In the auto industry, marketers see new challenges, but also new opportunities too. Says Zak Hollis, brand director of Škoda Auto India: “With many consumers avoiding public transport, we expect them to buy their own personal transport for safety.
But we also believe that many of them will prefer to buy second-hand vehicles as they will be under financial stress and might find it difficult to pay their EMIs for a new car.” Škoda is now talking to insurance companies
which could offer protection on the EMI, for a small premium for a stipulated number of months, in case buyers lose their job or are forced to take a large salary cut. Hollis hopes that this move will ensure the company does not have to downtrade.
His views on the greater use of private cars are endorsed by a Kantar survey across 19 cities, in which 32 per cent of the respondents said they will use their own vehicles — cars or scooters — more. As a corollary, 76 per cent of the respondents said they will either avoid using ride-hailing apps and cabs like Uber
or reduce their use substantially. Social distancing is presenting Uber
with tough challenges. Uber
executives admit that carpooling might be some way off even after the lockdown is lifted. They also have no choice but to rework their product to address safety concerns. There are hints that fares could become more affordable.
“We are aware that price might be a factor. Everyone is going through a tough economic phase so we can hold back some of that,” said Pavan Vaish, head of central operations, Uber India and South Asia.
Uber is experimenting with using a plastic screen dividing the driver from the passenger. It has launched a massive sanitisation programme of its fleets. It is also looking at new business models such as Uber Medics to transport hospital staff and Uber Essential for citizens to travel to earmarked areas cleared by the local authorities through the app. Talks are also on with corporates to offer them Uber fleet to pick up and drop employees.
The shift towards digital platforms during Covid-19 and afterwards is pretty clear, whether for e-commerce, OTT, or education. Says Vivek Gambhir, managing director of Godrej Consumer Products: “FMCG will see structural changes. Earlier, younger people were buying online, now the older generation will accelerate online purchasing. Also, there will be more polarisation in the market with demand rising for sachets and large packs.”
Gambhir says his company has now created a separate business unit focused on e-commerce and is planning to expand its portfolio to include male grooming products, air fresheners, and liquid detergents. Even Škoda is looking to push sales online as much as possible so that consumers don’t have to visit showrooms. It plans to bring in virtual showrooms where the car can be opened and demonstrated and a sales person addresses queries.
With health a paramount concern for consumers, Mohit Malhotra, CEO, Dabur, says permanent changes in consumer behaviour can be expected.
“We are seeing a 30-40 per cent surge in our health and wellness products like chyawanprash , honey, immune boosters, and personal hygiene. For us, it also means we can increase production of hand sanitizers which we entered recently,” said Malhotra.
Food habits will also be affected. “We will be facing a new normal when this crisis is over. ‘Out of home’ experiences may now pave the way for more ‘in home consumption’ moments,” said Nestlé India CMD Suresh Narayanan.
There are bound to be more ‘in
home’ moments given that more people will be working from home. Nestlé has seen Maggi consumption go up and will initiate a recipe service campaign which will help people to cook at home through a platform that will have hundreds of recipes so that they have variety.
In consumer durables, expect downtrading, say experts, as consumers look for cheaper products. Says Avneet Singh Marwah, CEO of Superplastronics, the licensee for Thomson and Kodak TV in India: “TV sales will pick up after lockdown as many have realised its importance during this period. But some consumers might want to spend less and go for smaller models compared to what they might have initially planned.”
This view was endorsed by some mobile device players. “There will certainly be downtrading as we do not think sales will become normal after lockdown at all, until the government offers support to consumers,” said Hari Om Rai, director, Lava Mobiles.