The company is creating new plans for the sustenance of its brands 24Seven and Colorbar
The Covid-19 crisis and the subsequent lockdown have forced Modi Enterprises — that owns Modicare, 24Seven convenience stores and Colorbar — to relook at its day-to-day operations. Samir Modi tells Devika Singh that the company is testing doorstep delivery, taking its direct selling model online, and focussing on skincare products, to adapt to the new normal.
How severe will be the impact on Modicare, which follows the direct-selling model, with social distancing becoming the norm?
Initially, our factories and warehouses were shut down and the supply chain was, hence, impacted. We were not able to deliver products to our consultants. We were expecting a growth of 20-25% in the first quarter, but that has been entirely wiped out. However, now we are figuring out a mechanism to deal with the new normal, as this situation is here to stay and reports indicate that there may be several more outbreaks of Covid-19, going ahead.
Our warehouses and factories are open now. We have also moved all our meetings to the web. Our consultants are doing 150 digital meetings a day and educating potential customers about our products. We have essentials like baby care products and food in our portfolio, and for delivery of these products, we have tied up with a logistics partner.
At some places, our employees are also delivering them in compliance with safety and hygiene norms. We were doing deliveries before, too, but it has become an important part of our strategy now. Internally, we have also formed a recovery group to look at our future readiness to deal with this situation. We are also expanding our essentials category by introducing more food items and sanitisation products.
How has the lockdown affected your 24Seven convenience store chain?
Goods have not been coming reaching our stores because of supply chain challenges, and hence we are running at a fill rate of 65%. Only 75 out of our 108 stores are operational; and we are open only from 9 am to 7 pm, instead of round the clock, with fewer staff. Our sales are up in general, but we could have doubled our sales in comparison to pre-Covid times, if we had a better supply of products. We have had to reinvent here too, as the supply of products will remain a challenge going ahead depending on what situation the manufacturers are in. We are test-marketing delivering products in 13 stores, and have also tied up with Swiggy, Zomato and Dunzo for delivery.
Sales of discretionary products have been badly hit by the lockdown, and cosmetics brands could bear the brunt for a long time. Where does that leave Colorbar?
Colorbar has been our most affected brand due to the lockdown. Moving ahead, there will be a cultural shift in this category, and we are preparing for it. We plan to introduce skincare products that have qualities of sanitisation, protection against pollution, etc. We have postponed some of our cosmetics launches, and plan to introduce skincare products early into the market.
People are concerned about their safety and would not like physical make-up tutorials and makeovers in the current situation. Hence, we are figuring out ways to leverage technology for this. We will continue to advertise on digital and rope in bloggers and influencers for video tutorials on make-up. We are also working on ways to sanitise compact powders and lipsticks. However, most of our products are sourced internationally, so that is going to be a major challenge.
Several new start-ups have entered the cosmetics segment lately. What’s your strategy to stand out?
The entry of new players in this segment helps us grow. Of course, they have larger funding from VCs, but our strength is the large network of over 100 exclusive brand outlets in the country. We are well placed from that point of view, and we are not concerned about new brands coming in.
About 15% of our overall business comes from online channels right now and this will only increase. We are leveraging bloggers and influencers on digital media. Besides digital, we are unable to advertise anywhere at this point, so traditional media is ruled out.