We should be out of the woods by festive season: Ashish Bhasin
Bhasin, CEO APAC and Chairman India, dentsu international, talks about recovery, restructuring and, of course, resilience in the pandemic
In today's edition of 'The Resilience Story', e4m editor Naziya Alvi Rahman speaks to Ashish Bhasin, CEO APAC and Chairman India, dentsu international, as he tells us why he's upbeat about the festive season, why agencies should introspect and why India is poised for a solid ten years ahead.
The second wave was very deadly in a lot of ways. How much did it impact business and overall sentiment in India?
There is no doubt that the pandemic has impacted not just us, but everybody, quite significantly. As I look at it from the Indian point of view, I think we were, in general, as a country relatively unprepared or underprepared for the second wave, which impacted everyone in a big way.
Thankfully, now things seem to be a little better while we are still, probably not out of the woods completely. But at that time, it was almost a matter of survival. Today, of course, we're in a lot better position.
As far as business is concerned, actually, I would say the wave a little less impactful though we had feared the worst. One reason is that IPL was on till about the third week of April.
One by one, markets were going into lockdown. Some dealerships were closed, but they were not as severe as it was in the first week, which was a longer lockdown.
Now, the opening up has started and gradually things will get better. I don't necessarily believe that there will be a switch with a V-shaped recovery and everything will be fine. But I think, the direction is right and things are improving. Every week, every month, hopefully, will be better than the previous.
So far, the news on monsoons is good. If we have a good monsoon and if we don't have a third wave or a fourth wave and if vaccination goes well, then by the time we get to the festive season, we should be out of the woods and things should be back to normal.
Was the impact similar in the APAC region?
As far as the rest of the region is concerned, different countries are in different stages. Some like China went in first and got out after that, and didn't get impacted by the second wave. Taiwan is a great example. For almost one year, it was hardly impacted. There were people working from the office most of the time and there were no lockdowns. They didn't really even have the first wave let alone the second wave. But of late, even Taiwan has started getting impacted. Vietnam is another such market.
But by and large, the economy is less impacted because of vaccines and people have learned to cope better. Some like Australia, the number of cases are pretty low, but often Melbourne keeps going into lockdown.
We've got to learn to live under a yo-yo-like situation until vaccination comes to a certain level.
2020 was clearly a difficult year for most of the agencies. Most of your financial figures were in the negative followed by an announcement of an organisational restructuring. There were talks of consolidations. What changes happened in India?
2020 was not a great year for anyone, including us. However, we underwent a transformation program that did involve restructuring and ended up having almost 160 brands globally. Now, that's not a sustainable scenario. In that sense, there weren’t opportunities to drive efficiencies. Ultimately, the client wants you to address all their marketing communication service’s needs, in the most efficient and fastest way possible.
And if we can give that all in under one umbrella, which dentsu does, that's the best position to be in. In that case, you don't need 160 brands; you need some. That’s how we decided there will only be six global and some local brands.
It's important that agencies also look inwards and transform themselves so that you're future-ready.
In India, we are in the process of consolidation and restructuring. We now have three service lines: creative, media and the CXM so that we have possible variables to combine the researchers and the resources to avoid duplication, where you need to be able to give a more holistic solution to the client.
That's the new way of work which Global has adopted and it's progressing well in India as well.
There was also an announcement on cost-saving that the group is aiming to achieve globally. Did this also include reducing headcounts?
I think it's given in that report that is announced. I don't know what the number is globally. Like you rightly said. there was a restructuring program, but it also was a transformation program. There may have been areas with extra staffers, but there were others, particularly in the transformation areas, where you needed to hire a lot more people.
We are coming out of the transformation program much stronger. The best part is that after a long time, we are now showing growth.
You cannot predict what's going to happen later because of the COVID circumstances. So far, things are looking better and growth is back, which I think is a good sign for the industry and for Dentsu as well.
The pandemic, which is a once in 100-year kind of a scenario, dropped down the overall revenues in almost all markets.
Obviously, the cost base has to be adjusted to the new, top revenue level. But you're never going to be able to grow back by cutting the cost, you have to get your costs in line with the new revenue.
My focus is on what services we can provide to a client. We are leaders in digital, CXM and tech -- what every client needs. We can also offer those services to them and that's where growth comes in.
Which of the markets in the APAC region have been most resilient? And if you have to measure India on that resilience scale, where do we stand and which market can we take inspiration from?
In terms of resilience, I would say markets like Taiwan and Vietnam were relatively least impacted by COVID. Even Singapore to an extent.
They managed the COVID situation, the number of cases and the amount of disruption better than most other markets did. But as I said, some of them are now getting the first wave.
In terms of the market that was hit the most and the earliest was China. We have large offices in Wuhan, Shanghai, Beijing, etc.
Even before the Chinese New Year last year around February, things were coming to a grinding halt and the number of cases was increasing. They were hit before the rest of the world and India even realised the scale and enormity of it.
They also bounced back much earlier than others. And I think that's a good example.
If you look at the GDP of China, for the first three or four months of this calendar year, it's actually grown by mid-teens, I think 17- 18%. The growth has already started coming. That's what India as a country should also aim for.
There is no doubt that our economy got hit last year. But as things improve with vaccinations, our focus now has to on how the economy can quickly bounce back.
The process will be gradual, and around the festive, you will see it coming, especially from our industry perspective.
This feeling of despair has taken a toll on consumer sentiment. Do you think this will also impact the festive season in the long run, or by then, will people have overcome it?
I hope it doesn't impact the sentiment for a few reasons. Indians are a very resilient nation. We can absorb a lot, and then get on with it. We have a large young population, which is moving very fast. Our economy, even in the case of the most negative projections, it’s still showing a high single (some double) digit growth, at least.
Most of the estimates are coming off the economy between 8 to 12% or so. I'm very optimistic about India for the medium term or long term.
There are 1.3- 1.4 billion of us and we have a huge market within ourselves with huge cost advantages. We have an amazing talent pool. With the world is turned on its head, our biggest asset is our manpower, which gives us a domestic market to capture.
Look at the number of IT-related start-ups that are relatively new. We have the brainpower and the management capability. There are 60 large global companies worth over a billion dollars, which are run by Indians globally. W also have a natural advantage in some industries like IT and even advertising.
We're relatively a younger population so I see no reason why in the medium term, or in the long run, our growth will not be good.
However, as a nation, we can also shoot ourselves in the foot. So unless we have something unpredictable like political or communal upheavals at this point in time, I'm quite optimistic that in the next 10 years, India will do very well.
There are many indicators like rising electricity consumption. When you study the macroeconomy, you can see that we are poised for a good 10 years ahead.
A lot of pitches were postponed in 2020 because of uncertainty. Many brands did not want to go for a new agency, or they weren't sure if this is the right time to call the pitch. If this won't happen globally, how do you add new businesses?
If I look at the Asia Pacific at the moment, I think this is the busiest pitch season I've ever seen in the last maybe 10 years. In 2020, in the middle of a pandemic, pitching was still happening, but obviously, it was subdued.
However, If you look at it now in the last three or four months, some of the largest global FMCG and software companies are under some of the biggest pitches.
If you total it up, we'll run into billions of dollars. Every agency group will. And I'm not only talking about media, but I'm also talking about creative. There's a pitch-palooza, which is on. It's good news for the industry.
In every adversity lies an opportunity. So what are the opportunities for advertisers in media in this post-pandemic world?
The biggest opportunity is that we lived through the worst. Therefore there's always some amount of fat and wastage in any system that builds up over a period of time.
Take for example travel. All of us were travelling 15-20 days a month. We thought that there was no other way of working other than getting onto a flight to go for a two-hour meeting, spending a night in a hotel and then coming back the next day. I had never worked from home before this.
But 80%- 90% of the work can happen pretty efficiently on video calls and other means of communication. Business travel may be necessary to some and not to others.
Another example is office spaces. Most companies, at least the larger ones, will give flexibility for quite some time to come to their staff. It can't switch over to people coming back to the office nine-to-six at 100% capacity.
There is a huge amount of efficiencies that have come into the system, and that money that you have saved can be put into transformational areas like ecommerce.
Digital is the reason, particularly in India, where we were relatively less impacted and done quite in. All this while we were saying digital is where you got to be; digital is where you got to be ahead. So some of that money that you were spending on airfare or hotels or whatever can now be put into hiring better talent and digital transformation.
After this pandemic, geography is history. It doesn't matter whether you're sitting in Muzaffarnagar or Mumbai or Melbourne, if there is good talent which is available, you should now be able to attract them from anywhere.
Because, if you're going to be working virtually or will have the option of working flexibly, then your location doesn't matter. The quality of talent going out from the industry is better than the quality of talent coming in.
One of the biggest challenges and opportunities therefore for us is to get in great talent and to make sure that the talent we have is properly looked after, retained, incentivized and is bright enough.
This flexible working culture will be a step in that direction.
What were some of the initiatives that Dentsu as a company took for employees or their families who are suffering from COVID?
Specifically for India in this pandemic, we, a global company, ran a voluntary donation campaign through an NGO in Britain. Back then, oxygen was the biggest problem. The company and its employees donated a lot of money to help not only their colleagues but also India as a whole. I think Anand’s team did really well.
Insurance covers were increased to make sure that it covers a few years of salary, helping the person or the family who is hit.
We tied up with several hotel chains that have corporate deals since people didn't have a place to quarantine. Not everyone is staying in large rooms where you have a separate bathroom.
'Indeed’, which is our CSR division, works with government authorities in Haryana, Maharashtra, etcetera. We had a doctor on call and wellness programs. It's a continuing effort on that.
To me, the most heartening thing was that everybody was as helpless as anyone else. They took it upon themselves: “mere team ke iss bande ke mother ko yeh medicine chahiye.” We immediately put up a team everywhere. The news is read in the network and everybody's running here and there to try to arrange that because it was a survival issue.
In that stage, nobody's bothering about who's paying or where the money is coming from. And I think that spirit to me was like a silver lining in an otherwise very dark cloud.
I was particularly touched by the world doing this for India and for Indian individuals doing it for their colleagues and their colleagues’ relatives and so on. That makes me so proud of India as my country and of Dentsu as my company and all the people in it.
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