India Ltd Chief Executive Officer Mohit Malhotra says these “immunity vans” were rolled out after observing that consumers were facing difficulties in stepping out of their homes to go to the markets and buying its products. “To bridge that need gap, we have been trying out new strategies to ensure uninterrupted supply of essential products to our consumers.”
The company first set up pop-up counters within housing societies, while strictly following the norms of social distancing and personal protection, to give households access to a range of its products. When more consumers reached out to it on social media expressing their inability to move out of their houses during the lockdown, the second phase of the initiative started in the form of the immunity vans.
Malhotra adds the immunity van is the best way to implement social distancing; that plus a mobile app Apni Dukan gives the consumer a chance to touch, feel and experience its products without compromising on her safety.
Dabur’s move is in line with some recommendations — explore direct-to-consumer distribution channels, diversify supply chains and identify alternative suppliers across geographies — in EY’s Covid-19 and Emergence of a New Consumer Products Landscape in India report released last month. For some others, such as Modelez which sells chocolates and cookies among other things, or soft-drinks firms Coca-Cola and Pepsico, it is also an imperative because impulse consumption has dropped significantly.
That has spurred Mondelez India to seek partnerships with tech-enabled delivery platforms like Swiggy, Scootsy, Delhivery and Dunzo.
In the city of Mumbai, where cases of coronavirus
infection rose alarmingly, it partnered with Near.Store which enabled it to reach out to customers via RWA deliveries. On the exclusivity of this arrangement, Parveen Dalal, sales director, Mondelez India, says: “We are targeting about 180 housing societies in Mumbai and servicing close to 22,000 families/households. While this is a starting point for us, we are working towards extending this service in other cities as well.”
Under this, the company does not have to deal with individual customers and instead, all the orders collected from a single housing society residents are delivered together at one go and is then distributed by the RWA. In turn, the customer can minimise the number of delivery persons she comes in contact with.
During the lockdown, the company has also fiddled with models such as direct store deliveries where it takes away one of the cogs in the delivery wheel and services hypermarkets directly or “customer backhauls” where it directly ties up with customers to pick up stocks from Mondelez India depots. The company says such models have proved to be more efficient and safer. Another international confectionery brand Mars Wrigley India has launched a dedicated online brand store “SNICKERS® Store” on the popular online delivery app Swiggy and much like Mondelez, tied up with 30 RWAs through Near.Store, says sales director Ritesh Gauba.
BS recently reported how Coca-Cola India was focussing on driving in-home consumption through new products and by ensuring doorstep availability. BS Strategy reached out to both Coca-Cola and Pepsico
to find out more about their strategies of going beyond the normal channels. A Coca-Cola spokesperson says, “We have created new models based on the current situation to service consumers and customers while staying close to our bottling partners and suppliers”, without specifying what these new models were.
spokesperson says with social distancing becoming a norm, it is imperative for businesses to make their D2C channel more efficient. “For foods, we have tied up with Swiggy and Dunzo
for exclusive Lay’s and Kurkure e-stores and for the beverage category (Pepsi, Dew, Slice, Tropicana, 7UP) we have tied up with Swiggy stores where we ensure availability of our products on demand and delivery within two hours.”
Another category where Pepsico
has a presence in is packaged drinking water (brand: Aquafina). To achieve what the company describes “exponentially greater reach”, it has tied up with micro-delivery platform OwO. “With OwO, access to multistoreyed, large residential societies is faster, thereby helping us increase awareness and consumption. Our research has shown that consumers prefer dealing with such apps as they find it convenient,” says the spokesperson.
Agrees Anjana Ghosh, director of marketing and business development, at Bisleri International, that has also tied up with the same start-up: “Hyperlocal delivery platforms have a very defined and focused supply chain framework. They help address any demand-supply gaps in the market and often enable last-mile delivery in areas where there are no established distribution networks.”
Besides these two, OwO, which started last month, has Parle Agro's Bailley, Coca Cola’s Kinley, Patanjali’s Divyajal, on board. It started with water delivery across Gurugram and plans to expand its operations to Delhi NCR followed by Mumbai, Hyderabad, Ahmedabad, Pune, Bangalore, Chennai over the next one year.
Says Ajay Channgani, CEO, OwO Technologies, “The other e-commerce platforms, including many that failed, work with a marketplace model. Ours is an inventory-led model where we don’t deliver a bunch of different articles looking at a certain route. At the moment we only deliver water — we promise the consumer a particular time and deliver precisely then. Water and milk are categories where one cannot wait and because we buy stocks from the companies
and deliver to the customer through our own trained staff, the multiplicity of channels via third party deliveries is completely ruled out.”
Most brands say these models are there to stay. Despite the gradual easing of the restrictions and the country entering an “unlock” phase, Dabur’s Malhotra says that the company intends to continue with the van initiative for some time.
But can D2C make a serious dent to the traditional supply channels? “If you look at the unpredictability of the operating conditions, D2C will continue for a while. Also for food FMCGs, the fall in sales is not because of demand drying up but due to supply chain disruptions. So to try and fulfill the latent need which is there for the consumer is an 'opportunistic' model. Whether it takes a bigger share of the overall distribution pie will come down to each company and the kind of products it is selling and how the execution goes for them because there is a cost that goes into maintaining a DTC system. So in the short-term it is fine; in the long-term, they might look at rolling these back,” says Devangshu Dutta, chief executive officer of retail consultancy Third Eyesight.