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Year 2020 has bought situations which no one really ever expected go with 19 has changed the face of the world economically politically and socially although the impact of the pandemic is severely felt by the economic sectors the advent of the lockdown has primarily impacted the fmcg sector in india in today's Blog we will throw light on the impact of this global crisis on the fmcg sector Read the Blog till the end to understand how consumer behaviour is changing amid the on-going situation before diving into the impact let us first understand what is the fmcg sector fast moving consumer goods are those products which have a very short shelf life they're fast moving in nature meaning they move through the supply chain quickly from producer to distributor to the final consumer these low priced products are sold quickly because of their high demand like cold drink shampoo or because they are short-lived like dairy products packaged foods the fmcg sector is the fourth largest sector in the economy with three main segments under it these are food and beverages healthcare household and personal care contributing 19 31 and 50 revenue respectively if we talk about the pre-covered era then the fmcg business was already reeling due to global slowdown the Indian fmcg has been witnessing slow growth rates since the past 15 to 18 months in the quarter that ended with march 2020 the fmcg sector grew merely by 6.3 percent in value terms down from 13.2 for the same period in 2019 where january and february saw good numbers compared to the december quarter the lockdown imposed in march resulted in the volume growth of only 0.5 percent fmcg players were already adapting to these changes by way of price cuts offers in the hope of luring consumers and maintaining or increasing their market share with the month of march came the unprecedented corona virus in india it's going to stay for a while and the impact it is having will be everlasting it has established a new normal and we are adapting as well as altering our approach towards life it will permanently affect what and how we buy naturally such reconstruction imparts adverse effect on some businesses while acting as a motivating force for some one of the reasons why the effect of the novel coronavirus will be felt more in the fmcg sector is because this sector is directly driven by people any change in this sector will impact the people at large it is imperative to understand that fmcg requires constant adaptation and innovation to stay relevant and attract new consumers while also retaining existing ones in this ever-changing sector the pandemic has made all these players to draw again on a whiteboard and reframe their strategy the company that is able to grab this opportunity in such an unknown rapidly changing environment and is able to deliver goods to consumers overcoming the logistical challenges will come out on top the supply chain disruption has been a major problem across industries this is due to the reason that the migrant workers started heading home during lockdown it resulted in additional pressure on the manufacturing facility and Spike in cost leaving factories operating at only 30 to 40 percent of the capacity manufacturing and supply chain is facing huge disruption due to the displacement of labourer’s then the grocery retailers initially saw a spike in demand due to panic buying and overstocking they struggled to recharge their inventory due to supply chain disruption the e-commerce companies operating in the grocery segment also saw an initial spike in demand as more people ordered online the fear and panic of the pandemic made them extra cautious about visiting grocery stores established companies like hul daba itc have postponed their product launches specifically in the discretionary product line they've cut their production and put more emphasis on producing products for personal hygiene like sanitizers disinfectants masks they're also working to enhance the supply chain to make it widely available in the market established ayurvedic companies like patanjali himalaya wellness daba also saw a spike in demand for immunity booster products like gilloy chavanprakash and other immunity products in addition to this other products related to vitamin zinc also saw an increase in demand consumer food service is one of the largest industries in india with sales over 4708 billion in indian rupees this industry took the most hit as restaurants and pubs shut down during the lockdown all major tobacco players in response to the lockdown either shut down their production or scale down their capacity more so now the consumers adopting a healthy life is negatively affecting the tobacco and alcohol industry for alcohol in most states there is a fee involved in transferring stock from one financial year ending march to another so they prefer producing at the end of march so as to save cost on transfer fee but due to the lockdown
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they stockpiled negatively impacting their cash flow let us now discuss the changing preferences of consumers that have taken a paradigm shift too there has been a significant change in consumer purchase pattern and fmcg companies are being forced to innovate the consumption basket of the people has changed with personal hygiene products taking the utmost priority and other discretionary products taking a back seat for the time being some of these changes are going to be everlasting and this speaks of how personal hygiene products immunity boosters sanitizers will become the new normal discretionary products like apparels travel luxury footwear electronic have taken the most hit as most of the companies have either scaled down production to the minimum level or halted it completely some of the companies have altered their production and transformed to produce products like masks sanitizers disinfectants etc there has been an increase in demand that enhances hygiene in and around home and workplace products like disinfectant wipe mask home cleaning products like floor cleaner toilet cleaner are in great demand people are going to adopt this healthy lifestyle for a long time shopping pattern is also changing people are buying online and initiative by large players like no contact delivery is fueling this trend people would not want to visit supermarkets regularly and even if they do they'll be buying in large quantities so as not to visit supermarkets regularly finally the firms are left with no option but to adapt to the changing situation they have various tactics to do this post covet companies have redesigned their outreach and have found innovative ways to reach the consumer especially in the essential categories from the fmcg companies in the recent month there has been a lot of news about tie-ups of fmcg companies marico limited has partnered with swiggy and launched a safola store on the latter's platform uber india has partnered with big basket and launched a last mile delivery scheme itc has launched numerous initiatives and patents with local delivery personnel to deliver essential items at the doorstep of the consumer domino's is one of the partners of itc others being swiggy and zamato community centric apps apna complex my gate no broker to enhance the last mile delivery of essential items similarly godraj consumer products limited has tied up with zumato and dunzo it has also partnered with car rental startup zoom car to conclude we can say that the novel corona virus is one unfortunate event that has impacted every person in this world it is one of those rare challenges that affect everyone in the world all together and Covid 19 is one of them it has impacted our lives permanently it has changed our approach towards everything that we do it has established norms for new normal not just for people but for the business as well people and industries who adapt to these changes proactively and realign their approach executed will be the ones who will gain immensely if you like the Blog please share it with your friends and family thank you you