FMCG companies tuning products to cash-strapped consumers’ means
The makers of cereal, toiletries and other supermarket staples in Bangladesh are increasingly working to reshape their product lines to keep cash-strapped consumers from trading down as the coronavirus pandemic continues to limit economic activities and cut incomes of millions of people.
Some fast-moving consumer goods companies are rolling out new brands at a lower price range and initiating price cuts while others are offering more affordable pack sizes and bundle packs and free deliveries.
"We have already offered economy bundles for some products where prices will be comparatively lower," said Jesmin Zaman, head of marketing of Square Toiletries.
One instance is its offer of baby powder with a pack of diapers.
Square Toiletries sells products under brands such as Senora, Jui, Meril, Revive, Kool, Zerocal, Sepnil, Magic and White Plus.
The company is working on bringing out a cheaper version of its already low-cost sanitary napkin brand Femina.
"We are doing this so that people stay with us even after their reduced purchasing capacity," Zaman said.
Another such initiative to hook customers is Marico Bangladesh's rollout of hand wash and hand sanitiser through the Mediker SafeLife range under a "no profit" commitment for the first six months.
"We have launched it as a commitment to our consumers and society during this period of crisis," said Christabel Randolph, director for legal and corporate affairs of the Bangladesh subsidiary of the Mumbai-based company.
This new range will give some relief to consumers in the situation, she said.
Marico's brands include Parachute Coconut Oil, Parachute Advansed, Hair Code, Saffola Active, Set Wet and Parachute Advansed Body lotion.
Despite the rising prices of raw materials and transportation cost, ACI Consumer Brands says it has refrained from hiking the prices of its products.
"Our consumer products have a thin profit margin, so we have little scope to cut prices," said Syed Alamgir, managing director of ACI Consumer Brands, adding that now they were focusing on service, not profits.
ACI can pride itself for owning several brands that have gone on to become a household name in Bangladesh such as ACI Aerosol, Savlon, ACI Mosquito Coil, ACI Pure Spices and Flour.
The move from the FMCG companies comes as the pandemic continues to shrink consumers' pockets.
A significant number of Bangladeshi households are not working and experiencing meaningful financial pressures.
About 74 per cent of the families have seen a reduction in income because of the coronavirus pandemic, according to a new study of Brac, Data Sense and Unnayan Shamannay.
In the first week of this month, the Asian Development Bank said the coronavirus pandemic would cut 37 lakh jobs in Bangladesh.
One in five among the members of the labour force in Bangladesh were without jobs in April, said Rizwanul Islam, a former special adviser for the employment sector at the International Labour Office in Geneva.
And the future looks equally bleak.
The World Bank has forecast the Bangladesh economy would grow by 2 per cent to 3 per cent this fiscal year and 1.2 per cent to 2.9 per cent in the next fiscal year.
Golden Harvest has introduced new vegetables and packaging in its array of frozen foods to lessen the labour required at home seeing that many might no longer be able to afford domestic house help.
"We have plans to offer our products in bulk quantity so that the price becomes lower," said Rajeeb Samdani, chairman Golden Harvest, whose portfolio ranges from dairy products to frozen foods.
The company is working on a low-profit margin to make the products affordable and bring convenience to people's lives, he said.
"To facilitate consumers during the COVID-19 period, we have introduced free home delivery service through which, for the time being, consumers can buy products at a price lower than the maximum retail price," said Naquib Khan, corporate affairs director of Nestlé Bangladesh, the local operations of the world's biggest packaged foods maker.
This is to help consumers save while continuing to enjoy tasty and nutritious Nestlé products, Khan added.
Nestlé sells products under its world-famous brands such as Nescafe, Maggi and Nido.