The outbreak of pandemic and the ensuing lockdown across the world have shaken the very foundation of the retail industry. Even post unlocking, brands are feeling the heat, mostly due to altered consumer behaviour.
“Due to the rapid spread of COVID-19, some markets have taken extreme measures to protect their populations by issuing widespread quarantines, halting manufacturing and disrupting supply chains. And even in the markets that haven’t taken such severe measures, demand has been disrupted due to consumer precautions. Globally, there is likely to be an impact on product and brand choices being made at the checkout due to these changes. And this impact may break longtime purchase habits irreversibly,” reads a Nielsen report titled ‘COVID-19 Concerns are a Likely Tipping Point for Local Brand Growth’.
“In recent years, consumers have generally displayed strong preferences for local dairy and fresh produce brands and products versus those coming from further afield. Amidst the ongoing COVID-19 crisis, anxieties around origins of products and ingredients are likely to fuel increased demand for even more local sourcing,” the report further read.
Impact of the Pandemic on Local Brands
While the pandemic has been generally disastrous for the retail industry the world over, it has, surprisingly had a very positive impact on homegrown brands. While the initial months were tough for all, post Unlock 1.0, the demand for homegrown brands has increased significantly in keeping with the Prime Minister’s clarion call of ‘vocal for local’.
Bala Sarda, Founder and CEO, Vahdam Teas said, “Fortunately, COVID-19 has impacted our brand positively. With the increase in online sales and essential groceries, demand has been high. We’re seeing a lot of new consumers who are trying our products. We have been offering a wide range of immunity boosting Turmeric Teas blended with other superfoods like Ashwagandha, Moringa, Ginger etc. They come blended with black pepper which increases the absorption of turmeric in the body.”
Mayank Gupta, Founder & CEO, To Be Honest (TBH), a healthy snacks brand, agrees, saying, “Demand for TBH products increased due to the functional health benefits they off er as compared to other products from competitors. Secondary and tertiary demand from retail stores remained high without any BTL activity, showcasing brand value. We saw a 400 percent increase in revenue from online channels between February to June 2020.”
The Smooth Functioning of Supply Chain
Many domestic brands took multiple steps during the lockdown period to ensure smooth functioning of their supply chain. TBH used a combination of logistics partners like Porter, Dehlivery, DTDC to ensure interstate transfers of stock. The brand also did last mile deliveries in person rather than relying on distributors.
“We managed to deal with the situation head on. 95 percent of our revenue comes from outside India and strict lockdowns were not enforced there. In comparison to other brands, we were well prepared for this and sent our shipments to global warehouses via air to ensure that we didn’t stock out at any point and that orders were fulfilled. The supply chain at home here in India was bit of a challenge and orders were slightly delayed. We were running at 20 percent capacity then but now, we are running at almost 90 percent capacity,” added Sarda.
Another Indian brand, sanitary pad brand, Paree, has also doubled up its customer base in certain markets. “Paree has a robust and well-connected distribution network and we supported our on-ground team in regrouping and worked even harder to ensure the products reach the market in a timely manner, without any delay. Today, over 15 lakh women trust the brand,” said Sahil Dharia, CEO & Founder, Paree.
Changing Consumer Sentiments
Consumer behaviour is settling into a new normal, as people everywhere learn to live with the reality of COVID-19. According to the Nielsen report, “Consumers need to be reassured. More than ever, shoppers want to understand the supply chain,with complete transparency from farm to factory to distribution, and they want details of the measures being taken to assure their safety.”
“Consumer sentiments have definitely changed due to COVID-19. Consumers want to buy origin-based products, trusted and authentic products and inclined towards products that boost their immunity. In order to match expectations and the current situation, we’ve launched a range of Immunity boosting Green Tea and Turmeric Tea bundles and also an exclusive range of ‘Organic Turmeric Latte Mixes’ which has received excellent feedback from our customers,” Sarda asserted.
In the new normal world, there’s also a heightened emphasis on maintaining and upkeep of hygiene. “Awareness of hygiene has increased after the pandemic and in general the willingness to spend on items of personal hygiene has also gone up,” stated Dharia.
Inclination Towards Indian Brands
There’s definitely increased conversation towards supporting Indian brands. The main idea behind being vocal for local is to support brands which understand their consumers way better than any foreign company.
“Absolutely, there is an inclination towards Indian brands post the outbreak of pandemic and for two major reasons:
– Vocal for Local – With this, we are going to see a plethora of Indian brands rise up and also get acceptance from the consumers.
– Origin Based Products – Secondly, consumers want to buy origin based, trusted and authentic products,” Sarda said.
However, Gupta has a different opinion. He feels that sales of Indian products have gone up as supply of imported products was hampered during these times and Indian brands got a good opportunity to increase their shelf space in the retail stores.
“We even saw demand from international markets increase for our products. We have already got orders from Qatar, Dubai and Singapore,” Gupta added.
What Lies Ahead
Homegrown brands are optimistic about the future and are looking forward to expanding their product reach. However, they are careful to make short-term goals for now.
“Paree manufactures premium hygienic sanitary pads, but we plan to expand and widen our market as we will soon be adding other personal hygiene products to our portfolio. We are in the process of expanding our product portfolio by adding baby diapers very soon,” said Dharia.
“In terms of launches, we are focusing on products that cater to the need of the hour for our consumers. Times are very uncertain right now to plan way ahead and we do not want to block inventory or investments. We need to go by what is in demand right now,” added Sarda.
“Our future product launches will be a mix of fruits, lentils and vegetables. This will help us in offering holistic nutrients and minerals. Also, we will be starting a kids range in the future. We are also expanding in exports market and see that as a huge opportunity,” concluded Gupta.