Fri. Mar 29th, 2024

Several companies from the Fast Moving consumer goods (FMCG) sector, like Dabur, Proctor & Gamble, Hindustan Unilever, ITC, Mondelez and Colgate, have started satisfying consumer needs by directly delivering to their homes. This move is meant to circumvent traditional retailer and distributor network in areas deemed as hotspots, during this COVID-19 pandemic.

These companies are partnering up with start-ups that have pre-existing delivery networks like Dunzo, Scootsy and Swiggy. They are listing their own name-brands as grocery stores, in the start-ups’ web portals. They are even reaching out to various Resident Welfare Associations (RWAs) through their salespeople.

This Direct-to-home initiative by FMCG Companies doesn’t set any overall precedent for this sector.Traditional retailer chains have been doing the same, for more than a month now, to maintain social-distancing norms after consumers began loading their pantry aggressively.

Some Companies like ITC Ltd. were already trying to sell products through their own web portals, before taking this initiative. B Sumant, executive director at ITC, spoke about this collaboration, saying,”These partnerships are a vindication of the power of collaboration as no brand alone has answers to fulfil the needs of the nation during these unprecedented times.”

Supply chains ecosystems, throughout India, have been thrown into disarray with the nationwide lockdown in effect from March 25. Companies have been struggling with staff shortages as migrant labours continue leaving their jobs to be closer to home. Unforeseen challenges are thus cropping up throughout the logistics of sourcing raw materials to manufacturing and delivery of finished products.

Dabur has associated with several e-delivery vendors along with “reaching out to RWAs across the country and ensuring” the availability of their products said Mohit Malhotra, CEO of the company. He further added, “We are deploying new strategies and finding innovative solutions to ensure uninterrupted supply of essential products our consumers.”

These FMCG companies are setting up their own store-fronts on delivery platforms of various scales. They are servicing customers through exclusive brand storages that are linked with the distribution centres of their delivery partners.

Food delivery company, Swiggy, has utilized its pre-existing network alongside expansions, to more than 200 cities. As a result, any customer, on the platform, is able to order groceries from its neighbourhood shops.

“Through these partnerships, we are extending our hyperlocal delivery offering to unlock a new dimension of convenience for our consumers as well as earnings for our delivery partners,” said a Swiggy spokesperson. “Considering the present situation, our primary focus has been to address customer needs and pain points and their biggest ask has been to enable easy access to groceries and essentials.”

However, both parties are unsure of the long-term viability of this novel initiative. FMCG companies are also apprehensive about its repercussions on the ecosystem of distributors and traders that they traditionally depend on to move the products, they manufacture and promote.

“We will continue to evaluate and expand such opportunities with our partners to serve our consumers during this difficult time,” explained a P&G spokesperson. “In addition, we continue to make interventions to strengthen our end to end supply chain to serve consumers with our products across different channels.”

These hyperlocal delivery partners are, as a matter of fact, able to bridge the gap of supply and demand between FMCG companies and consumers, during these times of crisis.

“Dunzo ensures demand density for these brands, and as long as we are able to maintain that, brands should continue to leverage the on-demand experience of Dunzo,” stated Kartik Mishra, Head of strategy and new initiatives at the startup. “Direct to consumer (D2C) just becomes an additional distribution channel for brands in addition to traditional retail and e-commerce that they already have.”

Industry experts feel that customers will try to seek out vendors that sell different products over sticking to one label for all their products. This mentality might lead to low tractions on these digital store-fronts, once the dust settles. ” While we have cut out retailers from the equation now, we will have to wait and watch if these partnerships continue post the pandemic,” said an executive at a hyperlocal delivery startup. “If demand drops post the lifting of the lockdown, neither us nor the brands might want to continue these partnerships.”

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