E-commerce experienced rapid growth as consumes were forced to stay at home due to lockdown. Grocery retail remains unaffected as consumers prioritized essentials; on the other hand, the non-food retail suffered on account of the extended lock-down restrictions. The travel, leisure and restaurants had to close at the beginning. Most restaurants very quickly managed to develop alternative business models and focused on pickup and delivery business, which secured us at least around portion of pre-COVID19 revenues.
The business services sector is the base foundation for a lot of companies, since it helps them focus on their core competencies to increase their efficiency and get high quality services fulfilment from specialized business service providers. The business services sector helps the companies to keep their in-house operations cost low and helps them to garner better financial performance.
The pandemic has also brought in a great disruption in the industry with companies now evaluating their location strategies as a wider global footprint is required to facilitate continued operations in case of closure in any one location and this brings flexibility and help companies survive in the toughest business situations.
Contemplating the attractiveness and growth of the business services sector, 7i Capital is focused on the following sub-segments:
We focus mainly on professional staffing which would include companies offering solutions such as IT staffing, accounting, financial, & managerial staffing, recruitment process outsourcing, technical & industrial staffing.
We see BPOs increasingly becoming and behaving like technology companies as technology is increasingly used to deliver services.. The services could include information technology enabled services, knowledge process outsourcing, legal process outsourcing, research process outsourcing, data entry, customer support services, marketing, human resources, and finance & accounting.
Facility services would include companies that take care of EHS (environment, health and safety), fire safety, security services, maintenance, testing & inspections, cleaning services, operations management, business continuity, and space allocation.
The IT services would include companies offering help desk IT services, network security, data storage and management, cloud services, data backup services, IT consulting, repair services, web designing services, social media consulting, and email marketing services.
The consulting industry is huge and the types of professional advisory services that fall into this spectrum are strategy consultancy, management consultancy, operations consultancy, financial advisory consultancy, human resource consultancy.
The transport and logistics sector includes freight forwarders, 3rd and 4th party logistics service providers, trucking, rail freight, sea freight, air freight companies, and courier, express & parcel companies.
The financial services sector includes banks, non-banking finance companies, mortgage finance, microfinance companies, insurance companies, portfolio & wealth management companies, and tax & audit consulting companies.
Abhijeet A. Biswas, CFA