Responses to Covid-19 by firms in FMCG and hospitality industries in India

Abstract

In this study, we aimed to find out the impact of COVID-19 on FMCG and Hospitality Industries, by researching about leading firms in India in these two sectors, through both secondary and primary research. Furthermore, we assessed how these firms have responded strategically, how different functions such as operations, supply chain, marketing, finance, technology etc. have been realigned, and how these firms perceive Covid- as a pandemic with short or long-term impact, as an opportunity or as a threat, and so on. The results show contrasting responses and strategies between firms of the two sectors, while broad alignment within both sectors. For FMCG, we found that the firms having a significant proportion of their portfolio consisting of hygiene based products thrived, whereas those firms which had the out-of-home consumption products in their portfolio suffered. Also, the faster the firms were in restoring their distribution networks, the better their recovery was. The overall strategy was a mix of ‘hibernate’ and ‘reap the benefits’. In most cases, there was no fundamental deviation from the values or objectives. The biggest challenge faced by this sector was the agility in supply chain. The sector also expects to achieve complete normalcy by the end of 2021. For the hospitality sector, the primary objective was ‘survival’. It was found that the bigger hotel chains found it easier to weather the storm by focusing on cost-savings and taking extreme measures for the same. The major bottleneck was the skepticism in consumer minds with respect to travelling, and hence several firms used their properties for alternate purposes and had some degree of pivoting. While the leisure segment is starting to pick up, the business segment is still suffering.