COVID-19 Impact on Major Domestic Cooking Appliances in FMCG Industry
Major domestic cooking appliances refer to portable as well as semi-portable machines which are used in various households’ tasks. The major purpose of using major domestic cooking appliances is the properties that increase the level of convenience and make cooking as well as other related tasks easier. The breakout of coronavirus and shutting down production there has created a lot of ruckus in the entire region. Supply chains were dismantling completely due to which demand was hampered and along with that unavailability of labor and lockdown scenario may hamper the demand of the market across the globe.
Though, the manufacturers are working constantly to stabilize the demand for the major domestic cooking appliances. The overall sentiment has weakened the interest of the consumers in major domestic cooking appliances as the demand for other essential commodities has maximized. The government and other trade associations are trying to maintain the demand level and thus have taken various steps that make equilibrium in the demand as well as supply of the major domestic cooking appliances in the market.
AFTERMATH OF COVID-19 AND GOVERNMENT INITIATIVE TO BOOST THE global MAJOR DOMESTIC COOKING APPLIANCES MARKET
The government has taken various measures to maintain the supply of raw materials for manufactures of major domestic cooking appliances, in particular countries government has launched various schemes to start local manufacturing. Other than this, the government is providing grants, loans, and other financial aids to small and medium-sized enterprises so that they can sustain themselves in the market. For this, the government has decided to extend financial and procedural support to domestic companies to kick start local production. This will help manufacturers in not depending on one supplier but will have a strong supplier portfolio. So in case of any emergency, they will not be impacted much and can continue manufacturing.
STRATEGIC DECISIONS FOR MANUFACTURERS AFTER COVID-19 TO GAIN COMPETITIVE MARKET SHARE
The breakout of coronavirus has shaken the entire world. The pandemic scenario of COVID-19 has impacted to change the entire pattern of consumption and value chain of major domestic cooking appliances. Thus, to maintain the demand and supply various strategic decisions are taken for the manufacturers. The local manufacturers are being supported by the government in getting the raw materials at reasonable rates which started availing at higher prices. This step will help the manufacturers to obtain raw materials at a much lower cost and can save huge amounts of loss incurs to manufacturers. Also, the government of various countries has extended support to small and medium enterprises so that dependence on imports can be reduced, and domestic demand can be catered to domestically.
IMPACT ON PRICE
Due to the breakdown of COVID-19 the entire market experienced shortages of raw material as well as the end, which result in to increase in the prices of such products gradually especially post-May 2019. In various countries where components are imported from China, a price rise was necessary due to short supplies from coronavirus-hit China. Along with that, the production, as well as consumption level, has impacted the overall pricing of the market. So, they have impacted the overall pricing of the major domestic cooking appliances.
Manufacturers are required to qualify a new contract manufacturer (or new manufacturing facility) for the supply of raw materials. Any changes in the third parties for the supply of raw materials, components, and commercialization of products could increase the cost of production and can reduce profit margins.
IMPACT ON DEMAND
Major domestic cooking appliances are considered as a part of kitchen materials. The breakout of COVID-19 has hampered the demand for such goods. In countries such as India, the demand has witnessed a sharp fall as the citizens are facing income crises. Consumers are not opting for any new techniques for cooking after the breakdown of coronavirus. In this way, the demand of the entire appliances market has been impacted.
But in various countries income is not a restraining factor generally. Though it will be unfair to say that the demand has increased with an exponential growth rate as compared to previous years, but has changed by a small margin.
IMPACT ON SUPPLY CHAIN
The supply chain of the major domestic cooking appliances market has been disrupted due to delays in transportation and labor availability. Various countries are facing complete lockdown, logistics constraints are making the delivery of major domestic cooking appliances difficult. Along with that shortages of raw materials which are required to manufacture these items of kitchen materials is also a matter of concern for manufacturers. To avoid this situation governments of various countries are granting transportation permission based on the necessity and requirement to maintain smooth supply in the market and to fulfill the demand mainly from domestic production.
Due to the pandemic, most of the production sites are under lockdown. This has also impacted the market for major domestic cooking appliances. E-commerce services have also been restricted due to the lockdown scenario which delays in delivery of the product to the consumers. It means, customers who are buying the products online are facing issues with the timely delivery of products and thus opting for only necessary items to be ordered online. Thus, the impact on supply is not due to one factor but is facing a hit from manufacturing points.
CONCLUSION
The COVID-19 has affected almost 188 countries across the world, leaving severe backlash on the economy for the next five to six years. The wave of infection will lead to massive disasters in both livelihoods of the population and financial markets. This unfortunate event has led to a disturbance in the availability and the pricing of the major domestic cooking appliances. Along with that due to this pandemic, the expected output of the commodities has been hampered and leads to the demand-supply imbalance. The government is taking steps such as relaxation on tax, fiscal deficit, and others to minimize the impact. Along with that government is also providing various financial benefits to small and medium-sized enterprises to maintain equilibrium in the market.
