation’s size or industry, weathering the storm and not expansion should be the focus areas for now. There might have been plans to launch new products, cover new territories or secure more funding, but, those plans need to be put on hold until the situation improves.

In fact, the apparent growth setbacks could be an opportunity to display your resilience. By continuing to remain upbeat and adapting to the current scenario, a company can prove to be of higher value to potential investors, clients, employees and other stakeholders.


Funding plans are undoubtedly going to be put on hold for the time being. Investors would want to wait and watch and even from the start-up perspective, it is better to bid your time.

As of now, it is a difficult scenario, and investments might come at higher costs, eventually proving to be a fresh challenge. However, by waiting for the situation to improve, a company can give itself time to realign its future plans, targets, financial needs and other such inputs.

Thus, it would not only be on a better footing during the funding rounds, but its operational strategy would be more in sync with growth in the new scenario.


This is one key area of concern, especially to labour intensive sectors such as agriculture, manufacturing, and construction etc. There will be depletion of quality resources, and it might lead to aggressive talent poaching.

The work processes and guidelines will also change due to the social distancing norms that will now become mandatory on a long-term basis. Hence, there is a need to conduct a detailed review of the company’s human resources requirements, expenditure and future strategies.

The focus should be on talent retention because when the markets open, there will be demand and companies that can cater to that demand will make it big.

Having looked into the challenges, we must also consider the opportunities that the current scenario presents.

Higher Sales

The lockdown has stopped business operations and retail sales, but not diminished the demand. Startups that successfully see through this period will have plenty of sales opportunities.

If a brand can cultivate the image of being capable of meeting the public requirements through the right products, it will earn revenues.

Product Innovation

In the revised scenario of the future, the customer demands will also change. Hence, startups that can dynamically innovate their existing products or launch new products and services will be in an advantageous position.

For instance, most services will go digital and demand for doorstep deliveries of products and services will increase tremendously. Startups that focus on fulfiling the demand changes will gain to benefit the most.

Global opportunity

It is not only the Indian economy but those all over the world that have been hit hard by the pandemic. Hence, the resumption of normalcy will witness demand for quality, innovative and affordable products from all over the world.

Indian startups that can create products to address the global needs will see a growth acceleration that will surpass even the pre-COVID-19 times.

Overall, the situation poses some serious transitional challenges at present. There is a need for support from the government, investors and organisational leadership to get through this situation.

Contingency planning and revamping of workforces to efficiently handle the post-COVID-19 demand is the need of the hour. The companies that continue to operate in the new normal or are founded after the lockdown is over, will stand to gain from the situation.

Edited by Saheli Sen Gupta

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)