The outbreak of global pandemic COVID-19 has led to the disruption in the market, especially in sectors such as Travel, Hospitality, Automakers and others. The threatening crisis in public health has led to devour of over three hundred thousand lives on a global level with many more in danger. Not only this, it has put a stoppage on the livelihood and businesses across the globe.
In India, the government has been proactively reacting to the situation and implemented a nationwide lockdown as of 25th March 2020, which was later extended in different phases depending on the level of spread of pandemic. This lockdown aimed at closing the markets, interstate-movement and other activities which would act as a barrier in the social distancing practices. The non-essential consumer goods industry which includes apparel, electronics, kitchen appliances, smart devices among others had been badly hit due to the corona virus pandemic. The entire value chain has been disturbed. The manufacturers are facing the heat in the supply of raw material from China due to which the production has slowed down. The retailers and sellers are not able to receive inventory due to limited interstate movement and low productions. Further, the consumers are also spending cautiously, with focus on necessities such as food and groceries, they are deferring the purchases for high cost items such as electronics. This practice of discretionary spending is expected to be observed throughout the year with diminishing savings and employment uncertainty among consumers amidst this black swan event.
The drinking water which is supplied in households is usually processed by water treatment facilities to filter and disinfect the water before it is supplied in homes. Therefore, the COVID-19 causing virus has not been detected in drinking water. However, the outbreak of virus has led to the widespread health awareness. People have become more concerned about their well being and are focusing on sanitization and adopting healthy practices. They are ensuring everything before consumption is properly cleaned. This has helped in raising awareness about filtering and purifying water before consumption as well.
Disturbance in Supply Chain: China was the epicenter for the COVID 19 pandemic. The first lockdown was imposed in Wuhan in late January, 2020. This put a halt in the Chinese manufacturing industry. This had a deep impact on the India’s water purifier industry. The Indian market imports spare parts and other products in huge quantity from China. The unorganized market imports the complete product or spares, assembles them and sells in the market. This had an impact of production. The regional dealers, distributors and small retailers import a small quantity of product and store it. They focus on not having large inventory as it increases the storage costs. With the nationwide lockdown being implemented the production of companies halted. There was limited interstate movement which led to almost no inventory with small sellers. This impacted the referral sales or direct sales assignments which these sellers were receiving.
Decline in Sales Q1, FY’2020: April and May is considered to be a good period for selling water purifiers as consumers generally purchase other kitchen appliances at this time. The retail and online sales were completely standstill due to the implementation of lockdown for the whole of April and a large part of May. This affected the sales of water purifier badly. Further, the supply chain problems led to a no stock kind of situation in many regions.
Temporary & Long Term Shifts in the Business Practices: The sale of water purifiers started happening in the regions where the restrictions were eased. The sellers focused on clearing the existing inventory. The unorganized market was hit as they were not able to directly pitch the customers. However, the clean drinking water is stated as a basic requirement for good hygiene and health. So, the market is expected to recover fast. The consumers will prefer purchasing the affordable models which have the required water purifying technologies instead of purchasing high end models which have all the technological features.
In long run, the customers will shift towards the online retail and traditional retail will fall down as people will avoid contacting and touching shelf display items as a result of the COVID-19 aftereffects. There will be more demand for community purification especially in high end societies and residential areas. The consumption will move from bottled water to using water purifier in order to ensure the authenticity and purity. The real estate developers will start bundling the water purifier with other pre installed electrical.
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Ankur Gupta, Head Marketing & Communications