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In-depth: Are local brands eating into share of bigger brands amid pandemic?

Consumer preference saw a huge change amid the Covid outbreak as consumers picked up whatever they could lay their hands on as the supply chain was disrupted and brand promotions took a hit. But did big brands actually suffer? BestMediaInfo.com finds out

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Akanksha Nagar
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In-depth: Are local brands eating into share of bigger brands amid pandemic?

Advertising and promotions have a direct impact on the sales of any brand. But when a brand is compelled to keep the advertising budgets minimal, and with consumers also exposed to multiple choices amid the pandemic, the risk of losing market share is higher.

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BestMediaInfo.com, in conversation with brands that have established a strong foothold in the market over decades, finds out if they have experienced local brands eating into their share during Covid-19, when they were barely advertising.

While minimal advertising wasn’t the only reason for bigger brands to remain absent from the minds of consumers, supply chain issues were a huge challenge amid the lockdown. Local brands with smaller production units near the vicinity of the marketplace arrived as the first option to the consumers.

Sanjana Desai, Executive Director, Mother’s Recipe, said she doesn’t think bigger FMCG brands had seen any drop in their market share.

“There was a war between easy availability and minimal product quality, and trade had to be kept extra engaged by better service and margins. As far as market shares are concerned, the brands that made their product available to consumers, whether it was through the next door kirana store, e-commerce or accessible stand-alone stores, and those who could manage to keep the production supply going, were able to capture larger share of pie,” she added.

The lockdown also saw brand preferences getting diffused and stock freshness and availability creating brand off-takes.

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B Krishna Rao

B Krishna Rao, Senior Category Head, Parle Products, also said they had not witnessed any drop in market share.

“In fact, we have been gaining market share despite the entry of certain players. On the contrary, we have been growing much faster. Most players came to the market in late July and the increased demand that was there in April-May has slightly decreased,” he said.

The confectionery industry too has witnessed a slump but Perfetti Van Melle India gained market share since its decline was lower than that of the category overall.

So, does this mean that brand loyalty for bigger names still existed in the time of crisis?

Rao said, “Though there was a pattern that loyalty was no more a concern for consumers from April till June, but slowly as shelves were getting filled up again, people moved back to their favourite brands. That pattern still exists to an extent and so there is a great opportunity for the underdog to become a favourite brand.”

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Rajesh Ramakrishnan

Rajesh Ramakrishnan, MD, Perfetti Van Melle India, said, “Brand-building is always a long-term proposition. Consumers consume products that fulfil their functional needs and they connect with brands at an emotional level. This is not likely to change. In fact we have observed that consumers become less experimenting and stick to their trusted brands. Brands with a stronger connect are thriving during this period because of the trust they have built over the years.”

He said such brands should stick to the fundamentals, understand consumer needs, offer differentiated products, build strong consumer engagement and drive distribution.

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Jayen Mehta

Jayen Mehta, Sr General Manager (Planning and Marketing), Amul, said, “Several researches have shown that consumers are shifting towards trusted brands. And that is the benefit we are actually getting across categories, across markets. Obviously, there has been an increase in sales.”

However, he said market share growth will be validated once third-party audit data is reported.

Rao said loyalty for any bigger brand only changes when the brand is not available for consumers.

Brands adopted newer ways to connect with consumers. A leading trend is people opting for e-commerce. Another tactic is reaching customers via their closest retail outlet next door, while developing new business models such as associating with Swiggy and Zomato, etc., to serve consumers directly at home.

Info@BestMediaInfo.com

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