New-age brands in the personal grooming, hygiene, premium packaged foods, and clothing space are expanding their online footprints beyond ecommerce leaders Amazon and BigBasket, moving supply chains from China to India and rejigging product portfolios to focus on health and wellness due to the Covid-19 pandemic.
At least ten brands, including Wow Skin Sciences, PeeBuddy, Timios, Wingreens Farms, Vahdam Teas, Mosaic Wellness, and Turmswear, are also nudging loyal customers to buy directly from their storefronts and social media channels.
“New-age brands have a window of opportunity this year to set up a strong direct-to-consumer channel and build loyalty,” said Revant Bhate, founder of Mosaic Wellness, which raised $10 million from Sequoia, SAIF, and Matrix Partners last year.
Delhivery, which offers end-to-end logistics solutions, also said it had “massively scaled up” with brands over the last month.
These businesses are also actively scouting for new users by listing on hyperlocal delivery channels like Swiggy, Zomato and Dunzo or using offline stores listed on these platforms to expand reach.
Wingeens Farms which sells dips, spreads, and sauces, for instance, has listed on most hyperlocal platforms to expand reach at a time when cooking at home has spurred demand for its products. “Home deliveries are here to stay…our goal is to be visible and available across all channels, online and offline,” said Anju Srivastava, founder, Wingreens.
The move to diversify beyond the top two marketplaces has been triggered by a nearly 60% fall in digital marketing spends and full-stack logistics services available to small businesses.
It is also an outcome of platforms making the sale of limited fast-moving products a priority to streamline their own operations.
“We have tweaked our strategy post Covid-19 and are (also) launching with Swiggy, Zomato, FreshMenu among others,” said Bala Sarda, CEO, Vahdam Teas.
Smaller brands say they cannot afford listing fees and the terms of hyperlocal platforms, and hence are finding their own way. For instance, women’s health brand &Me and beverage brand TLG Company, along with a slew of others, are collaborating to cross-sell products to customers using mailers to build trust in new brands, at a time when some businesses are forced to cut marketing and branding costs.
New launches come to a halt
For most brands Covid-19 has forced them to narrow their product portfolio till production capacity gets back on track and in the meanwhile focus on its fastest-selling items. Vahdam Teas, for instance, plans to double down its top-performing products and has postponed new launches by a few weeks at least, Sarda told ET.
The same is true for personal care brands. Wow Skin Science, which saw sales dip to Rs 2 crore a month in April from Rs 20 crore normally, has also doubled down on production of its Hero product range while keeping new launches on hold.
“Trust is the biggest currency in this market… We have seen a dramatic consumer shifting to trusted brands…The experimental customers have vanished,” said Manish Chowdhary, CEO of Wow Skin Science. Although numbers are on course to hit Rs 12 crore in May, it is still down 50% from business as usual estimates. “As cities open up, business is gradually picking up,” he said.
Reducing China exposure
On the supply chain side, businesses have quickly pivoted to hedge dependence on China.
“We spent time looking at making as many products in India as possible…and reduce the dependence of China – which disrupted business a lot,” said Deep Bajaj, founder, Sirona Hygiene, which sells the PeeBuddy hygiene brand.
Bombay Shaving Company has already moved the manufacturing of its precision razor from China to India, Wow Skin Science has moved part of the production of pumps used in its products to India, while kid food brand Timios is also actively working with suppliers to procure more locally. “Downstream…even our suppliers are looking for India alternatives,” said Aswani Chaitanya, cofounder of Timios.
The growth of these new-age brands in the past few years has been largely fuelled by a rapid expansion of the digital universe, both as a medium of brand engagement as well as for consumer access.
However, with the Covid-19 virus outbreak significantly slowing India’s economy, consumer spending is likely to take a hit. Because of this, brands are also sharply focusing on building features that highlight immunity, health, and hygiene, as they see consumers moving towards such items.
In the apparel space, Turmswear, Fable Street and Wildcraft are also actively focusing on hygiene, making masks, and gears to meet demand.
For instance, Turmswear is working on anti-viral merchandise. “Testing is underway…soon it will be ready,” said Rameswar Misra, its cofounder.
In the beverages space, Vahdam has launched turmeric-first infusions and herbal teas, and in the wellness space, PeeBuddy has introduced some new products.
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