SnapBizz, a major player in smart technologies for Kirana stores has released a report outlining FMCG consumer buying patterns from across India in the light of the COVID-19 pandemic. According to the report, there was a major spike in sales in Mid-March as an indication of panic buying that took place followed by a low spell till Easter weekend, post which, sales have improved. The study also found a decline in the number of Kirana stores operating ever since the lockdown took effect for various reasons.
The study analysed over 1.7 million consumer bills recorded in the SnapBizz network of Kirana stores spreads across 7 cities which include Delhi NCR, Mumbai, Pune, Ahmedabad, Bangalore, Chennai and Hyderabad. SnapBizz is currently backed by marquee VCs such as Jungle Ventures, Taurus, Blume Ventures and strategic investors such as Nielsen, Qualcomm, AUO and Mr. Ratan Tata and has raised in excess of USD 12 million over Seed and Series A round.
Prem Kumar, Founder & CEO said, “We have been collecting basket level data every day, and constantly monitoring trends on SKU’s/ brands/ categories amongst Kirana stores and sharing these insights with brands. With most FMCG sales currently happening out of Kirana stores, these insights go a long way in helping companies understand what is happening with their brands and competition. This data will also help them address supply issues and re-assure their distributors, retailers and customers on their continued presence in the market. In this current time of lockdown, we have been witnessing the steady and continued operations of the local Kirana stores. They have been trying their best to keep their stores open, selling whatever they have been supplied with at best prices without taking advantage of the situation. They have made brave attempts at ensuring that their customers are able to buy what they need, even if sometimes those options are not the same ones the customers may have been used to before. A lot of them also do home deliveries till midnight. They continue their good customer service, showing huge resilience and the ability to adapt to the ever-changing and trying circumstances.”
The report gives an in-depth analysis into the entire food and beverage category and the impact that COVID has had on its selling pattern, availability and pricing.
Highlights of the Study-
Supply chain function has seen a major shift: There is a huge shift in the way supply chain in traditional trade functions:
- Before Lockdown: The FMCG brands/ distributors used to chase the retailers to supply more goods and the retailers used to chase the consumers to sell the goods to them
- During lockdown: Now, the consumers are chasing the retailers for supplies. And the retailers are chasing the distributors /brands for replenishments
Decline in number of Kirana stores operating: Since the lockdown started, we have seen, on a daily basis, only around a third of our Kirana stores operating. Across a week, about 60% of them are active. The stores are not being opened due to the following reasons
- Interference from police
- Lack of staff or
- Lack of supplies
Increased consumer spends at Kirana stores: There has been a steep increase in sales of essentials in Kirana stores. Our data shows that there was a steep increase in sales (by 30%) per consumer from mid-March onwards and further rose by another 30% by end March. But in the past few weeks, we have seen a slight drop in spends per consumer even though it is still high (40% more than usual). Some of the reasons for the increased spend per customer include
- Panic/advanced buying
- More people staying/cooking at home (thereby pushing food sales up)
- More premium products being pushed by retailers due to more availability and/or more margins
No over-billing at Kirana stores: We studied over 1 million transactions across 94 categories in Kirana stores that are billing actively during the lockdown situation and there was not even a single instance of Kirana stores selling above MRP. Out of these 1 million transactions before lockdown, around 50% of the items were sold below MRP while during lockdown only around 38% items were sold under MRP.
Products Trade-offs by consumers: By observing the bills being generating at Kirana stores, we have noticed that consumers are now making huge trade-offs in the following ways:
- Essentials v/s Non-Essentials: There has been a huge increase in the sales of essentials at Kirana stores – particularly in the food category. There was an increase in purchases as well as advanced buying across the staple’s category and also in the snack’s category
- Regional/Local brands v/s National brands: We have seen the consumers shifting towards regional/local/unbranded essentials especially in food categories. This is taking place due to (a) high availability of regional/local brands v/s national brands at the stores (b) retailers pushing customers to go for regional/local brands due to higher margins offered by these products. With this, we are seeing that lesser known brands are capturing market share at the expense of well-known bigger brands. This is leading to more trials of new products which is otherwise not happening in the normal course.
- Premium products v/s non-premium: In certain categories, we have noticed that people are going for more premium products as opposed to regular products. This was noticed in biscuits, snacks, bread/baked goods and cooking oil – a function of children being at home / availability / retailer push.
SnapBizz is currently working closely with FMCG brands, distributors, wholesalers, E-commerce players (B2B/B2C), Financial Service players and Kirana stores to help bridge the communication gap by finding solutions based on the results of these reports. This analysis will also help Kirana stores better deal with their consumer requirements.