Ananya Pathak
Points of View

Is the current disruption an opportunity for local brands?

As national players deal with supply chain, distribution, and marketing challenges, we ponder whether it's open season for local brands that have the inherent advantage of hyperlocal availability.

The spread of the Corona pandemic has resulted in a lot of uncertainty. Almost everyone, be it marketers, businessmen, or agency heads, is having a hard time to keep the financial wheels of the business running. In these trying times, it is hard to tabulate businesses which may actually be able to grab a better market share, than (in) normal times.

We reached out to industry experts, after one of our employees mentioned that he actually considered buying Kollur Tomato Ketchup (from Mumbai-based Kollur Food Products). It was something he had never done before, until now, because the grocery store near his place ran out of his preferred Kissan Tomato Ketchup, and e-commerce players weren’t delivering on the same day.

So, is this actually a good time to be a local brand? Here’s what marketers and brand consultants think:

Mayank Shah, category head, Parle Products

I think this is a great opportunity for local brands, if they have the efficiency and adaptability. In any other scenario, these local players might as well have to cut down their cost or rise above for higher values to compete. It is, however, not the case today.

Mayank Shah
Mayank Shah

National and international brands are now facing production problem. They are typically following the old service model of providing products in vicinity. There are distribution issues as well – there is lack of labour availability. Consumers are facing problem because of lack of availability of products. In these times, if a local brand can continue production and can have flexibility, they can survive by just making their products available.

Jay Sachdev, manager, marketing, Balaji Wafers

I don’t think that these are good times for local brands to blossom. They neither have the facilities nor the means to accommodate the workers as per the government guidelines. The transportation facilities can also be an issue for them.

Jay Sachdev
Jay Sachdev

However, on the other hand, national brands and MNCs have the means to survive in these hard times. They can afford labourers and have the infrastructure, and keep the manufacturing going.

If smaller brand have the facilities, then they might benefit. What may also work for them is a tie up with e-commerce platforms like BigBasket and Amazon. Reaching the consumer, otherwise, is a task for them. Other than the manufacturing and distribution problems, paying workers without a steady business is also a big 'worry' for local players. Bigger brands have funds to survive these testing times, unlike the local ones.

MG Parameswaran (Ambi), independent brand strategist, and founder, Brand-Building.com

The current situation could be a big boost for local brands if they can get their supply chain up and running. Especially in the FMCG and foods area. Given the relative non-availability of national brands, consumers would be more amenable to try the ones that are available. And if a local brand, say a biscuit or a hand-wash, is agile in its selling and distribution efforts, it can benefit greatly. Unfortunately, many local brands will try and shut down operations. And, they may also have difficulty in getting labour once they restart. In addition, they could also have issues in getting packaging and raw material, and trucks for goods movement.

MG Parameswaran (Ambi)
MG Parameswaran (Ambi)

The bigger companies will be able to organise those elements of the supply chain much better than a local player. But, I still believe if a local player is strong in the local market, a state or a part of it, now is the time for it to get its operation running again. Get the products to the retail shelves, do careful brand investments on television, and ensure that the supply chain does not break down. If a local brand can ensure this, then they have a good chance of making rapid market share gains.

Gurpreet Amrit, CMO, Cremica

The COVID-19 crisis is an unprecedented event. In these tough times, regional companies are rising to the challenge in three distinct ways:

1) They have labour advantage, being localised production.

2) Regulatory convenience is another way they are gaining as they can manage curfew passes and permissions with greater ease.

3) Supply chain is also quicker as they have local production of complete range, instead of sourcing from multiple plants across India. Transportation cycle is also much shorter.

Gurpreet Amrit
Gurpreet Amrit

Consumers and retailers are also more flexible in their brand preference in these times. This can help smaller brands to gain share-of-shelf and generate consumer trials. However, regional players can have long-term advantage, if they are able to execute well in these trying times.