Last week, CCD & Wow Momo announced a partnership whereby CCD would be selling different varieties of momos at their various outlets piloting in Bengaluru. At a time when firms are facing the dual stresses of high fixed costs and a lack of customers walking through the door, this could be a mutually beneficial arrangement for both parties.
In today's post, we look at the other partnerships that have been struck in this trying time and look at the themes that emerge.
India x Partnerships
When the lockdown was initially announced, ITC Ltd had partnered with Domino’s Pizza to sell staples and spices as ‘essentials’ by using the latter’s nationwide network of outlets and delivery fleet.
In the world of finance, IDFC First bank partnered with CRED, a credit card payment app, to offer collateral-free personal loans to users with a high credit score.
Curefit, a holistic end to end preventive healthcare solution was selling their own brands through their app. They began selling staples and FMCG products of other brands.
In a highly competitive market like India, these partnerships, struck in a rather short period of time, and between players who would traditionally not be too willing to collaborate is an interesting development!
United by a crisis?
The COVID crisis has taken the usually hyper-competitive Indian market and presented avenues of collaboration. These friendships may be fair weather ones, helping the firms navigate the "unprecedented" crisis they face, but the trend is still reassuring.
In the medium term, we can expect similar partnerships across different industries. We could see hotels partnering up with hospitals or Zomato, and Swiggy extending their reach beyond groceries to delivery of medicines and other essentials.
These partnerships will help bring in new streams of revenue and keep the businesses afloat, while also allowing firms with a fixed cost load to share part of the burden, creating a unique middle ground for firms to survive, and then thrive. More interestingly, it will open up channels to reach the customer that were previously unavailable, which, if found cost-effective could mark a more permanent change in the way business is done.
A question of survival
It is increasingly becoming clear that the survival of many organizations will come under threat due to the COVID pandemic, with both the government and the central bank running at the fag end of their ropes. In such a world, collaboration and co-existence might just be what is needed to help the firms weather the storm of their lifetimes.
What would be interesting to see however is if these friendships forged in the middle of a crisis, still stand strong when things go back to normal.
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About the Author: The post is written by our EZPP Partner Saket Mehrotra with relevant edits from our editorial team. Saket is a Chartered Accountant working with ITC Limited.