How has COVID-19 impacted different industries – Locus On The Ground March Report

The ripples of COVID-19 are being felt across industries. While some have seen a huge surge in growth, the others have seen a steep decline. Locus, which has clients in industries like E-grocery, E-commerce, 3PL, Retail, Pharma, and FMCG, among others, has come up with a ‘Locus On The Ground March Report’. This report will give our readers a historic view of how things have changed over the past few months (month-on-month) across sectors. This infographic has collated a colossal 151 million orders, across sectors, to arrive at these trends. 

Note: For the purpose of maintaining client confidentiality, all the graphs below have been normalized. 
How to read the graphs: The Y-Axis has been edited to a 0 – 10 scale. For example, in E-grocery, the non-normalized axis could have been, 2 million to 10 million, which has now been normalized to 2 to 10 (Hence each data point represents one-millionth of the original value). 
* These graphs are mere representations of trends we have seen on the ground, not actual data points.

E-Grocery

• E-grocery has seen a 20.12% increase just in March due to the increasing need for home delivery of groceries in these testing times. 
• For a sector that has seen a gradual increase in the past few months, this is indeed a sudden and significant rise in demand. 
• COVID-19 might, in fact, be the epochal moment for this sector with consumers now starting to use it for literally every daily requirement. The sector has captured crucial mind space, even with restrictions and manpower problems.

Expert Opinion

• The E-grocery sector will see the highest sustainable growth moving forward. The March jump is just the beginning.

Retail

• The retail industry has seen a 19.53% fall in March. This can be attributed to the lockdown across geographies and hence a lack of normal movement of goods.
• Moving forward, well-known brand retailers might re-look at their supply chain and re-design it so as to safeguard themselves from unpredictable events like COVID-19. 

Expert Opinion

• Offline retail will continue to fall at least for the foreseeable future. An increasing share of consumers is moving toward online retailers.
• Growth in low-value items will pick up first as consumers will be cautious about spending money. 

E-commerce

• The E-commerce industry witnessed a 23.49% drop in orders in March. E-commerce companies are prioritizing essentials over non-essentials during the COVID-19 situation. 
• After the festival and sale high in October and around the New Year, things have gone downhill for the sector due to the pandemic. If we were to split the data into two equal chunks—October, November, December vs January, February, March—there has been a 21.72% drop in the second half. 
• This situation might very well be the impetus that E-commerce firms needed to bring their daily essentials offerings to the forefront. 

Expert Opinion

• A short term drop of at least 10% until the situation eases up.
• While the supply side of the equation will recover faster, it is the demand that is going to drive the overall movement in this sector.
• While consumers will be cautious with spending, this sector will still pick up faster than Retail.

FMCG

• Though the FMCG sector has had a bumpy month because of lockdowns, it has still managed to grow at an even pace, because essentials goods are a top requirement. It saw a growth of 5.5% in March.
• A portion of this growth can also be attributed to FMCG players having deeper tie-ups with E-commerce players and large format modern retailers for the sale of essentials. This trend is expected to continue even after the COVID-19 situation eases.
• Going forward, large FMCG players might look at optimizing their end-to-end supply chain so as to reduce the impact of such unforeseen events.

Expert Opinion

• There will be increased dynamicity in this sector. A permanent change to dynamic PJP (Permanent Journey Planning) is expected because of a lack of stability and predictability in the demand and supply side of things.
• Heavier reliance on technology and online channels will emerge.

Pharma

• The pharma sector saw an almost flat rate of growth in March. Due to the lockdown, users are looking to order their medicines from online platforms.
• The sector has also had to deal with regulatory issues, both during the lockdown and in the past. 

Expert Opinion

• Increased dependency on India and China for a lot of countries has resulted in a lack of predictability in this sector. The supply side will drive the trends here. 

3PL

• The 3PL industry, as expected, has seen quite a fall in the last month. It has seen a 25.21% fall due to the COVID-19 situation.
• With essentials delivery taking precedence, every other delivery has taken a backseat or has been restricted, thereby resulting in a lull in the sector. 3PL players might look at working more closely with E-commerce and E-grocery players in the near future.

Expert Opinion

• Only time will tell.

Summary

Check out the other months locus on ground reports:

• The Ripple Effects of Lockdown – April Report
• Early Signs of Activity – May Report