Boonbox, a leading rural assisted e-commerce platform, in partnership with Economix Consulting Group (ECG) has unveiled a research report focussing on the changing consumption behaviours and patterns in rural Tamil Nadu owing to COVID-19. Amongst the various key findings in the report, it is interesting to note that the lockdown has led to changing food consumption patterns across families located in these areas. Owing to the increasing prices and reduced income, residents of Ariyalur, Pudukottai and Madurai cut down their consumption of non-vegetarian food.
The study takes into account insights from 1853 Boonbox® customers across 8 districts (Ariyalur, Kanyakumari, Madurai, Pudukottai, Thanjavur, Thoothukudi, Tirunelveli, Virudhunagar). All respondents of the study are women between the ages of 20 – 67 with household incomes ranging from less than Rs. 1,000 to 50,000 per month.
The project was carried out from Week 2 of Lockdown till Unlock 2.0 (April 1st 2020 to July 20th, 2020) with a majority of the respondents from towns/villages with population less than 50000, thus truly echoing the sentiments of “Rural India”.
Key findings of the study
Trending towards Brand Agnostic: The “New” Rural consumer is brand agnostic in most categories.
- While consumers across rural Tamil Nadu have a high level of brand awareness, a whopping 81% of the respondents across 8 districts are willing to shift to alternate brands as long as they get a price arbitrage.
- The pandemic has caused consumers to put price and immediate availability before the brand.
- Yet, personal careis one segment where consumers continue to display brand loyalty even in these testing times.
- Top 4 districts that emerged highly brand agnostic are: Pudukottai (87%), Thanjavur (86%), Virudhunagar and Thirunelveli (85%).
Insights: Brands today will have to work doubly hard to bring added value to the consumer to retain loyalty. Pricing and distribution play a major role in this, but equally important are product innovation, designing, packaging, and communication.
Shifting Food Habits: Shrinking disposable incomes have led these consumers to change the family’s food habits
- The major item of food to be impacted is the consumption of Non-veg (both meat and eggs), with increasing prices and “unproven stories” contributing to a marked decline in consumption.
- 89% of those respondents in Thanjavur who reported increase in prices of meat and eggs also said that this has led to reduction in consumption (meat – 69% & eggs 60%). Top 3 districts that have reduced overall consumption of food and kitchen essentials (grains/flour, pulses, spices & condiments, cooking masala, cooking oil, sugar, salt, milk, coffee, tea and vegetables): Kanyakumari (90%), Virudhunagar (88%) and Pudukottai (86%).
- Top 3 districts that reduced consumption of non-vegetarian food: Ariyalur (87%), Pudukottai (72%) and Madurai (70%).
Insights: Given that rice is the staple grain in Tamil Nadu and the substantial increase in diabetes in Rural Tamil Nadu (reported to be as high as 13.5% currently from 4.9% in 2006), the significant shift away from a balanced protein-inclusive diet could have serious health implications. This would need to be tracked and if it continues owing to the lingering economic after-effects of the pandemic, this could pose a serious headache to public health officials. Perhaps this is the right time for FMCG companies to look at alternate sources of protein. Soya could be a front-runner in this. In India, Soya chunks has already been gaining popularity among both vegetarians and non-vegetarians.
Omnichannel, the way ahead?: Consumers are now open to buying FMCG products through different, non-traditional channels.
- The pandemic has caused another significant change in “How” rural consumers purchase FMCG products.
- While the traditional and most trusted method of going to physical stores continues to be the preferred channel, consumers are more open to ordering FMCG online or through assisted e-commerce.
- Boonbox witnessed a 100% increase in assisted ecommerce orders between April to June. The no contact door delivery of FMCG products by Boonbox® has been highly appreciated by their customers across 8 districts.
- Top 3 districts that prefer online or assisted e-commerce channels: Thanjavur (100%), Thoothukudi (83%) and Tirunelveli (79%).
- In terms of needs, high in-demand products across 8 districts include: Cooking and Kitchen essentials (90%), Kids needs (health drinks, biscuits, chocolates, snacks, baby bathing products, baby food and diapers) (61%) and female needs (60%).
Insights: This opens up an opportunity for companies to look at Omnichannel to reach rural consumers. While consumers will benefit from the convenience and safety of online purchase and door delivery, Brands can directly connect with and engage their rural consumers.
Opportunity to customize credit offerings: While open to buying FMCG products through non-traditional channels, the consumers are also actively looking for “credit options”
- With the loss of employment and lower household income, many families are finding it difficult to make ends meet, 82% across all 8 districts prefer to buy products from channels that offer credit.
- Top 3 districts that prefer to buy from channels offering credit: Thanjavur (100%), Kanyakumari (95%) and Thoothukudi (84%).
- In the pandemic scenario, the nearby retailers in the villages/towns have also re-calibrated their business and are willing to offer credit. 59% of our respondents across 8 districts mentioned that nearby-retailers offer credit ranging from 1 week to 1 month.
- Top 3 districts opting to shop from nearby stores offering credit options: Ariyalur (72%), Thanjavur (63%) and Pudukottai (60%).
Insights: There is a significant opportunity here for the creation of tailor-made credit products attuned to the need of the consumers across FMCG, consumer durables, and other such product categories.
Job loss owing to COVID: There is an urgent need to provide alternate livelihood options to the rural population.
- Overall, 73% of our respondents from 3 districts (Pudukottai, Thanjavur & Ariyalur) reported an impact on employment owing to COVID-19. This situation has been further compounded with the coming home of the migrant workers.
- Individually, respondents in the 3 districts reported impact as below: Pudukottai (85%), Thanjavur (70%), Ariyalur (68%).
- With lower incomes and mounting pressures to repay loans, 44% of our respondentsacross 8 districts sought livelihood support.
- 52% of respondents across 8 districts sought support for Paying off EMI/Setting-up or Improving their business
- Top 3 districts that need support to repay loans: Virudhunagar (60%), Thanjavur (58%), Thirunelveli (53%).
Insights: The need of the hour is for the Administrators to consider extending monetary support or creating alternate/sustainable livelihood options.
Changing Needs: A significant change in overall consumption patterns was witnessed across different periods of the lockdown
Across all 8 districts, the following trends were observed:
- Steep drop in consumption of cooking and kitchen needs from 75% to 55% between second week of lockdown until Unlock 1
- A visible increase in kids needs from 44% to 53% during the 11thweek of lockdown and subsequently fell to 47% in Unlock 1
- Consumption of female needs also increased from 39% in the second week of lockdown to 55% in Unlock 1
- Decrease in the consumption of OTC drugs from 41% to 25%
Insights: A new trend has emerged, where rural customers now appear to be brand agnostic. In general, customers in Tamil Nadu are very brand aware and brand conscious. Naturally, the significant reduction in household income has led to contraction of food expenditure.
Ramachandran Ramanathan, CEO & Founder of Boonbox said, “The pandemic has completely transformed the way we live today. Individuals world-over have reconfigured their consumption patterns in the past 6 months. However, what interests us the most, is how rural India has responded to this enormous change. Our study with ECG denotes exactly that. Women have always been our target audience in the rural markets, and this report completely takes into account their opinions on the consumption patterns.”