Exporters find it tough to find new buyers

Today’s Covid times demand social distancing among individuals and this onerous requirement amidst a slowing global trade has put exporters in a pickle. For a sector that is highly dependent on the participation in various foreign trade shows and expos for a steady business generation, the inability to physically participate in one has led to serious setbacks.The country's exporting fraternity is unanimous in its view that in a post-Covid world, the very idea of trade fairs is up for a radical shift. According to Rakesh Kumar, Director-General, Export Promotion Council for Handicrafts (EPCH), “There is no denying the fact that our trade fair industry, being a face-to-face segment, is among the worst-hit amidst this pandemic. Covid-19 is one of the biggest disasters mankind has ever faced in recent times. With no vaccine or treatment currently in place, social distancing, containment and restrictions are the only way forward until the curve flattens and normalcy prevails,” he says.Undoubtedly, with all major global expos and trade fairs being cancelled, finding buyers has certainly become more difficult for the country’s exporting firms. The world over, going by the data at the 10times, a business events discovery platform, about 58,886 trade expos was slated to be organised this year and in the near future. In the wake of Covid-19, most of them have either been cancelled or postponed indefinitely.According to the EPCH representative, the MSME sector that forms the backbone of the Indian economy has been severely affected. “There has been business loss to the tune of Rs 8,000 to 10,000 crore in the handicrafts sector alone due to cancellation of exhibitions in which member exporters take part,” he reveals.Hit across sectorsRepresentatives from the country’s chemical sector, another high foreign exchange earner for the country, is of the view that cancellation of trade fairs has led to considerable degrowth in the $163 billion worth industry.“New customer and business development activities have been impacted significantly due to cancellation of trade fairs,” says Satish Wagh, Ex-Chairman, Chemexcil, the industry body representing exporters from the chemical and allied industries.“We feel that Covid could have an adverse impact to the tune of 10-15% of revenue. It will take at least 6-9 months to recover from the blow created by the cancellation of trade fairs and events. The crisis can worsen if the pandemic does not come under control by July-end,” Wagh forewarns.Worth noting is the fact that Indian chemical sector, which contributes about 10.5% to India’s foreign trade, is a sector dominated by MSMEs. While for some sectors going online maybe a way out, some sectors find it difficult to conduct business in the virtual world. For example, trading in chemicals has always been an in-person interaction with buyers because of the nature of the commodity. Wagh believes, while everyone these days is getting on the digital bandwagon to reach out to customers, such platforms only partially serve the current needs of the sector.“To some extent, virtual trade fairs are the answer to this crisis, but when it comes to new customer development or new business discussion, we do not think virtual trade fairs are the answer to real trade shows,” he remarks. 76827416Clinging to hopeDespite the far-reaching blow to different sectors, all is still not lost in the eyes of the exporting fraternity. Vinnie Mehta, DG of Automotive Component Manufacturers Association of India (ACMA) believes things aren’t yet that dismal in the Indian auto components sector. “The trade fairs that we participate in have not been cancelled, but have now only been scheduled September onwards. So, in that sense, I think, it may be a little too premature to conclude that it's the end of the idea of trade fairs”, he emphasises.Sharad Kumar Saraf, the President of the exporters body Federation of Indian Export Organisations (FIEO), says while Indian exporters have suffered as a result of the pandemic and it may be difficult to find new clients, "recovery will be fast” because of the existing relationships that exists.Saraf even adds that Indian exporting firms may not be severely impacted since trade shows have now gone online. “Virtual exhibitions are now being held. This will be the new norm, and the original situation will return in due course of time,” he says.So, are Indian players and trade bodies really up for the task of conducting or participating in online expos and do they have sufficient wherewithal for that? “Virtual events are close to reality, except the buyer cannot see or feel the product, but this will not be a great hurdle. Our Export Promotion Councils (EPCs) are quite well prepared for the virtual events, and they are being planned regularly,” Saraf asserts.Reduced, but functioningWhile there is no substitute for a physical forum, one can creatively utilise the virtual platform to create multiple points of engagements with customers, believes the industry.“Through a virtual platform, virtually at little cost, one can create many points of engagement; to show very detailed nuances of your products. So, I think, going forward, we will see a co-existence of the two platforms - a real-world and a virtual one,” maintains Mehta. Referring to the recent CII annual session, which was held digitally this year, Mehta says virtual media, besides being a low cost solution, is practically almost as effective as real-world meetings.Kumar of EPCH, however, flags that in a country like India, if one thinks everything will change suddenly – then that is a “myth”. “Changes are required to sustain the new digital normal or the informative normal.” Noteworthy is that the EPCH organised its first virtual fair on Indian fashion jewellery and accessories, which concluded on the 4th June 2020. The virtual event garnered the presence of 1200 overseas importers from about 81 countries besides 500 buying agents, wholesalers and retailers. Serious business inquiries worth Rs 150 crores were generated, states the EPCH. Buoyed with the responses, the industry body went on to organise virtual shows such as IHGF-Textiles on 15–18 June, and has scheduled the 49th IHGF Delhi Fair - Virtual 2020 to be held between 13–18 July, 2020.“These are temporary phases. Also, we are hopeful of trade fairs re-opening soon. They have to, because they are so vital to kick-start our economy again. Going virtual is only an added measure in these times. No doubt, it will be important in the wake of this pandemic, but eventually, it will take the role of assisting the face-to -face events industry and evolving into a hybrid format,” sums up Kumar.