Focus on consumer advantage during economic slowdown: Vivek Bindra tells entrepreneurs

Amid much noise over the economic slowdown in India, Vivek Bindra, motivational speaker and YouTuber, has a word of advise for entrepreneurs: focus on consumer advantage.

Hinting towards current indications received from the economy, Bindra said that with the advent of technological disruptions in multiple sectors, there has been a shift in the adoption curve, leading to a change in consumer behaviour.

“If we look closely this isn’t a slowdown. Refer to the adoption curve, and we will know that the consumers’ buying behaviour has shifted and hence, it is necessary for entrepreneurs to look at consumer advantage, and not the competitive advantage,” Bindra told BusinessLine in an interview recently.

The adoption curve is a marketing management tool to understand consumer behaviour in different stages — especially after introduction of an innovation or disruption.

Technological disruption in a variety of businesses including financial sector, logistics and transport, e-commerce besides other sectors has created business and employment opportunities that were not thought of a few years ago.

Policy intervension

“Understanding what a consumer needs, and adopting the change, will help businesses move up in the adoption curve. There is a need to understand the signals you get from the consumers. Those who are able to identify it, can enjoy the first mover advantage, and can become top leaders in the respective industry,” Bindra said, adding that in the times like this, when consumers are quickly switching their preferences, advertisement isn’t an effective solution.

He said that the intervention with a lasting solution would include government policies that support small and big businessmen, delivery of quality education and skill education, and creating a sustainable farming community, which doesn't depend on government packages.

“Earlier there used to be wars fought in the battle ground. Today, we have a fight in the market for a bigger share. A country with a sound economy and strong market is mightier than than even those with bigger weapons,” said Bindra.

Three mistakes

He said Indian entrepreneurs are found making three mistakes - one, failing to identify the market needs and sense the level of urgency to make corrective changes; second, shifting focus from the core business amid tempting new options; and third, is expanding business with a low margin, without proper cash-flow and working capital management.

“There could be profit on the books, but the entrepreneur would have a larger amount given on credit to his suppliers. So his cash gets stuck in the market. Then he goes for expensive borrowing, which impacts margins. This restricts him from sourcing new goods, so he can't keep fresh stock. So in order to get fresh stock, he borrows more expensive fund. So ultimately he gets stuck in this vicious circle," Bindra said.

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