Startups Take Digital Leap To Convey COVID-19 Relief
In India, the virus has already had a devastating impact, where 2020 GDP growth estimates indicate a contraction of 9.6 per cent
As the COVID-19 vaccine cavalry readies itself for deployment, Delhi-based healthtech entrepreneur Prashant Tandon is preparing for battle. Fighting the pandemic, he believes, depends on the organization, coordination, and delivery of an arsenal of health-related services and products. Getting the logistics right is critical not only to public health, he shared—its a chance to prove that partnerships across industries, the private sector, and government produce results for everyone.
“Responding to COVID-19 in a country of over 1.3 billion people is forcing 1mg to rethink its core strategies—because this is a significant and important global disruption, not a one-time spike,” shared Tandon, founder, and chief executive officer, 1mg.
When the virus first reached India and the government imposed a strict lockdown, Tandon’s digital health platform 1mg, went into what he calls ‘mission mode’. Delivery drivers and front-line workers brought medicines to customers’ doors and collected samples for a range of lab tests. As the pandemic progressed, the company claims to have also boosted telemedicine offerings to patients, collaborated with government regulatory agencies to clarify guidelines for e-pharmacies, and actively pursued partners in geographical areas where third-party logistics companies are not operational. It is now setting up a nationwide cold-chain infrastructure for COVID-19 vaccines.
“Right now, there’s almost no traceability. Things like soap and matchboxes have bar codes, but not medicines. When it comes to something as important as vaccines, we need an entirely traceable supply chain so we can be confident and comfortable,” he further shared on Twitter.
As with 1mg, other startups in the region are remaking themselves to respond to diverse COVID-19-related logistics needs.
In India and throughout South Asia, “This is the time for logistics companies to reconsider the old ways of doing business to remain relevant. Some drivers of change, such as the digitalization of logistical operations, will be permanent,” explained Venkatachalam Anbumozhi, senior economist, Economic Research Institute for ASEAN and East Asia (ERIA).
“It is important to pay attention to the prospects presented by such shifts. If the pandemic was an instructive object lesson in supply disruption, it was also an instructive object lesson in resilience. To survive this period and protect ourselves from the next crisis, we’re moving from globalization to regionalization, and there’s now a real opportunity for local logistics networks to compete in local markets,” commented Omera Khan, professor of supply chain management, University of London.
But first, vaccine distribution
IFC’s $4 billion global health platform, supported by the governments of Japan and Norway, will provide financing to close gaps in the supply chain and increase developing countries’ access to the COVID-19 vaccine and other supplies to limit the spread of the pandemic. Financing will also help low-income countries boost their own manufacturing capacity, encouraging investment and job creation.
In South Asia, the virus has already had a devastating impact on the economy, leading to an estimated output contraction of 6.7 per cent in 2020, according to the World Bank’s latest forecast.
The impact has been particularly pronounced in India, where 2020 gross domestic product (GDP) growth estimates indicate a contraction of 9.6 per cent.
While the latest quarterly data points to better than projected 2020 growth performance, it will be still the sharpest contraction on record for the South Asia region. Furthermore, according to the IMF’s latest World Economic Outlook, “renewed waves and new variants of the coronavirus pose significant concerns for the growth outlook.” Rapid vaccine deployment is, therefore, key to resilient economic recovery.
Lowering logistics costs
Pandemic-inspired culture shift in the logistics sector is taking place in India, analysts believe.
“We are seeing increased government engagement with the private sector,” said Arindam Guha, partner, government and public services leader, Deloitte India. “This began with repurposing existing capacity for manufacturing and distributing personal protective equipment (PPE), and it continues because protecting 1.3 billion people is a Herculean task.”
The Indian government’s focus on partnerships that will kickstart the supply chain comes as part of a wider emphasis on logistics among top-level economic reforms. In India, the logistics cost as a percentage of national GDP is 14 per cent, as per a 2020 joint report by Arthur D. Little and the Confederation of Indian Industry.
“That’s a problem because high logistics costs adversely impact an economy’s competitiveness and in turn act as a constraint on economic growth,” stated Priyanka Kishore, head of India and Southeast Asia Economics, Oxford Economics.
Enabling the ecosystem
Government openness to tech-enabled logistics platforms and related new policy measures, such as those proposed by the National Logistics Policy, are important enablers for enhanced logistics in India’s $200 billion logistics market, said a 2019 McKinsey report.
“Post-pandemic, such dialogue between logistics companies and governments, as well as with the banking sector, will be necessary to facilitate capital injections that will stimulate recovery,” shared Anbumozhi, economist, ERIA.
Still, many roadblocks litter the logistics sector’s path forward. Throughout India, fragmentation of the trucking industry is a particularly difficult problem; dated infrastructure and a large informal workforce complicate progress on a national scale. Ninety-nine percent of the market is unorganized, and the lack of coordination causes supply chain disruptions, according to India’s Logistics Skill Council.
Nurturing local job creation
Logistics companies that are responding to COVID-19 with strategies like these help keep workers employed, and some start-ups report hiring a significant number of new delivery partners because of pandemic-related demands.
Shadowfax, for example, has hired 60 percent more delivery partners since India’s COVID-19 lockdown began. It now has 50,000 delivery partners across 500 cities in India.
“Local logistics firms like Shadowfax play a unique role in keeping people employed. Employability in logistics is important to me because I came from a poor town and have seen what happens when there aren’t enough jobs to go around. In logistics, people can make money just by moving items. People can do part-time ‘gig’ work on their own schedule and help their community at the same time,” added Abhishek Bansal, co-founder, Shadowfax.