Backlash of FMCG industries and it’s key role during the Covid 19 pandemic
The novel coronavirus brought with it challenges that no one was ever ready for. With the advent of the lockdown that brought the world to an immediate stand still, people still could not get a measure of the impact of the pandemic, that would change the fate of their lives forever. Unlike other epidemics like the SARS or Ebola virus, Coronavirus caused widespread damages because of the highly contagious nature of the disease. All the sectors of the economy have faced impairment, let it be the small hucksters, who sell on the streets for a living, big brands who made profits due to their popularity and quality or cinema halls, clubs and pubs. The B2C had a major impact due to the imposing lockdown. The main reason being the decrease in incomes of the people ,as less income means, less of all the things that you want. The demand for cosmetics like sunscreens and different body care lotions decreased because people didn't feel the need of those things in the work from home culture and chose to buy things that were more important for the time being. FMCG is a dynamic sector of economy. In March 2019, there has been 13.2% growth in FMCG companies in India, whereas in March 2020 , the growth rate has been as low as 6.3%. The companies have to be really sensitive towards the demand of the consumers, it has to make constant innovation in order to meet the new consumer preferences as well as keep track with their old consumers. . Having a very less shelf life , the FMCG products has to move fast across producers to final consumers and hence demand from the consumer end is the key factor of this industry. By the advent of Covid-19 , we saw a metamorphosis in the consumer demand. Initially the demand of grocery items went up because of obvious reasons such as panic buying or surplusages. The E-Commerce sites also showed rise in prices, because the regular consumers who liked to shop from the market now switched to online mode. The ayurvedic companies like Patanjali, Himalaya ,Dabur also saw spike in demand for their products like Chawanprash and Giloe. Apart from that ,demand for various vitamin tablets, paracetamols and zinc tablets also grew up rapidly. The demand for masks, sanitizers and home cleaning products like toilet cleaners or floor cleaners increased so much that the quantity of production could not meet the needs of people. Moreover demand for home deliveries increased so much that,the platforms providing them had lack of employees to meet the demands.
The B2B business was also affected due to the closure of workplaces and offices. No doubts that ,there was definitely a supply chain disruption due to the migrant workers heading home. Even in the existing businesses like in e-commerce sites ,people had a new fear of contaminating the deadly coronavirus and for some days the demand in the industry declined as well. Several steps were adopted, like informing the consumers about the body temperature of the delivery agents and their vaccination status to gain trust of their consumers. Apart from that ,the FMCG companies also had a leading responsibility to play during the hard times of pandemic like transportation of essential drugs ,oxygen cylinders, growing demand of masks and sanitizers needed to be produced rapidly. FMCG has also worked as a real warrior in the times of the deadly pandemic.In India ,the share of food and beverages in the FMCG industry is 19 % whereas health and household or personal care has 31 % and 50% respectively but during covid-19 pandemic these numbers very reallly different. The healthcare sector ruled over both food and beverages and personal care categories.
Some of the companies like Hindustan, Britannia, Tata consumer products, ITC ,Marico are among those who took price hikes of 5% to 15% for successive quarters to protect their onus margins. Many companies like Dabur and ITC postponed the launch of their newest products and increased the production of their health care products. The alcohol brands also made stratergies like producing them in the end March so as to cut the transfer fee involved. So due to the change in the customer preferences FMCG companies came out with interesting and noteworthy approaches. Uber India partnered with Big basket to increase the efficiency of their last mile delivery ,even ITC partnered with local delivery people to enhance it's home delivery options. Domino's Pizza shook hands with various companies like ITC, Swiggy, No broker, Mygate , Zomato for the same purpose. As per the new policies of the government the workforce was decreased to 25% which definitely had a further negative impact on the already declining FMCG industry. CEO of Dabur, Mohit Malhotra , reported the shortage of staff in their Ghaziabad, Alwar and Lucknow factories. So, several companies sought the permission to produce only products that are in high spikes. The managing director and CEO of Godrej Consumer Products Limited also declared that the company will only produce sanitizers,soaps and hand washes as they are in high rise demand. Besides it the demand for oil ,wheat ,atta and other groceries also rose because from the data observed, the people who purchased such groceries in every 20 days now preferred to purchase in every 40 days so as to minimalise the social interaction and hence gave rise to demand of those products. FMCG companies after suffering ruptures in the first two waves of the covid-19 pandemic had to catch up in the upcoming months. But this was not the picture. In January 2022, the buyers stayed away from the market which were the crowdest time, for malls, pubs and clubs. But in the succesive months ,due to decrease in the number of cases and the reopening of the institutions the month of March is filled with high expectations. It is high time for the government to provide incentives for the growth of FMCG sector ,as they have played a major role in saving the lives of people during the darkest days of the pandemic and have a huge potential for growth in India. Furthermore, FMCG companies have to constantly build themselves to compensate the losses during pandemic as the crippling of this sector can paralyse the GDP of the nation.
