Coronavirus: Is Indian FMCG, retail industry heading towards a supply-chain reinvention?

Key Highlights

• Marico and Britannia partner with delivery platforms such as Swiggy, Zomato and Dunzo for distribution
• Metro Cash & Carry starts direct distribution
• Flipkart, BigBasket partner with cab aggregators such as Uber to deliver to consumers

Homegrown FMCG major, Marico, has recently partnered with Zomato and Swiggy to distribute its food portfolio under the Saffola brand. This would include edible oil, oats and virgin coconut oil. Similarly, Britannia Industries has announced its partnership with on-demand e-commerce platform Dunzo to distribute its products. Consumers can get access to Britannia biscuits, cakes and milkshakes by placing their orders in the Britannia Essentials Store on the Dunzo app, and the e-commerce platform promises to pick them up from the nearest Britannia distributor and deliver within an hour.

The coronavirus lockdown has forced FMCG companies to step out of their comfort zones, as manpower shortage and shutting down of stores has brought the traditional distribution mechanism to a grinding halt. "During this unprecedented time, it is critical for us to maintain a continuous supply of our products which are daily staples in millions of Indian households. With a significant rise in demand for at-home delivery, we are happy to leverage Dunzo's innovative and most advanced technology platform, to enable seamless delivery of products every day. Our teams are working round-the-clock to respond to the current situation by innovating ways to get these products to reach homes in a safe manner," says Varun Berry, Managing Director, Britannia Industries.

"As India grapples with the unprecedented global pandemic, it is incumbent on every one of us to come together and extend our support. As one of India's leading consumer companies, we are working towards ensuring the availability and easy access of essential food items to consumers. In an effort towards this, we have partnered with Swiggy and Zomato to provide Saffola and Coco Soul products to individuals' doorstep in a safe manner," adds Sanjay Mishra, COO (India Sales and Bangladesh Business), Marico.

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As the country is preparing itself for the 'new normal' post the COVID-19 lockdown, both FMCG and retail companies are feeling the need to reinvent their existing supply chain and distribution models. While e-commerce companies such as BigBasket and Flipkart have partnered with cab aggregator Uber, to deliver to consumers, cash and carry retailers such as Metro have started direct distribution to their kirana partners. "We had to change our business model in the last few days, we had to ramp up our delivery to the kiranas. The kiranas don't have passes all the time to come to the store, so delivery becomes important. We also have an e-commerce app which has our assortments and prices. The kiranas have started ordering online. Digitisation, earlier, was a nice to do thing, now it's becoming a must," says Arvind Mediratta, CEO, Metro Cash & Carry.

The likes of Unibic, for instance, are looking at partnering with independent supply chain companies such as ShopX, Jumbotail or Udaan. "With traditional distribution coming to a halt we are looking at partnering with third-party supply chain companies which have a strong digital backbone," says Unibic CEO, Srini Vudayagiri.

ShopX CEO, Amit Sharma, says that the app usage in the past couple of weeks has gone up by 70 per cent and there has been a 46 per cent increase in per retailer orders. Is this the beginning of the reinvention of the traditional Indian FMCG supply chain? Experts believe that the coming months would drastically change the way business is done in India.

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