The conventional 3R model—reduce, reuse, recycle—has been the cornerstone of sustainability efforts for decades. While undeniably valuable, its limitations are increasingly apparent in the face of escalating environmental concerns. To truly make a substantial impact, businesses must move beyond this paradigm and adopt a holistic strategy that encompasses every facet of their operations.

Circular Economy Principles: A Paradigm Shift

At the forefront of this evolution is the adoption of circular economy principles. In 2024, companies are recognizing the imperative to redesign their production processes, to minimize waste and facilitate material recycling. The circular economy model promotes a closed-loop system, where products are designed with the end in mind, ensuring they can be easily repaired, refurbished, or recycled.

A Swedish furniture giant is a prime example of how circular economy principles can be translated into tangible action. The firm is investing in sustainable materials, designing products for recyclability, and encouraging customers to recycle old furniture through its buy-back programs. Since its launch in 2005, it has diverted over 60,000 tons of furniture from landfills.

Designing for Longevity and End-of-Life Repurposing

Central to this holistic approach is a shift in product design philosophy. Businesses are now focusing on creating products with longevity, thereby reducing the frequency of replacements and minimizing the overall environmental impact. By prioritizing durability and reparability, companies across industries are contributing to the extension of product lifecycles, curbing the incessant cycle of production and disposal. An American outdoor recreation clothing company offers a lifetime warranty on its products and encourages its customers to repair or return worn-out items through its Worn Wear program.

Furthermore, end-of-life repurposing becomes a pivotal aspect of this approach. Products are designed with disassembly in mind, making it easier to extract and repurpose materials once the product reaches the end of its usable life. This shift not only reduces the burden on landfills but also contributes to the establishment of a more sustainable, closed-loop system.

Optimizing Resource Use: Prioritizing Renewable Energy and Responsible Sourcing

A holistic sustainability approach necessitates a thorough examination of the entire production cycle. Companies are increasingly prioritizing renewable energy sources to power their operations, thereby reducing their carbon footprint. A leading British multinational FMCG has committed to making all its packaging reusable, recyclable, or compostable by 2025. This extends beyond the manufacturing floor to encompass the entire supply chain, reinforcing the commitment to environmentally friendly practices.

Additionally, responsible sourcing of materials becomes a crucial component of this strategy. A German automotive OEM is scrutinizing its supply chains and implementing environmental and social standards throughout its supply chain. They use recycled materials and partner with suppliers who share their sustainability goals. By minimizing resource extraction and fostering responsible sourcing practices, businesses contribute to the conservation of ecosystems and biodiversity.

Supplier engagement becomes instrumental as the journey towards sustainability is not solitary. it requires collaboration across the entire value chain. Businesses are forging partnerships with suppliers as well as consumers to establish a closed-loop system for materials. This collaborative approach ensures that the entire value chain is aligned with the overarching goal of environmental conservation and resource efficiency and that stakeholders work beyond the linear ‘take-make-dispose’ model.

Technological Innovation: 3D Printing and Sustainable Materials

In the pursuit of holistic sustainability, companies are harnessing the power of technological innovation. Advanced manufacturing technologies, such as 3D printing, offer unprecedented opportunities to create products with minimal waste and energy consumption. An American aircraft engine supplier is exploring 3D printed jet engine brackets with internal lattice structures, achieving 20% weight reduction and improved heat transfer, translating to significant fuel savings and increased engine efficiency. This not only enhances production efficiency but also enables customization, reducing the need for mass production and its associated environmental costs.

Moreover, there is a growing emphasis on the development and utilization of sustainable materials. A leading multinational athletic apparel firm’s collaboration with a material solutions partner has resulted in innovative bio-fabricated materials made from mushrooms. These materials offer durability, breathability, and leather-like properties, minimizing reliance on animal products and fossil fuels. This not only addresses concerns about material disposal but also contributes to a broader shift towards a more sustainable and eco-friendly material palette.

A Comprehensive Strategy for Environmental Conservation:

The time for incremental change is over. In 2024, embracing a holistic sustainability strategy isn’t just a laudable ambition; it’s a competitive necessity. Businesses that weave circularity, responsible sourcing, collaboration, and innovation into the fabric of their operations will rise as leaders in a transformed landscape. To thrive in this new era, the choice is no longer between profit and the planet – it is the pursuit of both, together. The call to action is clear: redefine your approach, redefine your future.

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During economic downturns or market saturation, companies with premium brands face a dilemma: cut prices and risk profit loss or maintain prices and risk losing market share. One solution is introducing a fighter brand—a discounted version of the premium offering—to compete with lowpriced rivals, safeguard market share, and protect premium products. Unlike a multi-brand strategy, which diversifies market segments and revenue streams, a fighter brand focuses on protecting premium offerings and countering specific competitors.

Several notable fighter brand strategies have shaped industry practices. For instance, Intel introduced Celeron in the 1990s to challenge AMD’s budget-friendly line and bolster its dominance in the computer chip market. Apple responded to fierce competition in the mid-range smartphone market by unveiling the SE brand, aiming to stay ahead of rivals like Samsung. Qantas launched Jetstar to counter Virgin Blue’s low-cost model, prioritizing profitable routes and reinvesting earnings to strengthen its brand differentiation from Jetstar.

While fighter brands offer tempting solutions, they come with significant challenges in introduction and maintenance. Failures such as United Airlines’ “Ted” and GM’s Saturn exemplify the complexities and risks involved. For instance, Ted, launched by United Airlines in 2003 to compete in the budget-friendly air travel market, failed due to misalignment with the parent company’s premium image, resulting in
higher prices than competitors. Similarly, Saturn, introduced by GM in response to the rise of affordable Japanese cars, faced financial challenges from the outset due to high operating costs and pricing issues.

The real-life examples emphasize the need for meticulous assessment of factors such as user expectations, production costs, competitive pricing, and managerial attention in launching fighter brands, which forms most of the know-how of fighter brands today.

Apart from what we already knew, our work with fighter brands posed us with questions that we realized were the make or break for any fighter brand strategy –

1. Should the company even launch a fighter brand?
2. What should be the optimal positioning for the fighter brand? And how can synergies be established with the mothership (main brand)?
3. Should the association between the mothership and the fighter brand be common knowledge? And if so, to what extent?

To address these questions, we’ll examine some client cases, including a recent success story in India – Zudio:

• A MENA premium food player faced market saturation and fierce competition. Introducing a fighter brand allowed them to boost volume and maintain competitiveness by leveraging economies of scope and scale.
• A leading juice maker in MENA had a fighter brand dedicated to basic juice mixes, serving as a testing ground for premium products.
• A premium electrical and digital building infrastructures company in India that acquired a smaller player to operate as a fighter brand, targeting price-conscious consumers.
• Trent, part of the Tata Group, introduced ZUDIO to cater to value-conscious consumers alongside its premium brand Westside.

Q1. Should the company even launch a fighter brand?

The TATA Group responded to the demand for affordable apparel in tier-2 to tier-4 cities by introducing Zudio, a fighter brand, after finding it challenging to adapt their premium brand “Westside” due to its urban focus and higher price range. Similarly, a prominent premium foods player in the MENA region faced saturated markets and increased competition, prompting the introduction of a fighter brand to boost volume and maintain competitiveness. Fighter brands are crucial when needing to undercut rivals or meet growing demand without compromising the premium brand’s value, as seen in the case of Zudio catering to a lower tier of the fashion-conscious segment.

Q2. How can the fighter brand be optimally positioned and synergized with the main brand?

Precise positioning and synergy establishment are vital for a fighter brand’s success. Zudio, for instance, strategically priced its products below INR 1,000, complementing Westside’s higher range and tapping into a value-conscious demographic while preventing cannibalization. Similarly, in the food player case, the fighter brand competes directly with rivals, aligning pricing to mitigate cannibalization and leveraging the premium brand’s distribution network for economies of scale. Likewise, the leading juice maker employed its fighter brand for market testing and feedback collection, ensuring superior quality while achieving economies of scope. In all cases, such strategic manoeuvres prevented cannibalization and harnessed synergies for enhanced success.

Q3. How much should the link between the main brand and the fighter brand be publicized?

In the Zudio case, maintaining distance from Westside kept the shared parent company undisclosed to most consumers. Similarly, in the food scenario, the fighter brand was kept separate to avoid cannibalization. However, in the case of a leading electrical and digital building infrastructures in India, initially keeping the fighter brand at arm’s length proved challenging due to its lack of brand recognition. Aligning it with the premium brand enhanced its perceived value, illustrating the varied approaches companies take in associating fighter brands with the main brand. When it comes to association with the main brand, there isn’t a one-size-fits-all strategy. It is at the discretion of companies to choose their approach.

In conclusion, companies must tailor their strategies based on market dynamics, consumer preferences, and organizational capabilities to maximize the strategic value and long-term viability of fighter brand initiatives. The decision to launch a fighter brand and its subsequent association with the main brand demand meticulous consideration, with no universal approach applicable across all scenarios. Consequently, both the mothership and the fighter brand can reap the benefits from precise positioning and synergies between fighter and premium brands, contributing to market competitiveness and operational efficiencies.

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An Overview of Indian Healthcare industry in 2023

The Indian Healthcare industry continued its healthy growth in 2023 and reached a value of USD 372 bn driven by both private sector and government. The government continues to play a critical role in the sector with its focus on creation of facilities in rural India – for primary healthcare and ensuring availability of diagnostics, funding medical insurance to the low-income population (through Ayushman Bharat), driving penetration of generic medicines (through Jan Aushadhi centers) as well as funding R&D in medical technologies and diagnostics in various labs and through ICMR. Govt. spending on healthcare is now 2.1% of GDP (33% higher compared to FY19). The government has also been allocating investments to support healthcare start-ups and ecosystem.

On the other hand, the private sector has been investing strongly in capacity creation across areas (hospitals, diagnostics, medical devices etc.) as well as laying the foundation for long term growth through skill development.

Medical insurance penetration has grown rapidly over the past few years. Out of pocket spend on healthcare is now at 45% (in 2020) compared to 63% in 2014.

Key Emerging Trends in 2024 for the Indian Healthcare Industry

Covid Induced Transformations in Healthcare: Specific trends in patient behaviour induced by Covid will continue to strengthen and accelerate e.g. Telemedicine and Remote Healthcare (supported by mobile and internet connectivity) has  become mainstream with leading hospitals and other private players offering it.

Consolidation in Hospitals Sector: PE firms, MNC players, and other large national hospital chains will focus on acquiring smaller standalone private hospitals (in both large centers and in Tier-2 and 3 cities). This trend is already evident and various factors are contributing to this e.g. lack of succession planning among the promoters of family-owned private hospitals, profitability impacted due to compliance with EWS reservations in hospital beds and an overall challenges in competing with larger players for purchase of medicines and equipment, lack of quality workforce etc.

Increased Indigenisation and Local Manufacturing in India : There will be increased focus on local manufacturing of medical devices in India (and components) to move beyond assembly. This trend has received a strong boost from the successful PLI scheme of GoI. This will further accelerate in 2024 as the Public Procurement Order (PPO) is widely implemented to force government organisations to purchase locally made products. The successful implementation of the GeM (Government e Marketplace) and its continued improvement will help further. A focus on developing MedTech clusters will further be enhanced in the coming years.

Advent of Digital Tech driven Healthcare: Digital technologies will find increased usage across various healthcare areas. Some of the major areas will include e.g. Diagnosis Technologies (e.g. AI in medical imaging, smart wearables for real time diagnostics, predictive genomics), service delivery enhancement (pathology workflow automation, omnichannel diagnostics service platforms, Teleradiology, Digital Pathology) and for optimising healthcare delivery (e.g. Big Data and Analytics of patient data at a Hospital / Chain hospital or lab or aggregated level)

Point of Care Testing (PoCT) technologies will be used to drive increased availability of tests in remote areas. However the implications on ensuring quality standards, test reliability and costs will need to be assessed.

Govt.-Industry Partnerships : PPP models will be used more efficiently to drive increased availability of quality testing in government hospitals especially in rural areas.

Increased focus on compliance and quality standards: 2024 will see the Medical devices industry coming under full regulatory scrutiny by CDSCO with the implementation of standards for Class C and D devices (alongwith Class A and B implemented in 2023). This will ensure that uniform quality standards, testing and validation protocols are followed. Similarly, there will be an increased thrust on standardisation of diagnostic labs with the widespread adoption of NABL / QCI accreditations. There will be further detailing of regulatory standards for emerging technology areas e.g. AI and Software as a Device.

The issue of skilling will come into focus as government and industry will together aim to solve for training and skill gaps prevalent in healthcare sector.

An Overview of Indian pharma industry in 2023

After witnessing a higher growth in the Covid period (mainly due to demand in specific categories e.g. anti-infectives, vaccines etc.) Indian pharma industry has maintained its strong position in 2023. The FY24 growth projections for domestic formulations market is in the range of 8-10% CAGR (USD 20-22 bn) which is slightly lower than the historical pre-Covid growth rate (10% CAGR in the period FY12-20). The growth will be a combination of price increase (4-5%) and volume growth as well as new introductions. Avalon Consulting projects that formulations exports growth for FY24 at 10% (USD 22-24 bn) compared to historical long-term growth in pre-covid times of 15% CAGR. Pricing pressures and regulatory scrutiny in US market continues to be a key challenge. API exports are showing sluggish growth (5% CAGR in FY18-23) as competition from China continues to be high.

Emerging Trends

Domestic pharma market:

1. Historical model of success driven by brand / distribution / doctor reach will be threatened due to price pressures (due to NLEM as well as increased competition), increased genericization (partly driven by government) etc. Emphasis will need to shift to volume rather than value growth.
2. will focus strongly on driving quality standards in the domestic market evident in the recent crackdown on sub-standard players by CDSCO and state licensing agencies. This will favour consolidation through large quality conscious players – both captive and contract manufacturers
3. Successful players will differentiate through specialty products and therapy, focus on regional micro-markets (which will grow faster) and deeper patient engagement (through Digital initiatives and going “Beyond the Pill”)

Exports Market:

1. Pricing pressures in US market, increased competition and regulatory compliance issues are likely to pose a challenge to formulations export growth in future.
2. Exports will grow faster and successful Indian players in exports will have a mix of conventional products and complex generics (injectables, inhalation, sprays etc.), biosimilar as well as new products (branded)
3. R&D will be mainly focused on new formulation / delivery changes (complex generics). NCE introductions are unlikely to be significant – both in terms of investments and out licensing.

APIs

1. PLI and an industry view to reduce dependance on China is forcing Indian API companies to indigenize intermediates and KSMs and to improve competitiveness in the medium term.
2. Similarly, the PLI on APIs (INR 15,000 Cr outlaid by GoI) and the formulation companies drive to reduce sourcing from China will accelerate market growth through import substitution in the medium term as competitive intermediates are available locally.
3. Private Equity led consortiums are driving consolidation and investments to build scale and a potential move into CDMO organically or through acquisitions outside India.

The post An Overview of Indian Healthcare Industry in 2023 appeared first on Avalon Consulting.

There is an opportunity to use smart metering and supporting digital water management solutions to

• Optimise the usage of scarce urban water resources by minimising leakage
• Minimise Non-revenue water for the government
• Optimise taxes for the consumers of water (beneficiaries)

There are challenges in building the infrastructure, maintaining the infrastructure, and helping the various stakeholders navigate the new digital ecosystem.

We have proposed a holistic set of solutions involving public-private partnerships in building and maintaining the infrastructure, mass communication to build consumer awareness and training/mentoring for key stakeholders.

Opportunities in the digital water space:

An exploding urban population scenario, inefficient water management with the traditional systems, the smart cities mission, water management objectives laid out in the smart cities mission and technological developments such as IoT and SCADA are some of the key factors that will drive growth and opportunities in the digital water sector.

Exploding urban population: Our cities with a burgeoning population depend heavily on the local water supply. There is immense demand and stress on the local water supply as the needs are ever-increasing for urban dwellers. Increasing apartment complexes, industrial layouts, and commercial spaces in all major cities of India have accelerated groundwater depletion and degradation of freshwater supply.

*Source: Census, WHO Report

By the year 2030, at least twenty-one Indian cities will face acute shortages of water and may be marred by extreme climatic conditions and poor water management systems, according to a World Bank report.

Traditional water systems: From the perspective of urban local bodies or the water authorities in the cities, it is essential to ensure a safe drinking water supply to the cities 24/7. However, the public water utilities are riddled with inefficiencies such as lack of operational visibility, poor leakage and pressure management, inefficient energy utilisation and inaccurate demand and supply planning, because of archaic systems and processes present on the ground. The Central Water Commission report states that 40% of the water gets wasted due to leakages and thefts before it reaches the final intended consumer. With such a high rate of urbanization, these leaks and wastages lead to an increased cost of supply.

With the traditional systems on the ground, it is an ever-increasing herculean task for the ULBs to reduce water leakages and thefts and supply to every household while also maintaining the quality of the water supply. It becomes essential to reduce non-revenue water (unbilled water) to reduce the financial burden on ULBs for water supply and ensure the financial sustainability of the water utilities.

Smart Cities Mission: To combat various inefficiencies in public management systems the Government of India has launched the “Smart City Mission” and with it a plethora of “smart” opportunities have been introduced. The mission focuses on urban development and retrofitting or upgradation of urban facilities, thereby giving a decent quality of life to urban dwellers. Never was such a large-scale dedicated project launched by any government to build smart cities. A total of Rs 1,70,983 Crores has been invested to build 100 smart cities across the country. Amongst the many core infrastructure elements that are associated with Smart city projects, water management systems form a crucial part.

Water management objectives: The smart cities mission has laid out a strategy to ensure smart water supply to urban users, thereby paving a roadmap for city management and technology suppliers in the digital water space.  The mission includes and proposes efficient water management system solutions such as “Smart meters and management”, “Leakage identification”, “Preventive maintenance”, “Water quality monitoring”, and “Water recycling”. The mission also strives to keep the solutions measurable through a few key performance indicators.

A crucial KPI is the % of non-revenue water in the system. Non-revenue water (NRW) can occur through real losses such as leaks in pipelines or through apparent losses such as metering inaccuracies. High levels of NRW indicate severe detrimental impacts on the financial viability of water utilities. Apart from several environmental benefits such as reduced energy consumption and efficient resource management, an effective NRW is attractive for smart city management and water utility suppliers as it improves the bottom line through efficient management of operations and maintenance.

Another key performance indicator is the % of the establishment and maintenance cost of water supply. An optimal management of establishment and maintenance costs is necessary as there are always trade-offs between the two. A low establishment cost may lead to a high operations cost and vice versa. Inefficient management of water utility systems also leads to high maintenance costs leading to inefficient resource utilisation and unnecessary spending of budget on MRO activities.

A third important KPI is the % of O&M cost covered by urban users through taxes. Covering the increase in water management costs through frequent tax rate hikes may cause civil dissatisfaction. This practice is also not sustainable for the future of a city. The only alternative method is to reduce the operation costs through efficient systems management, thereby increasing the percentage of cost covered through user taxes.

The three KPIs coupled together provide an excellent opportunity for various stakeholders to take part in digital water solutions to combat various inefficiencies in the utility system.

IoT and SCADA: To meet the challenges of utilising a scarce resource efficiently and effectively measuring and billing the water supplied, advanced digital technologies are required. Smart water management uses a combination of hardware, software, and analytics for the efficient distribution of water in a city.

With the advancement of emerging technologies by various private organisations, Smart water solutions can be implemented using remote actuators, sensors, pressure valves and SCADA (Supervisory Control and Data Acquisition) systems.

The SCADA system enables remote 24×7 monitoring of the entire water supply distribution network including various parameters on a real-time basis such as:

1. Quality of water (pH, chlorine, turbidity, dissolved oxygen level, chemical oxygen demand etc.)
2. Water pressure
3. Flow level
4. Performance of Control elements (e.g. – valves, actuators)

Data regarding all these parameters are collected through various sensors placed within the network. The data from all sensors get assimilated at the central control station for analysis. The real-time data analysis identifies inefficiencies, anomalies, and leakages in the network. The analysis highlights the red flags for the authorities to take necessary actions, thus reducing response time while enhancing the reliability of the system. Issues of inequitable or inadequate water supply to parts of the network, complaints from citizens, loss of revenue due to unbilled water etc. automatically get taken care of through the SCADA-based smart water management system. This leads to cost savings through an overall improvement in energy efficiency within the network. Not to mention, there are even savings through reduction in operational costs.

With the advent of 5G and better computing power, the whole digital water value chain be realised with real-time data transfer and computing power

Challenges in implementing digital water:

However, despite the issues faced by our cities around water supply and the numerous advantages of using SCADA and IoT-based smart water systems, very few cities in India have implemented smart water management systems. Delhi, Ahmedabad, Bengaluru, Pimpri-Chinchwad, and Naya Raipur are some of the cities that have implemented the system. Nashik, Koppal, and Okhla are some of the places which have plans to implement the system shortly.

Main challenges in the adoption and implementation of IoT and SCADA systems for water management:

1. MRO and compatibility: IoT and SCADA use a wide range of hardware and software which very often might be sourced from different vendors. To ensure that all the hardware and software are maintained and work seamlessly with each other might be a challenging task. If there are legacy systems in place, then it can be even more difficult, as the legacy systems might not be working well with most modern-day equipment or software used in SCADA systems. There also must be a large-scale exercise in maintenance, repair and overhaul of the new IoT and SCADA system with the existing ERP and MIS systems, ensuring harmonization of the data formats, data exchange protocols, security mechanisms etc.

To avoid issues of compatibility arising midway during the MRO process, the implementing authority must collaborate closely with vendors and the system integration partners to identify compatibility issues at an early stage and address them at the earliest.

1. Scalability: IoT and SCADA-based digital water systems require several hardware such as sensors and actuators etc. To reach a wider area, the count of hardware components also increases proportionally. With the increase in the number of hardware components implemented, the cost of data collection increases. The lack of economies of scale in the system defeats the entire purpose of making cost-efficient SCADA-based water systems to identify inefficiencies in the system for which actions need to be taken. As these systems grow with more hardware components, the overall system becomes more complex and increases the risk of failure. Thus, reliability becomes an area of concern.

However, this can be managed if the implementation is done with a robust scalable system architecture in place from the beginning. The planning must be done with the possibility of adding more hardware components and processing more data without any compromise on the reliability of the system.

1. Training – SCADA-based smart water systems are quite complex and require specialized knowledge. It is critical to devise tailor-made training programmes for people with a variety of skill levels and experience. Apart from the training, it can also be a huge change management exercise to drive government officials of water supply entities in this major shift in the method of working. The training should not just focus on features and functionalities but also on the procedures and protocols to be followed for effective maintenance and operations.
2. Cost – Modern-day IoT and SCADA systems are complex systems with multiple specialized components and advanced software making them quite expensive to not just procure and implement but also to maintain. Ongoing support from the implementation partner for the deployment of specialized manpower, hardware maintenance and replacement, and software updates, is also a significant part of the cost. Therefore, in a large-scale project implementation of this nature, it is essential to prepare a financial model assuming costs of all nature and expected revenues to gauge the financial viability and the working capital requirement.

Proposed solutions to overcome various challenges in implementing digital water:

Stakeholders need to look at the problems and solutions therefore from a three-pronged approach. The first level is the set of public system stakeholders, the next are the project contractors, startups and private organisations who design, develop, operate, and transfer the systems and the last level is the end users or beneficiaries of the digital water systems.

1. Public-private partnership is a powerful method to ensure innovation stays in public management systems. Water utility authorities can float tenders to attract leading startups and organisations to build, operate and transfer smart water systems. PPP in smart water management not only offers business opportunities for various private sector organisations but also ensures continuous innovation from the public authorities’ standpoint.
2. Workshop with public authorities: Public advocacy organisations, consulting firms and technology innovators need to hold workshops with public bodies to keep them abreast of the latest technological developments and the various benefits that can be realised in public management systems.
3. Engagement with beneficiaries: The water supply authorities or the Urban Local Bodies themselves need to engage with beneficiaries on a continuous basis to discuss the problems being faced and build consensus on possible solutions that can help them.
4. Mentorship from benchmark cities: Urban development authorities can reach out to smart cities that have already implemented smart water solutions and request guidance from the respective leadership stakeholders on the implementation plans and roadmaps.
5. Innovative financing methods: Project financing is a major obstacle as implementing IoT and SCADA-based hardware requires a significant amount of money. Since the public systems depend on financing the systems through taxpayers’ money, innovative financing options can be looked at. For example, through public-private partnerships, capital funds can be utilised to implement the systems. Performance or KPI-based financing can also be explored to bridge the gap in financing needs. Innovative financing can be a breakthrough in implementing smart water management systems.

Conclusion:

In conclusion, there are good arguments in favour of smart metering and digital water management solutions. They have the potential to optimise water resource usage, minimize non-revenue water, and enhance tax efficiency with benefits for all stakeholders. The challenges of infrastructure development and maintenance, as well as navigating the digital ecosystem can be addressed by public-private partnerships, mass awareness building, and stakeholder training.

The post Smart cities and digital water management solutions appeared first on Avalon Consulting.

In 2020, the fashion sector manufactured and distributed approximately ~150 billion clothing items worldwide, equivalent to around ~20 pieces for everyone. The abundance of garments highlights the remarkable pace at which fashion trends evolve and how our wardrobes have become a testament to the ever-changing global fashion landscape. This staggering production rate raised important questions about manufacturing and the environmental impact of such massive clothing consumption.

Bleak Reality of Textile Production

As per a study by the United Nations Environment Programme (UNEP), approximately 3,800 litres of water are used to make a pair of jeans, equating to 33.4 kgs of carbon emissions globally. The majority of the emissions come from upstream activities such as material production, preparation, and processing. Now, even though the Indian textile and apparel industry contributes to 2% of India’s GDP, its production contributes to 7% of global GHG emissions which is expected to reach 10% by 2030. As the need to address climate change becomes the need of the hour, India’s fast fashion industry must focus on reinventing its manufacturing processes.

Indian Shoppers’ Spend per Month on Clothing

Impulse Consumerism

From the above chart, consumers prioritize affordability and tend to overlook the chemicals employed in garment production. Their primary aim is to achieve immediate gratification, frequently ignoring the lasting consequences of clothing disposal.

Around three out of five clothing products find their way to incinerators or landfills within a few years of being produced. Clothing doesn’t biodegrade easily in landfills and could persist there for more than two centuries before breaking down. This also amplifies the carbon footprint of the garments within the landfill. Globally, an estimated 92 million tonnes of textile waste are generated every year, which is akin to a garbage truck filled with clothes being dumped into landfills every second. By the year 2030, the projected amount of discarded textile waste is expected to surge to 134 million tonnes. (Source: BusinessInsider). In India, the annual quantity surpasses one million tonnes, with a significant proportion originating from households. According to the Indian Textile Journal, textile waste also holds the position of being the third-largest contributor to municipal solid waste in the country.

Manufacturing Value Chain: Through the lens of key contributors

Manufacturers and consumers are catalysts in fashion industry exploitation. Manufacturers’ unfair practices and use of inorganic materials lead to environmental harm. Consumers’ demand for disposable trends and lack of awareness perpetuates this cycle.

Paving the path towards sustainable fashion:

A. Manufacturers

In the West, a multitude of efforts have been implemented to promote sustainable textile manufacturing. These are backed by government initiatives, non-profit partnerships, fashion industry platforms, and the active involvement of both new and established brands. For example, the well-renowned denim manufacturer, Levi’s, introduced a ‘water<less’ collection of denims in 2019. Otherwise known for requiring vast amounts of water during its manufacturing process, the ‘water<less’ denim collection saves water throughout the process. Levi’s also works towards 100% sustainably sourced cotton and recycles old jeans into home refurbishment. Similar initiatives need to be practiced by Indian manufacturers to expand awareness.

India is a leader when it comes to manufacturing eco-friendly materials such as organic cotton, hemp, bamboo, linen, cork, natural dyes, and fruit skin and it must leverage this powerful tool. The above-mentioned fibers do not require pesticides or fertilizers in their production and conserve more water and energy than synthetic fabric production. Of these, organic cotton is one of the promising contributors to green textiles.

The popularity of organic cotton is proportionate with its market size, which is expected to reach US$ 6,730 million in 2028 globally, i.e. a 40% CAGR from the period 2021-28 (Source: Fortune Business Insights). India is the leading producer of organic cotton and has produced 1.2 million tonnes (51% of global production) (Source: TOI) in 2022. In fact, India has a golden opportunity to tap into its considerable potential in the organic cotton market and embrace innovative approaches to furthering sustainable fashion concepts.

B. Consumer

The end customer is the apex player of change in the value chain.  The consumer has access to four pathways for leveraging change, and can traverse multiple routes simultaneously:

1. Less is more – While clothing items cannot be classified as need-based purchase commodities, there is scope for fast fashion to slow down. Urban consumers in India are becoming more aware of the environmental and ethical implications associated with the rapid production and disposal of low-quality garments. Furthermore, the COVID-19 pandemic served as a catalyst for reevaluating consumer priorities. Lockdowns and restrictions prompted many individuals to reflect on their consumption habits and focus on what truly matters. This introspective period has translated into a heightened demand for items that hold meaning and longevity, rather than fleeting trends. Many are shifting their strategies to align with sustainability and ethical practices, offering well-crafted, durable garments that stand the test of time. Slow fashion, characterized by its focus on quality, durability, and ethical production, is gaining traction as an alternative to the rapid turnover of fast fashion.
2. Buy Smart – There’s a common perception that only the wealthy can afford sustainable fashion, given the overwhelming presence of affordable and quickly changing fashion trends endorsed by the media. However, the reality is quite different: Anyone with the intention of making informed shopping decisions can tap into a range of options that provide avenues to sustainable clothing. In terms of longevity, a synthetic piece of clothing will have a lifetime of at most one year, whereas organic clothes can be used for a longer period and if, discarded will not have a negative impact on the planet. According to the India Sustainability Report 2020, 45% of the surveyed participants expressed a desire to embrace recyclable fashion, 49% were inclined towards adopting sustainable practices, and 22% showed a preference for upcycled garments. (Source: India Sustainability Report)
3.  Recycle – Global fast fashion brand, H&M, has moved away from its roots by introducing its “conscious” collection, made using organic cotton and recycled polyester in India. The brand has set up the “let’s close the loop” programme, where shoppers exchange old garments at H&M stores and in return, receive gift vouchers. The old garments are marketed as second-hand clothing. If it is not suitable to be worn, they’re turned into other products, such as remake collections or cleaning cloths.
4. Repurpose – An Indian eco-conscious brand, Doodlage, works with a mindset to upcycle worn-out or used fabrics into new ones. The ideology is to minimize waste disposal and repurpose it into different products. Few home-grown brands work with the same ideology, but India’s not there yet. To achieve sustainable fashion as a way of life, there is an alarming demand for local brands to work towards a circular approach.

Without a doubt, sustainable fashion is paving the path to new practices in the lifestyle and fashion industry. Approximately 50% of shoppers want brands to be more sustainable and have acknowledged an eco-centric shopping culture. Buyers are enquiring about the fabrics and choosing organic textiles over chemical-based products. Mindless shopping hauls are now taking a back seat, but we’re not there yet. The journey towards a truly sustainable future may still have hurdles to overcome, but the path of change has been set. The onus lies on key stakeholders i.e. consumers and manufacturers, to work together and drive this transformation, ensuring that Threads of Change continue to weave a fabric of a better, greener, and more responsible fashion world in India.

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Introduction:

One of the fastest-growing industries in the worldwide market, the Indian aviation sector has seen substantial expansion in recent years. India has a sizable population and rising disposable incomes, which has caused the demand for air travel to soar. However, the industry is suffering from unsustainable debt, and rising expenses, due to which numerous airlines have either been grounded or forced to merge. A recent victim was Go First.

Go First Saga:

What led to the failure of Go First?

Despite having a significant presence in the domestic aviation industry Go First filed for bankruptcy owing to the grounding of over 45% of its fleet due to failed engines and a lack of spares provided by US engine manufacturer Pratt & Whitney. This led to a loss of $ 1.3 bn.

Source: Statista

Passenger airlines in India barely make a PAT of 0.5 to 1% even with their entire fleet being functional, so we can imagine the financial burden on Go First.

Why are airline companies choosing P&W despite being plagued by engine problems?

Pratt and Whitney’s engines are popular with airlines as the engines are said to be fuel efficient (saving up to 16% fuel), have low maintenance costs and the company offers attractive deals to customers.

Source: Statista

Impact of Go First insolvency on the Indian aviation industry:

• The Go First situation may make it easier for competitors like IndiGo, Air India, SpiceJet, and newcomers like Akasa Air to get a bigger chunk of the market
• Customers are at a loss because, in the coming months, airfares are anticipated to increase significantly with fewer players dominating the industry
• On June 6th, the minister of civil aviation presided over a high-level meeting with the airline advisory group and urged airlines to come up with a plan to ensure affordable fares amid an increase in ticket costs, particularly on certain routes that were earlier served by Go First

Indian aviation sector potential:

• In the next ten years, India is anticipated to overtake China and the United States to become the largest civil aviation market in the world in terms of passenger volume according to International Air Transport Association
• India’s aviation sector has seen substantial expansion, with domestic passenger traffic expanding at a CAGR of roughly 14.5% over the last six years
• In the first quarter of 2023, domestic airlines transported over 37.5 million passengers, an increase of 51.7% from the same period last year
• According to CAPA Centre for Aviation, India’s current domestic aviation traffic of 144 million is expected to soar to 350 million passengers by 2030
• However, India’s per capita penetration of domestic air travel (Domestic air passengers/Total population: 0.13) according to the world bank remains much lower than that of nations such as China (0.49), and Brazil (0.57), showing unrealized potential

Indian aviation sector challenges:

1. Volatile fuel costs:

Aviation Turbine Fuel (ATF) used to cost ₹ 46 per gallon in April-2020, but it has now skyrocketed to ₹ 220 per gallon in March-2023. International oil prices are influenced by a wide range of circumstances such as geopolitical events, supply-demand dynamics, and economic conditions leading to significant volatility in oil prices which can often ruin an airline’s success.

Furthermore, value-added tax (VAT), which may be as high as 30%, is levied on ATF by the states. The only option to lower ATF costs and stabilize the aviation industry is to lower taxes because 85% of India’s oil needs are satisfied through imports.

2. Regulatory Constraints:

The government controls the allotment of airport routes and slots. Airlines may have constraints on the routes they may run or the number of flights they can arrange in specific instances. This has the potential to hinder their capacity to extend their network and meet passenger demand. If an airline is unable to acquire profitable routes or enough slots at major airports, its growth prospects and financial viability may suffer.

3. Fierce competition and pricing wars:

Low-cost carriers (LCCs) often employ a low-cost business strategy that emphasizes cost-effectiveness and basic offerings. This has exacerbated price competition as full-service airlines compete to maintain their market share by matching or undercutting LCCs’ rates thereby decreasing the margins of airlines.

4. Inefficient infrastructure:

Due to the tremendous development of air travel in India, several airports are experiencing congestion. The present infrastructure is struggling to keep up with the growing number of flights and passengers. Congestion causes take-off and landing delays, leading to increased fuel consumption, personnel expenses, and operational inefficiencies.

5. Seasonal demand and cyclicity:

Seasonal demand and the cyclical nature of the Indian aviation business might result in lower earnings for airlines. Passenger demand fluctuates throughout the year, with peak seasons characterized by high passenger traffic and vice versa. Airlines may experience significant competition and pressure to cut rates during busy seasons, lowering profit margins. In contrast, during off-peak seasons, airlines may struggle to fill seats, resulting in underutilized capacity and higher per-passenger expenses.

Conclusion:

The airline industry is competitive, and not everyone can succeed. The failure of airlines in India can be attributed to a combination of intense competition, high operating costs, regulatory challenges, and macroeconomic factors.

To address these issues and promote a more sustainable aviation industry the following measures can be followed:

1. Reducing the VAT on aviation fuel by state governments as its price contributes to 45% of an airline’s overall operating costs.
2. Streamlining the regulatory environment for India’s aviation industry. Government should act as a facilitator rather than a regulator, encouraging greater transparency with industry stakeholders.
3. Developing infrastructure to improve regional connectivity by building new airports and transforming existing ones.
4. Utilising advanced analytics to predict demand with accuracy can help businesses better understand the market and develop a competitive pricing plan in response.
5. Stakeholders, including the government, airlines, and regulatory bodies, must collaborate to create a conducive environment for growth and address the underlying challenges facing the sector.

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Millets, a diverse group of small-seeded grasses, have a long history of cultivation spanning centuries and have been a staple in the diets of various communities worldwide. These hardy crops offer numerous advantages, such as their adaptability to diverse agro-climatic conditions and their exceptional nutritional content.

However, over the years, millets have experienced a decline in India for several reasons. The decline in millet consumption in India can be attributed to various factors:

• Emphasis on the Green Revolution: 1960s-70s Green Revolution prioritized high-yield rice and wheat, benefiting from government support and subsidies and establishing their competitive edge in food production.
• Shift in Dietary Preferences: As India experienced socioeconomic changes, dietary preferences shifted towards refined grains like rice and wheat. Consumers leaned towards more processed and convenient food options, leading to a decrease in the demand for millets.
• Limited Market Access and Promotion: The availability of millets in retail outlets was restricted, and there was a lack of awareness regarding their nutritional benefits. Inadequate marketing strategies contributed to the decline in consumer demand.
• Perception and Stigma: Millets were often associated with poverty and rural lifestyles, resulting in a negative perception among urban consumers. These perceptions influenced consumer choices and hindered the acceptance and integration of millets into mainstream diets.
• Lack of Research and Development: Insufficient investment in research, crop improvement, and value-added product development hindered the innovation and diversification of millet-based products.
• Farming Challenges: Millet cultivation faced various obstacles, including limited access to improved seeds, insufficient technical knowledge, and inadequate market infrastructure.

Despite the decline in millet cultivation, these ancient grains offer numerous benefits that make them a valuable addition to our diets and agricultural practices.

Benefits of Millets

Water savings

When we compare the water needs of rice and millets, a clear distinction emerges. Research suggests that while it takes an astonishing 5,000 liters of water to produce 1 kg rice, millets flourish with significantly lower water  consumption, typically ranging from 650 to 1,200 liters.

Given these aspects, a notable transition from rice and wheat to millets in India could lead to remarkable advantages, particularly substantial water conservation. For example, even with a conservative projection of substituting just 10% of rice production with millets, it could potentially save around 545 trillion litres of water.

Daily average nutrition intake

India accounts for the second-highest number of diabetic patients, especially in urban areas, which is nearly 18% of the global count of diabetic patients. This is a visible health risk for the younger demographic. Millets are known to increase insulin sensitivity and lower the level of triglycerides and can act as a healthier substitute for the consumption of cereals like rice and wheat (See Table below).

The above workings indicate a 26% increase in daily protein intake, 15x increase in iron and 32% increase in fibre in addition to 7% decrease in carbs.

Reduction in chemical fertilizer

Millets, rain-fed for ages, need minimal fertilizers. Unlike major cereals, some millets like finger and pearl millet can partner with nitrogen-fixing bacteria, decreasing synthetic nitrogen fertilizer demand.

They have lower nutrient demands compared to other cereals and have evolved to thrive in resource-limited environments. Millets thrive with low nutrients, resist insects, need minimal fertilizer, and mature in 70-80 days, unlike rice and wheat taking over 100 days.

Low carbon footprint

Millets are eco-friendly due to its lesser dependency on outside resources, drought resistance, and smaller carbon footprint (around 3,218 kg CO2e/ha). In contrast, wheat and rice have higher footprints (about 3,968 and 3,401 kg CO2e/ha) as per various researches

Revival of Millets

• Farmer-Centric Support and Training

State governments can provide targeted support to farmers interested in cultivating millets. This support can include financial incentives, access to quality seeds, training in modern millet farming techniques, and knowledge sharing platforms. Additionally, establishing millet farming cooperatives or farmer groups can help foster collaboration and exchange of best practices among farmers.

• Investing in Research and Development to improve productivity

The primary hindrance in maintaining foodgrain production while expanding the cultivation of millets is the difference in yields of millets and cereals like wheat and rice. Millet crops have relatively lower yields in comparison. To address food security concerns due to this, it is imperative to reduce this productivity gap. This requires focussed investment in research and development on millet crops, to create improved varieties with higher yields.

Case for Millets in India:

Source: Directorate of Economics and Statistics, Ministry of Agriculture; NITI Ayog

The area used by excess production is roughly 11 % of the total area under wheat and rice. The workings indicate that at least 5-10% of the total area under wheat and rice can be used for millet production sustainably and without risking the food security of the country.

Balancing the resources

The relation between irrigation practices and cultivation significantly influences crop yields. The implementation of policies that promote millets may result in heightened competition for water resources with rice and paddy, especially when both crops become equally profitable. Therefore, it becomes crucial to identify regions where this trade-off is minimal as it will be a key factor in ensuring sustainable agricultural practices.

Sustainable Consumption Campaigns

Encouraging consumers to choose millet-based products as a sustainable and healthier option can create a demand-driven market. Collaborating with retailers, grocery stores, and e-commerce platforms to promote millet products can lead to increased consumption.

Millets in Public Nutrition Programs

Incorporating millets into government-sponsored nutrition programs, such as school meal schemes and mid-day meals, can significantly boost their consumption. This not only increases the demand for millets but also creates a future generation of consumers who are aware of their nutritional value.

Empowering marginalized farmers

Governments and NGOs can work together to create awareness campaigns that highlight the economic benefits of millet cultivation. Initiatives such as the Odisha Millets Mission have empowered women in tribal areas to revive millet farming and exchange traditional seeds, leading to the revival of multiple millet varieties.

In conclusion, millets present a promising solution to address some of the pressing challenges we face today, from climate change and water scarcity to nutritional deficiencies and sustainable agriculture. As we look ahead, embracing millets is not just a return to our agricultural heritage but a bold step towards a more sustainable and nutritious future where the benefits of millets are cherished and integrated into mainstream diets worldwide.

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As the human race pushes the boundaries of the known and explores the unknown, we are in constant need of the best tools to achieve the impossible. We need tools that are made from materials of the best quality. The need for higher quality and customized materials has been growing.

Steel is an important commodity in the global markets and has widespread applications. In the realm of modern steel production, technological advancements have played a pivotal role in enhancing efficiency, quality, and cost-effectiveness. The techniques have not only improved the metallurgical properties of steel but also revolutionized the manufacturing process, leading to increased productivity and reduced environmental impact.

Globally, the demand for high-quality steel products with customized properties has been witnessing growth owing to the specialized needs for materials across sectors. The Automotive industry is a major consumer of specialty steel. The Aerospace and Defence sector has stringent requirements for materials used in aircraft, missiles, and defence systems. Similarly, specialty steels find applications in the Medical and healthcare sectors for the manufacturing of surgical equipment, implants, and other medical devices. Furthermore, there is a growing need for specialty steels in the Energy sector, Tool & Die industry, Infrastructure development, and Consumer Electronics. Additionally, the need for sustainable and energy-efficient manufacturing processes led to companies adopting Ladle Metallurgy and Continuous Casting for producing specialty steels.

Ladle Metallurgy, also known as secondary steelmaking, is the process of refining molten steel after it is tapped from the primary steelmaking furnace. Ladle metallurgy helps remove impurities and adjust the composition of the steel to meet customers’ demands.

Continuous Casting is a technique that allows for direct production of semi-finished steel products. It eliminates the need for ingot production and subsequent reheating.

The key indicator of penetration and adoption of Ladle Metallurgy and Continuous Casting is the volume of demand for specialty steels across industries. Ladle Metallurgy is often a necessary step in the manufacturing of specialty steels.

According to a research study by the Business Research Group, the global special steel market size grew from $175B in 2022 to $188B in 2023. It is expected to grow at a cagr of 7.3% till 2027. Government of India in October of 2021, recognizing the potential and global demand for specialty steels, has approved a PLI scheme for manufacturing specialty steels in India with a financial outlay of ~$860 million over a five-year period. The scheme is expected to attract investments worth ~$5.4 billion and expand the specialty steel capacity by 25 million tonnes.

The performance of the Ladle refining furnaces is another key indicator of penetration of Ladle metallurgy and the growth in sales of the furnaces signal the pace of adoption by the industry.

In the year 2021, India imported Ladles worth USD 3.5 million and exported USD 1.8 million in total. However, the numbers are significantly lower than the trade that had taken place pre-pandemic. The covid-19 pandemic followed by the Russia-Ukraine war has had a significant impact on this market. The supply chain disruptions have hampered the economic activity of major players. As the world recovers from these disruptions, the market is expected to experience slow but steady growth in the near future.

*Source: ITC TradeMap

These macroeconomic events can be considered a temporary aberration in the rapid growth of the ladle refining furnace market and the pace of growth is expected to return to normality.

According to MarketWatch, the global Ladle Refining Furnace market is expected to witness an accelerated growth of 13.7% between 2023 & 2030. The market is experiencing growth in the North America, APAC, Europe, and China markets. APAC in particular is expected to drive the growth of the market owing to the need for fast-paced infrastructure development and construction activities.

In addition to Ladle Metallurgy and Continuous casting being utilized for the manufacturing of refined steels, they minimize the operational costs of manufacturing by reducing the need for downstream processing and costly secondary treatments. This makes the overall steel production process more effective. Continuous casting, on the other hand, enables the production of wide-ranged semi-finished products with precise dimensions and consistent quality. This enables the companies to cater to diverse customer demands and optimize product mix, enhancing market competitiveness. The elimination of ingots and subsequent reheating also reduces energy consumption and increases productivity for companies.

As the steel industry continues to evolve, the adoption and integration of advanced technologies will be paramount for companies striving to remain competitive in the global marketplace. The financial benefits derived from these innovations will propel the growth and sustainability of steel manufacturers in the future.

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Recently, a combination of government measures and industry events have found some OEM players in a fix. The first blow came in the form of the government decision to implement a gradual roll back of FAME II subsidies. Then, followed a decision to withhold subsidies to the tune of INR 1,500 crores due to some players finding themselves on the wrong side of regulatory requirements.

The background

The FAME scheme was born in 2015 as an initiative of the Modi government to address the challenges faced by the EV industry, such as high upfront costs and limited charging infrastructure. The idea was to provide financial incentives and support to enable faster adoption of EVs. After a successful phase I program, FAME II was launched in 2019 for a period of 5 years with an outlay of INR 10,000 crores. This time, the focus was on public and commercial transport with an extension of such benefit allowed to privately owned electric 2-wheelers (e2W). However, from June 1^st of this year, the government implemented a rollback resulting in the erstwhile rebate of INR 15,000 per KWH of battery upto a maximum of 40% of costs of the e2W reducing to INR 10,000 per KWH upto a maximum of 15% of the costs of the e2W.

Meanwhile, a parallel set of events was also playing out. A string of anonymous emails were circulating, alleging misappropriation of the subsidies by some e2W entities. Following this, when a government investigation was conducted, it was found that OEMs were not adhering to one of the key requirements under the FAME II scheme – that of fitting the EVs with at least 50% locally made parts. The reasons proffered for such non-compliance varied across the OEM landscape. Some stated that the supply chain disruption simply did not allow them to make the local purchases as required, while others claimed that there were challenges to identify any serious local part manufacturers because of the low adoption. Be that as it may, such non-compliance meant the government was far from pleased.

Additionally, an ‘innovative” pricing move by some players also added to the ire. This flouted another criteria of the under FAME II, that requires e2Ws to be priced below INR 1,50,000 to qualify for the subsidies. While some toed the regulatory line, others tried to work around this stipulation by segregating the items to be sold i.e. they priced the 2 wheeler under INR 1.5 lakh, but charged an extra amount for batteries and software. Thereby, they were able to position themselves as genuine subsidy claimants whereas the reality was anything but.

The resultant outcome of these actions was that the government withheld the abovementioned subsidies till certain corrective measures were undertaken by the erring parties. This step, coupled with the gradual rollback of the FAME II subsidies has found the e2W industry going back to the drawing-board for a reassessment of strategies.

Impact of the twin measures:

1. Price increase of e2Ws: OEMs are employing varied pricing approaches. Some, like OLA Electric have adopted a flat price increase of INR 15,000 and are absorbing the excess subsidy loss. Others, like Ather have used a differential pricing approach with the price increases varying for different models. Bajaj Auto, on the other hand, has taken a measure to pass on the entire subsidy loss of about INR 22,000 to the customer directly.
2. Longer transition to EV adoption: While the major players like OLA and Ather are backed by investments and are flush with capital, smaller players in this space may find the rollback unfair preferring the subsidies to have gone on for longer. As these players plan their pipeline for effective sourcing and work on their pricing strategy there could be longer lead times in production. Thereby, the initial fillip provided by the original subsidy scheme may not necessarily come to a halt, but will surely decelerate for the time being.
3. Operational inconvenience: Players who unbundled the structure of the e2W and sold the software and batteries separately to customers are now required to compensate customers. The typical payout is estimated to be around INR 120-140 crores for those guilty. This unplanned cost on their books will also translate to an operational challenge as the quest to identify past buyers to effect refund will begin. This may not fundamentally change the gameplans of the OEM players, but will certainly lend some interim inconvenience.

The future:

These measures have effected a pendulum swing in favour of ICE 2-wheelers.  Furthermore, with an election year upon us, there is a possibility that the government might exert pressure on OMCs to reduce petrol prices thereby offering an additional blow for e2Ws as the ICE vehicles could appeal more to customers. The record e2W sales of ~105,000 units in May this year will diminish for the time being. But, it is unlikely that the overall adoption of e2W will be adversely effected. The TCO of e2W still makes it a more advantageous option over ICE 2-wheelers in the long run. Also, since the impact has been on the industry as a whole and not a particular brand, it is easier for the market to absorb changes since it cuts across OEMs.

To conclude:

It was only a matter of time before these subsidies were gradually phased out – that is the very nature of the beast. Subsidies are meant to offer a boost to overcome challenges but once such hurdles are addressed, a rollback is necessary to ensure development of manufacturing and engineering prowess. The gradual tapering down of the subsidies by the government (as opposed to complete a slashing down) cushions any adverse impact as the challenges that manifest can be effectively gauged before any recalibration follows. As to the withholding of subsidies, it signals a fair action for erring parties who try to transgress the boundaries laid out by stipulated regulations. But quicker decision making in future investigations and clear communication will certainly help alleviate the uncertainty that the companies were dealing with this time around.

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Although the term ‘influencer’ was officially added to the Oxford Dictionary in 2019, influencers have long existed in various forms in society, such as movie stars, social leaders, or even fictional figures like Batman or Spiderman of the world. While the modes of communication have varied, these influencers share a common ability to shape and inspire those who admire them.

As social media swept the world, it fuelled a significant surge in the popularity of influencers, who amassed massive followings on platforms such as YouTube, Facebook, Instagram, and TikTok. By resonating with their audience as relatable figures, these influencers became individuals who resembled ordinary people, creating a sense of familiarity that struck a chord with their followers. Brands quickly recognized the value of these voices and began leveraging them to promote their products and services. Influencer marketing spend has now become a substantial part of overall marketing budgets. In fact, the influencer marketing market was valued at ~ 10 Bn USD in 2021, which grew from a meagre 1.6 Bn USD in 2016. This is only expected to grow in the coming years at CAGR north of 25% as predicted by various studies.

With the growing popularity of influencers, a new trend has emerged within this realm: the rise of virtual influencers. These digital avatars, created using CGI (Computer-Generated Imagery) or animation, have gained substantial followings on social media in recent years. Renowned virtual influencers such as Lil Miquela (3.3 million followers), Shudu (2.2 million followers), and Bermuda (1.2 million followers) are just a few examples.

To delve deeper into why brands, choose to explore virtual influencers over human influencers who may be more relatable, we must recognize that virtual influencers offer a range of benefits. Brands now recognize the potential of virtual influencers as a long-term investment with recurring returns. Unlike human influencers who require periodic contract renewals and negotiations, virtual influencers offer a more stable and controllable presence. For instance, Myntra’s in-house influencer ‘Maya’ serves as an excellent example of how brands can leverage virtual influencers for long-term brand representation. As Maya guides the audience with trendy fashion choices, she becomes the face of the brand. While the initial investment in Maya’s development and subsequent upgrades may incur significant capital expenditure, once created, Maya can consistently engage with the audience without the need for contract renewals or potential conflicts that may arise with human influencers.

Virtual influencers also provide brands with creative control. Brands have complete control over the appeal, appearance, and personality of virtual influencers. They can carefully craft the digital avatars to align with their brand identity and values, ensuring consistent brand messaging. Returning to the example of Maya, Myntra can curate Maya’s style and content to reflect the brand’s fashion-forward image, seamlessly integrating their products into Maya’s recommendations.

Furthermore, virtual influencers offer versatility and reliability simultaneously, making them all the more appealing. Virtual influencers are available 24/7 and can consistently generate content, ensuring a continuous brand presence in the digital space. Noonoouri, a popular virtual influencer who signed with IMG Models, exemplifies this advantage. Brands can leverage Noonoouri’s virtual presence for various fashion campaigns without the limitations of physical presence or logistical constraints.

Another differentiating factor is that these CGIs provide a platform for experimenting with new and unconventional ideas that may not be practical or feasible with human influencers. Lil Miquela, a prominent virtual influencer, partnered with Prada for a capsule collection in 2018. This collaboration merged the virtual and physical worlds, blurring the lines between reality and fiction. The campaign generated significant buzz, attracting attention from both fashion and technology enthusiasts, effectively positioning Prada as an innovative and forward-thinking brand.

While human influencers offer relatability and authenticity, virtual influencers bring forth unique advantages such as stability, creative control, versatility, and reliability. Brands now have the opportunity to leverage the strengths of both types of influencers based on their specific objectives and target audience. This coexistence between human and virtual influencers is expected to be the norm going forward, with ongoing innovations and experiments shaping the influencer space. As technology continues to advance, we can anticipate enhanced immersive experiences involving both human and virtual influencers, leading to an exciting and transformative future for influencer marketing.

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