The pandemic came to India in the 1st quarter of 2020 and led the country towards a major slowdown. It still continues to impact most industries at an unprecedented scale globally, including consumer products (CP) that has witnessed significant disruption over the past few months. Amidst widespread health concerns, travel restrictions and local movement limitations, several companies in India are already feeling the heat. The crisis is impacting some categories more than others. Essentials (staples, packaged food, home and hygiene products) are less impacted, while economic concerns have reduced spending on discretionary goods like confectionery and appliances. The demand for alcoholic drinks and carbonated beverages declined due to restrictions on the on-premise consumption due to lockdown. The impact was strong and the main reason behind it was not just the lockdown but the changes in consumer behaviour. According to the EY survey, the consumer behaviour in India changed radically due to COVID-19 with 60 percent of buyers in the country believing that the pandemic would alter the way they shop. Another survey revealed that 76 percent of the respondents in India (62 percent globally) said that the economic impact of COVID-19 has made them more likely to track their spending. Another reason that limited the spending of consumers and declined the demand of sales in the space.

However, the situation is now changing. Its end of the October already and people are now aware of the consequences of coronavirus. Though the festive season is near, consumers are also gearing-up for festive shopping. In this scenario, the online platforms and e-Commerce companies are playing a major role in the recovery of the damage done by the pandemic in the nation. The arrival of the festive season has offered the much-needed cheer to the COVID-hit shopper items business, with retail gross sales within the 10-day Navratri to Dussehra interval not solely topping final year’s numbers however registering robust double-digit progress indicators that appear to point the start of a revival within the economic system and shopper confidence. Even as macro numbers point to continued distress in the economy, some of the high-frequency indicators such as auto sales, air traffic, toll collection and rail freight loadings have revived hopes of recovery adding to the festive season cheers.

A Slow but a Needed Shift

The Indian consumer products sector was in flux. The industry also witnessed demand pressure (especially from rural consumers) due to Agri-slowdown, liquidity crunch and employment challenges. However now a piece of good news floats for the sector as with monsoon rainfall remaining above normal this year, Kharif harvest is expected to be bountiful further supporting the rural consumption. The combination of pent up demand, the anticipation of festive demand, and the natural improvement in demand is the reason that has raised the expectation of making the final quarter of 2020 a better one in terms of growth of the nation.

While YoY number for various sectors continue to be muted, the month-on-month sales figures for passenger vehicles and two-wheelers, air passenger traffic and rail freight among others have shown an upward trend. Domestic sales of passenger vehicles in August was 2,15,916 units (excluding BMW, Mercedes, Tata Motors and Volvo Auto) as compared to 1,82,779 in the previous month. In June, sales count of passenger vehicles was 1,05,617 units, as per data compiled by Society of Indian Automobile Manufacturers (SIAM). Two-wheeler sales also reported sharp recovery during this period. The total two-wheeler sales in August was 15,59,665 as compared to 12,81,354 in July. Weeks before the festive season begins, many automakers have reported a jump in sales for the month of September. Car market leader Maruti Suzuki led the growth reporting 34 percent YoY jump to 147,912 units in September. Factory-gate shipments for Hyundai Motor India was also in high double-digit of 23.6 percent at 50,313 units in September. Analysts have attributed the rise in sales to pent-up demand and low base effect.

How was the Navratri-Dusherra Festive Sale?

In the Navratri-Dusherra 10 days festive sale season has witnessed quite a good business. Earlier the demand was almost palpable within the vehicle business, which had contracted 18 percent final fiscal. Maruti, which controls practically half of the market, is known to have retailed a large 95,000 models within the 10-day interval, not solely making a document throughout such troubled instances however even registering over 20 percent progress over the final year. The corporate’s robust line-up of hatchbacks and entry-level vehicles contributed a lot of the volumes, with private mobility getting a leg-up owing to wariness and restrictions about public transport. Maruti’s rivals corresponding to Hyundai and Kia noticed equally robust demand. Whereas numbers for Kia Motors have been exceptionally excessive (over 200 percent at retail of over 11,000 models) because it added a brand new mannequin to its lineup not too long ago, Hyundai too retailed over 28,000 models on robust demand for its set of Creta and Venue off-roaders. Two-wheeler corporations corresponding to Hero Moto and Honda Bikes and Scooter India additionally noticed robust demand, although the businesses are nonetheless to share precise volumes and progress charges.

On the consumer electronics facet, smartphones which is usually the strongest class within the phase continued to witness robust numbers with new launches and heavy competitors between gamers corresponding to Samsung, Apple, One Plus, Xiaomi and Oppo. Enabled by on-line channels, Samsung’s smartphone volumes have been 50 percent greater than what it bought within the Navratri-Dussehra interval final year. On the TV facet, it was not simply LG that noticed robust traction in demand. Samsung, Sony and Philips all had double-digit progress in demand, particularly for the big display screen sizes.

Looking at the demand and supply, the festive session has raised a firm hope in the mind of the leading business players. Organizations like Maruti, Hyundai, Samsung, LG, Sony and even luxurious retailers like Mercedes-Benz and Dyson are maintaining hope that the constructive begin to ‘one of the crucial gross sales durations’ would strengthen additional because the nation now strikes in direction of Diwali.

Statistics According to e-Commerce Business

The Navratri-Dusherra festive sale amongst with the upcoming Diwali, Christmas and New Year sale can be the life saviour for the CP market players. The depth of the aforementioned statement can be realized by looking at the data concluded after the Navratri-Dusherra festive sale. According to data from Redseer Consulting, in this sale, e-Commerce organizations such as Walmart-owned Flipkart and Amazon have sold goods worth nearly $4.1 billion (Rs. 29,000 crore) in the first week of festive season sales, compared to $2.7 billion in 2019. The report also stated that smartphones continued to be the biggest category, accounting for 47 percent of the overall gross merchandise value (GMV), followed by electronics and home appliances, as demand for work-from-home products surged, said the market research and advisory firm. The change in consumer behaviour due to the early year situations can be seen in this report as the report states that the rise in sales comes on the back of new customers, as well as large numbers of shoppers from smaller cities turning online, as offline retail continues to reel from the impact of the pandemic. Nearly 52 million shoppers flocked on e-Commerce websites in the first week of festive sales with 57 percent, or 31 million customers coming from smaller cities and towns. The reverse migration of metro customers to smaller cities fuelled demand from these towns, as total metro shoppers dipped from 30 percent in 2019 to 25 percent in the first week of the 2020 festive sale. Though the average consumer spending has dropped marginally this year to Rs. 5,500 from Rs. 6,800 last year, it is expected that the spending will be balanced in the upcoming sales.

According to the report, apart from the automobile and consumer electronics space the fashion category also saw a revival this festive season, accounting for 14 percent of overall GMV versus 17 percent during the last festive season sale, even though formal wear and ethnic party wear was impacted as people worked from home.

Government’s Initiatives

According to the data accumulated from the previous years’ sales, India usually witnesses 50 percent of its total sales in consumer durables in the months of August to December, which is during the festival season. This year the nation faced huge disturbance due to pandemic which also impacted the consumer confidence, but to mitigate the effect and to boost the demand during the festival season, the Indian government has planned various ideas along with stimulus. According to the sources, the Indian government has been mulling ideas like Urban MNREGA, infrastructure push, tax relief measures like relaxation in Leave Travel Allowance, cash backs and consumption vouchers to spur demand. Implementation of these ideas will definitely give a huge boost and help the CP sector to return in the track.

Conclusion

This pandemic is a trigger for companies to invest in advanced analytics to understand the changing business environment and respond with agility. COVID-19 is a reminder to the CP industry about the fragility in ways of doing business. It will be a game-changer for companies that will focus on evolving business models and transformational change with new and emerging technology. Working towards the change while analyzing the new consumer demands and implementing suitable ways to attain customer satisfaction, starting from this festive season will be a great way of developing and thriving in the industry.