Consumption of increased essentials during lockdown due to COVID-19?

Due to the pandemic conditions of spreading Corona disease, Indian Prime Minister Narendra Modi announced the 21-days lockdown over the country. Indians began to swarm like flies at grocery stores all over the country. With more news of further lockdowns, people started hoarding groceries and essential items to prevent coronavirus from reaching their doorsteps. It is interesting to know that the consumption of these items changed drastically at the same night. This pandemic crisis had hit people from all walks of life, which further overburdens the consumption and distribution processes

People began to hoard things up, leading to some stores announcing purchase quantity limits

It is clear to mention that this Coronavirus has lead to increase in sales and consumption of packaged foods, personal and home care products, This led to putting over-pressure on distribution and supply chains since the government had not allowed the movement of cars and trucks over the states to retail points.

Till this day, these crisis hasn’t stopped, and the hoarding and overburdening of the supply chain under increasing demands goes on. Instead, the Government had already claimed that retail and services which are essential including all provisional, health care stores will remain open, there but since there is a huge communication gap between police and government, leading to shutting down off all retail stores. Along with that Government had not declared what essential items are allowed to be sold freely without any hindrance. And hence the police are forced to shut down all factories and shutters of many food brands.

“It is clear that standalone modern trade, which is run by family businesses, is selling a lot more than big-box modern trade. There has been no impact on smaller stores as of March 15. There is increased pressure on manpower, as much as 20 per cent or more, and as the week progresses, more of the workforce is not available to work,” says Lalit Bhise, Co-founder and CEO of Mobisy Technologies.

Mobisy Technologies is a retail tech firm that works with brands to set up their distribution in cities and towns and they have shared data about consumption patterns in cities like Bangalore, Mumbai, Delhi, and Chennai. They have also shared insight on Tier-2 and Tier-3 city consumption.

“This is perhaps the best time for distribution to go digital. Packaged food, personal health, and home care categories will see a surge,” says Lalit.

Many retailers and consumers are now using apps to place orders with distributors and FMCG corporates. Mobisy, for instance, has the Distiman app which enables the wholesaler and retailer to order products real-time and work with the brand to replenish the stock in less than 24 hours.

The current situation

There was no lockdown announced till 23 March 2020, but still the public began to panic when the government began to report an increase in COVID-19 cases in the second week of March leading to sanitizers being sold out.

Sold-out during lockdown

Since all retails items were already out of stock due to panic, overall sales over the March after lockdown declaration went up by 100%. These items mainly consist of baby care items,RTE foods, home and sanitization items seems to be gone out

“There is a fight between retailers and brands. Retailers are able to negotiate with smaller brands and big brands are pushing smaller retailers to stock their product. The top priority as of now is to avoid a stockout. Brands and retailers are now commanding a premium and there is also a fight for the retail space for top selling products,’’ says Lalit.

  He adds, “They are almost in a bullying mode. Brands and retailers are realigning supply chains to cater to key accounts. This is being seen as an opportunity to end the year on a high. They are using this for PR and also permanently change consumer habits and create new categories in mainly personal hygiene.”

Unusual shifts in consumption pattern

Mobisy Technologies had already observed that markets, workers including customers are in a panic mode and having a fear of closing down. Due to this, there is a rapid increase in the adoption of online grocery platforms making their new base for delivering essential goods.

“Taste preferences will kick in and there will be an unfavourable value to volume ratios for national brands like dairy, ready to eat, and masala,” says Lalit.

Technology adoption

“We foresee demand at retail driven by the above factors and not just placements and mainstream above-the-line marketing,” says Lalit.

In the coming generation, most of the brands used to promote their orders in small stores getting digitised. Many FMCG companies tend to focus mostly on digital media for advertising with their targeted audiences through smart TV and OTT

There is a massive increase in the demand for different products and categories. Mobisy predicts the need for app-only retail brands which are needed to thrive in this situation. This helps the retailers to forcibly adopt this technology.

There is a huge boost in online payments using the digital apps for payments and loans which enables the retailer to pay the salesmen through different methods like GPay or Phonepe or PayTM who then pay their distributors, thus creating an increased cashflow and allows retailers to buy more easily in advance.

Brewing breakout during lockdown

All over country, many brewery companies are badly hit by the lockdown in cities and towns.

“Warehouses have been closed and small shops are closed too. Ecommerce is not taking off in this period and we can be affected completely if the COVID-19 crisis continues,” says Manish Chowdhary, Co-founder of Fit&Glow, a company that manufactures and sells personal care products.

Written By,

Mayank Gupta, admin

Student, NIFTEM

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