In the post-COVID world, let’s look to build fairer market places where local businesses thrive

Local business shops

India, like the rest of the countries of the world, is fighting the spectre of COVID-19. An immediate fallout of the pandemic has been the unprecedented loss of lives despite the tenacious efforts by the governments. To add to the misery, the global economy is now in shambles, affecting all kinds of businesses and development. More than 100 countries have closed borders, global supply chains are disrupted, while people have lost jobs and their means of livelihood.

COVID-19 has severely impacted the tourism industry in India. Flights, trains, and public transport have ceased operations, while hotels and resorts have shut down to enforce social distancing. More than 1 million jobs have been lost in India’s tourism sector, while thousands of tour operation firms have gone out of business. Add to it, there is no consensus on when lockdown norms will be relaxed enough for the industry to revive and consolidate lost ground. The pandemic has most affected the small-time operators who do not possess the bandwidth to survive the unprecedented loss of revenue, resulting in loan repayment issues, inability to maintain manpower, and bear overhead costs of minimal operations in this period.

Question that remains is how India will revive the economy and generate jobs. We must look to the lessons learnt during this period of suffering and uncertainty. For the longest time, the E-commerce giants had spelt disaster for the local economy and the grassroots businesses. Technological advantage, promotional sales, and a global marketplace sounded the death knell for the local businesses. Jobs were lost, disrupting economies in a big way. When governments worldwide banned or limited giant e-commerce firms to supplying essential items during the pandemic, it was our good old local grocery shops, bookstalls, fruit stalls, and street vegetable vendors who stepped in. The pandemic has brought resurgence and recognition for these local businesses as lifesavers.

In the tourism industry too, the same scenario has prevailed. In the pre-COVID era, stiff competition from Online Travel Agencies (OTA) led to the diminishment of small, local businesses. Millions of brick-and-mortar travel agents and tour operators disappeared when E-commerce firms like Expedia, Booking.com, besides national and regional E-commerce firms, started their operations. Most of the E-commerce firms started as flight booking engines, and later expanded to hotel booking and holiday package bookings—in short, consolidators of all travel-related services. Unable to withstand the decapitating competition made possible through generous venture capital funding, where killing competition takes precedence over profit-making, the only alternative for small businesses was to shut shop.

At this juncture, it is imperative to realise the decades-old relevance of the local travel agent in India. Much before predatory online businesses, the common man was dependent on the local businesses to supply documents necessary for travel—tickets, hotel bookings, passports, and visas. Generations of Indians travelled to find jobs, within the country and abroad. And their only option to make their dreams come true, was the good old local travel agent. The growth of India is connected to people and businesses like these. The onset of giant online enterprises has meant the abrupt end of such neighbourhood occupations, with millions losing their livelihood in the process.

In a post COVID-19 scenario, it is crucial to recognise the role of the local businesses to build the national economy. Steps must be taken to create a fairer marketplace, where the big and small establishments can exist on equal terms and do business. If needed, a ban on such monopolistic E-ventures and enterprises should be explored. An unprecedented leeway for the E-commerce giants only means a catastrophe for the baseline businesses, and initiative must be undertaken to avert unhealthy competition and destructive monopoly. Only then, the local economy can survive and flourish, generating more jobs and opportunities.