Diversified Modi Enterprises is expecting a “massive drop in profits” of its cosmetic brand Colorbar due to the coronavirus lockdown, while direct selling business Modicare and retail chain store 24Seven have also been affected, a top company official said.
According to a PTI report: The over US$ 1.5 billion group, which has interests in sectors like agro products, chemicals, tobacco, pan masala, mouth fresheners, confectionary, retail and cosmetics, has put its expansion plans on hold and is observing the COVID-19 situation.
“We are in the midst of a dynamic state of affairs currently. All we can and must do is closely observe and assess future course of action. As of now, our expansion plans are on hold,” Samir Modi, Managing Director, Modi Enterprises told PTI.
Asked about the impact of the coronavirus pandemic lockdown on his company, he told PTI, “We have been hit by something unprecedented and it will continue to impact us for some time to come. All in all, there is disruption in pretty much every business but in the present context of things and in the interest of our community, we must accept and move on.”
“Some immediate disruption was felt intensely at Colorbar and to some extent at 24Seven and Modicare Limited. Colorbar is undergoing an obvious massive drop in profits, out of the three businesses,” he added, but did not give figures.
Modicare, being a direct selling business, also faced challenges due to curbs on movement of people, he said, but added that its direct sellers have moved to digital platforms like Facebook, YouTube and Zoom.
“Even for 24Seven, the restrictions aren’t making business easy but we are managing to run it from 7 am-7 pm as opposed to its original premise of 24×7 availability,” Modi told PTI.
During the lockdown period, the company witnessed customer demand patterns “changing dramatically,” he further told PTI.
Modi expects adoption of technology for purchases among Indian consumers to speed up further.
“In the new normal, we have to find innovative ways to deal with the requirements and challenges of the business, consumer demands, and of course the necessities of our people too,” he told PTI.
Talking about the manpower crisis faced by the industry during lockdown, he said group companies like 24Seven leveraged adoption of technology to bring more efficiency in operations with a leaner workforce.
Asked if the company plans to tie-up with any e-commerce platform, Modi told PTI, “We do not have any plans to partner with any existing e-commerce platforms. In fact, it poses a conflict of interest for our consultants (direct sellers) and our business model. If our products are available on e-commerce platforms, it impacts our consultants’ earning opportunity.”
“60-65 percent of our business even before the lockdown was essential products. During the lockdown, with the increase in the demand for essential products, our sales shot up in April,” he told PTI.
“Modicare business will only get accelerated as the lockdown opens up as this business is all about earning opportunity and ours is sort of an e-commerce business driven by advocacy,” he further told PTI.