Assignment -02

Digital Marketing

Impact on Electrical &

Electronics Business – Covid-19

Submitted By:
Kreepa Shankar Chowrasia (A-36)
MBA – (General), Section - A
Submitted To:
Dr. Shiv Shankar Yadav
AMITY BUSINESS SCHOOL Kreepa Shankar Chowrasia (A-36)

IMPACT ON CORE BUSINESS / SITUATION

There have been a multitude of headlines and questions that have resulted in the past few weeks. The

recent epidemic of a coronavirus, called COVID-19, has left many of us worried and paranoid about

our own health - fearing to catch the virus by interacting with other people and performing daily tasks

such as public transport.

While coronavirus in China shows no signs of slowing down and parts of the country are quarantined,

Indian electronics industry fears supply disruptions, reduced production, and negative impact on

prices, revenues, product launches and local manufacturing. Experts said, if this situation continues,

sector expected to suffer by March. The sector which is under strong tension is the electronics

industry. A large part of the inputs required to manufacture electronic components traditionally come

from China. As new cases of coronavirus (COVID-19) raise fears of a global pandemic, the impact of

the closure across China has started to strike Indian companies, some very seriously. India's

electronics industry, which relies heavily on China - the world's second largest economy - for

components, sub-assemblies and even complete products, is seized with a sense of apprehension

about the impact of the new coronavirus. The companies and industry organizations with which

Business Line spoke said that other countries for these supplies or any other solution appear unlikely

to occur. They said that they were assessing the situation and thinking about what could be done.

While the province of Hubei and the eastern regions of China are hard hit, the main Indian industries

that depend on imports are stopping. It's not a bad story for India's exports to China, but imports to

several industries are feeling the pressure. According to Crisil, around 18% of India's total

merchandise imports come from China. India had a trade deficit of $ 159 billion in the 2019 calendar

and it remains a net importer from China (including Hong Kong) of $ 56 billion.
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IMPACT ON ELECTRICAL & ELECTRONICS
AMITY BUSINESS SCHOOL Kreepa Shankar Chowrasia (A-36)

In

this context, the sectors most affected are electronics, durable consumer goods, automotive

components and pharmaceuticals. Factories in China are the center of the electronics industry's supply

chain, and manufacturers are increasingly concerned that disruptions from the COVID-19 coronavirus

will delay production by several weeks.

The impact is going to be greater than what people realize or talk about, said Anuj Poddar, executive

director of Bajaj Electricals. “Even Indian manufacturers will be affected because many of the

components of what we manufacture in India come from China. The factory will be in India, but the

raw materials will come from China, and even if an item is not available, it has an impact (on local

manufacturing too), "he said.

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IMPACT ON ELECTRICAL & ELECTRONICS
AMITY BUSINESS SCHOOL Kreepa Shankar Chowrasia (A-36)

Following the coronavirus epidemic, the sector is in an extreme strait, as the entire supply chain is

now severely affected. Even supplies that have already arrived in India require an advanced level of

disinfection before they can be shipped to various markets. The tragedy is that no worker is ready to

touch a device from China yet, "said Rajoo Goel, secretary general of the Electronic Industries

Association of India.

The crisis now crosses the entire value chain. There are thousands of manufacturers of electronic

manufacturing services (EMS) purchased in India, and now their supply chain is, in turn, affected.

"From the manufacture of mobile phones to printers, including PCs, installation boxes and inverters

are affected because the PCBs come from China. They have just been assembled in India. Likewise,

aluminum, copper and chemicals in electronics manufacturing come from China.

Bajaj Electricals official said that although the company is starting to look to local suppliers or local

manufacturing, it cannot materialize in just one month. It is also a question of whether the products

concerned can be replaced by other similar products. The company is also not looking for any other

country for supply, as Poddar said that the scale, products and variety offered by China cannot be

easily replicated by other markets. Finding other suitable countries should also take as long as it takes

China to resume supplies, he added. Building partnerships with component suppliers involves time

with design changes - sometimes multiple iterations, to ensure that we erase the strict quality

standards that the brand has put in place to meet performance standards.

The problems in the sector are compounded because the other countries in the region do not want to

fill the void. It will be a major blocking because if, instead of China, a player thinks of importing

from Japan or Taiwan, say, suppliers do not want to entertain Indian importers because they know the

new demand generated by the Coronavirus is temporary.

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IMPACT ON ELECTRICAL & ELECTRONICS
AMITY BUSINESS SCHOOL Kreepa Shankar Chowrasia (A-36)
PROBLEM SOLUTION
The lesson from the coronavirus epidemic is that in the long term, Indian importers must abandon

their long-standing practice of "putting all the eggs in one basket". They must diversify their risks and

cannot depend on a single market to meet 70 to 80% of their supply requests. They also need to

explore other markets, even if they are currently a few percentage points more expensive. This will

help them to better deal with such future irregularity in their supply chains.

Summary:

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IMPACT ON ELECTRICAL & ELECTRONICS