A boon for rural residents

CHENNAI: From carving out office space at home, developing new safety and sanitation habits to a shift in our sleeping patterns, COVID-19 has changed the way institutions work. Boonbox, an assisted, rural e-commerce company, decided to pivot its business model and shift from selling household goods to essential services, enabling them to provide rural regions with FMCG goods, medicines, sanitation and basic home essentials.

The company, in partnership with Economix Consulting Group (ECG) recently unveiled a research report focussing on the changing consumer behaviours and patterns in rural Tamil Nadu owing to the pandemic. R Ramanathan, CEO and co-founder Boonbox, and Latha Ramanathan of ECG, share some insights and observations from the market study. Excerpts follow.

What have the challenges and takeaways been since the shift?
The key takeaways are that customers look forward to convenience in the form of home delivery and subscription models. Also, they are open to private labels and alternate brands. The challenges have all
been related to sourcing and availability. 

What kind of ideation went behind repurposing the business model? How vital was this paradigm shift for
the business and consumers during the lockdown?
The idea was to get into a category that is a bellwether, without seasonality, or being overly dependent on the economy, and to get into items of daily consumption. This has resulted in  Boonbox adding an important category to its catalogue for the future. Consumers were delighted with the quality of the products, and now demand more variety.

The report projects that the pandemic has caused consumers to put price and immediate availability before the brand. Can you elaborate on the nature of these brands? What does this mean for existing brands? Respondents appear to be brand-agnostic across all categories like kitchen essentials, kids’ essentials and home care essentials except personal care and baby products. Brands today will have to work doubly hard to bring added value to the consumer to retain loyalty. Pricing and distribution play a major role in this, but equally important are product innovation (possibly smaller sized packs), designing, packaging, and communication. As long as supply disruptions remain, it is likely that consumers would prefer to use easily available brands, whether these are locally produced or even lesser-known brands.

According to the report, shrinking incomes have been directly proportional to the consumption of non-vegetarian food and purchase of other kitchen essentials. How will this affect the health of those in rural areas? What alternatives can be chalked?
Given that rice is the staple grain in Tamil Nadu and the substantial increase in diabetes in rural Tamil Nadu (reported to be as high as 13.5 per cent currently from 4.9 per cent in 2006), the significant shift away from a balanced proteininclusive diet could have serious health implications. This would need to be tracked and if it continues, owing to the lingering economic after-effects of the pandemic, this could pose a serious headache to public health officials. Perhaps this is the right time for FMCG companies to look at alternate sources of protein. Soya could be a front-runner in this — soya chunks have already been gaining popularity among both vegetarians and non-vegetarians.

Studies show that Indian women are genetically burdened with lower bone mass, and this is often compensated for with a protein-rich diet. Since most respondents were women, has this change (in dietary habits) impacted the lifestyle and health?
While the respondents spoke about reduced consumption, they did not talk about health effects. Clearly, the reduction in protein consumption will be compensated through increased consumption of carbohydrates. This is a matter of concern and can only be addressed through a concerted effort by public health authorities. The PDS could be an effective conduit to supply products enhanced with vitamins and also soya products, at subsidised rates.

How have retailers recalibrated their business? How can a credit-model be made feasible in such times?
Retailers in small towns have access to some form of credit. With an increased focus on rural markets, brands are likely to offer more credit in future. Another option is the financing of kirana shops by NBFCs.

In an earlier interview, you had mentioned that the company was in the market for approximately $20
million in funding – plans for which were shelved. How has the company been working in terms of raising short-term funds? Are investors willing to invest?
The company is currently in talks for strategic investment. Investors are willing to invest, but largely in specific areas of e-commerce.

What does this overall change in consumption attitude mean to e-commerce and businesses in other verticals?
Clearly, e-commerce companies have gained, with customer behaviour veering towards home delivery. Convenience and price will be the differentiators.

What are Boonbox’s plans for 2021?
FY’21 will be about consolidation while we will look to set the platform for growth in the subsequent year. We will focus on going deeper in the locations where we already are.

For the study

• The study took into account insights from 1,853 Boonbox customers across eight districts —Ariyalur, Kanyakumari, Madurai, Pudukottai, Thanjavur, Thoothukudi, Tirunelveli, Virudhunagar.
• All respondents of the study were women between the ages of 20 to 67 with household incomes ranging from less than Rs 1,000 to Rs 50,000 per month.
• A majority of the respondents were from towns/villages with a population of less than 50,000.