“Disruption has opened newer avenues and opportunities”

How do you visualize the impact of coronavirus on the FMCG and consumer durable sector and do you think by 2021 the demand will start reviving?

The FMCG & consumer durable sector is one of the most fundamental sectors and touches many aspects of our lives, right from basic hygiene to high-end brands. During the last few months, we have seen a disruption like never before. And while this disruption has impacted a large part of our lifestyle, it has also opened newer avenues and opportunities.

At Henkel India, we quickly activated channels to engage with the government and other authorities to seek permission to start manufacturing products used by essential goods manufacturers. The Government was also highly supportive and helped to open all the factories, warehouses supporting essential goods manufacturing.

We are very pleased to inform you that not a single customer line stopped due to any supply related issues from our end.

We, in India, do observe that there has been a good demand leading to growth in overall manufacturing measured by PMI, GST collections, and a rise in E-way bills, closing the gaps to pre COVID levels. Basis all of the above, we are confident of a strong demand in India during the year 2021 and beyond.

As a result of restricted economic activity that has cast uncertainty over household finances and future employment, do you think consumers will be more careful while spending on the brands they love?

Our observation is that the COVID-19 pandemic has triggered changes in the way India shops online and has accelerated our shift towards a more digital world. Those who stayed away from online purchases have also been made to switch to online modes by the pandemic. This has resulted in a huge spurt in online shopping. So, we believe consumers will continue to buy their favorite brands but will keep a tab on spends by buying only that is necessary.

Owing to the COVID-19 outbreak, FMCG & consumer goods companies have been facing multiple challenges to get goods to reach consumers. Manufacturing, supply chain breakdowns and labour challenges have been some key issues that the companies have been facing for a long time and this forced organizations to remodel their strategies. Are these strategies short term or long term?

In the first quarter of 2020, i.e. April – June, there was a lockdown which limited the movement of people for the right reasons as we know for all. During this lockdown, many companies had to adapt to the new normal and use alternative channels to reach the consumer. The new normal has made individuals and companies take time to introspect and prepare themselves. When faced with a crisis of this kind, a well thought through, all-encompassing strategy does not generally need remodelling. However, it might require tactical changes.

At Henkel, we have a clear strategic framework for purposeful growth, with some key elements we consistently implement:

  1. Rigorously shape a WINNING PORTFOLIO
  2. Accelerate with impactful INNOVATIONS supported by increased investments
  3. Boost SUSTAINABILITY into a true differentiator
  4. Transform DIGITAL into a customer & consumer value creator
  5. Reshape OPERATING MODELS to be lean, fast & simple
  6. Accelerate CULTURAL JOURNEY with Leadership Commitments at the core

Since we introduced this strategic framework earlier this year, we have been living the aforementioned strategic areas and especially accelerated developments in the areas of digitalization and innovation. There has been a conscious shift to digital, be it sales processes, customer care or other functions. The global pandemic was a great accelerator and booster – to further engage with customers digitally, enhance the use of digital tools, and so on. I would also like to highlight that the way we live our leadership commitments across the organisation, reinforced and acted as strong guiding principles during the COVID-19 phase.

The experiences we have had during this lockdown will ensure the workforce is more resilient and will enable us to emerge stronger and better equipped. In summary, during the lockdown, we prepared our employees to become future ready.

What will the future of work, jobs and careers look like after COVID19?

We are proud of what our teams have been able to achieve despite working remote. So, to that extent, I think that there will be more flexibility given to the workforce. The pandemic has changed the way people work. Video calls and online meets have changed the way we interact and collaborate, and almost everyone has adapted to the new normal. Having said that, certain jobs require the employees to visit the site and some employees are not comfortable working from home. Organizations will need to consider these aspects, creating an open and flexible working environment while planning for the future of work.

We believe that going forward, many roles are going to change with a combination of physical presence at workplace and increasing use of digital and advanced technologies. We want to keep abreast with this trend. That is why we are giving our employees the training to develop skills and competencies they will need to continue to do their jobs well in the future. It is noteworthy that at Henkel, we believe that our leadership culture is important for every employee – not only for those who have personnel responsibility. Everyone should foster entrepreneurial thinking and is some a leader, whether he or she is leading a team or not, each one has the power to change things. We are privileged to have well-defined leadership commitments as mentioned earlier, which guides each one of us to create a modern and inclusive leadership and working culture; thereby, do our jobs better and shape our careers accordingly.

Will rural India revive better than urban India?

The pandemic has seen a strong surge in FMCG sales in rural India. Some believe that it is an indication of growth in the rural economy. While that is a possibility, we also must understand that the pandemic also saw a large exodus of the migrant workforce from cities to rural towns and villages. This too could have contributed to increased demand. Thus, we will have to watch this a little longer to make a well-informed prediction. That said, we are confident the overall demand in the country will increase with equal contribution from urban and rural areas.

What are the 5 things you would suggest brands to adopt to evolve out of this pandemic?

In India, Brand Henkel’s endeavour is to live our global strategy of purposeful growth. Hence, the 5 key areas of focus and the strong synergy it brings to the Indian consumers, as we see, are:

  1. Take the time to relook into the portfolio and offer products that create superior customer and consumer value, such as, supporting consumer convenience.
  2. Sustainability is an important focus for us. We want to strengthen sustainability as a clear competitive differentiator. Every organization can consider multiple opportunity areas of sustainability to add value.
  3. The digitalization wave that received a boost during the pandemic is likely to be trend that will last. There is a need for all brands to embrace digitalization and be available for their customers.
  4. Another key area for industries is operating models that are lean, fast and simple. Such operating models can work with the right flexibility and support strong business growth.
  5. Continue to enable employees to grow with sense of belonging by accelerating the cultural journey underpinned with strong leadership commitments at the core.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members

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