Rise of India's D2C sector increases demand for Corrugated Boxes by 200 pc
Rise of India's D2C sector increases demand for Corrugated Boxes by 200 pc

India’s rapidly rising Direct-To-Consumer (D2C) sector has made a positive impact on the packaging industry as the demand for corrugated (shaped into folds) boxes has increased by 200 percent.

In fact, YOY demand for scrap boxes grew by 200 percent, laminated boxes by 700 percent, die cut boxes by 540 percent, vegetable boxes by 200 percent, UN approved boxes by 75 percent, and chick boxes by 122 percent, according to JD Mart, a B2B platform from Just Dial. 
Prasun Kumar, CMO, Just Dial, said: “The rise in demand in corrugated boxes on JD Mart is in line with the growing fortunes of the D2C sector. The corrugated boxes industry is estimated to be around Rs.30,000 crore and it is our earnest effort to aggregate the supply online through JD Mart.  We are already witnessing a huge demand across key centres and JD Mart as a platform will help supply meet this demand in a seamless way.”

JD mart data

For scrap boxes, Delhi and Pune were the two cities that saw maximum demand. Among Tier-II cities, Vadodara and Jaipur were the two centres that saw good traction for scrap boxes. Pune topped the demand for laminated boxes followed by Mumbai in the second place. For die cut boxes, Mumbai generated maximum demand across India with Pune and Delhi in the second and third place respectively.
Also, for vegetable boxes, Delhi topped the city with maximum demand followed by Ahmedabad and Pune. Bangalore was the leading city when it came to generating maximum demand for chick boxes and for UN approved boxes Mumbai topped the demand.

This rise in demand has been augmented by the explosion of D2C brands in fashion, cosmetics, consumer electronics and food. These new-age digital-first brands are now challenging legacy brands by adopting a D2C route and engage directly with the growing numbers of digital shoppers. As per industry estimates, India’s D2C industry is expected to touch $100 billion by 2025 from $33.1 billion in 2020.

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Consumer Durables Makers Revenue Rise 20 pc This Fiscal
Consumer Durables Makers Revenue Rise 20 pc This Fiscal

India's consumer durables sector is set to report a robust 20 percent revenue growth this fiscal after a flattish run last fiscal. 

Revenue of electrical appliances makers is expected to grow twice as fast as white goods makers, forming 65 percent of the sectoral revenues this fiscal (which traditionally is only 35 percent of the sectoral revenue), as per a report by analytics firm Crisil.

However, the operating profitability is expected to be a tad lower due to costlier inputs despite price hikes, though, adding credit profiles will be stable on healthy revenue accruals and low leverage.

the Rs 2 lakh-crore sector includes consumer electricals (excluding mobile phones) and white goods. White goods include washing machines, televisions, refrigerators, and air conditioners while consumer electricals include fans, kitchen and cooking appliances, and lighting products among others.

During and after the pandemic, consumer durables makers have recovered faster than other consumer discretionary sectors such as apparel and jewelry, driven by higher demand for home-improvement products during the prolonged stay-at-home period.

The growth momentum of the white goods industry is expected to accelerate this fiscal on positive consumer sentiment, upgrading, and higher realizations. Consumer electricals will continue to outshine with 23-24 percent revenue growth this fiscal, compared to 14-15 percent for white goods, riding on factors like shorter replacement cycle, necessity, and smaller ticket size, the report further stated.

Despite higher revenue, the sectoral margins are expected to moderate by 100-150 basis points this fiscal on the spike in input cost. Prices of key commodities like copper, aluminum, and polypropylene which constitute 70 percent of the raw materials for the sector) though have stabilized, they are still 30 percent higher than the average price in the past two fiscals.

Experts believe the impact on profitability will vary due to lower price hikes. Consumer electrical makers have hiked prices by 8-10 percent this fiscal, much more than the average 3-4 percent by white goods makers.


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Pandemic Has Made Consumers Rethink Environment, Waste And Health
Pandemic Has Made Consumers Rethink Environment, Waste And Health

The pandemic has reinforced the value consumers place on the factors like environment, waste and wealth. The personal, economic and environmental fragility experienced during the global pandemic has created a shift from “concern to active caretaking”.

Worries about the environment are very strong, with pollution and plastic litter in the ocean as the joint top worry (83 percent) and global warming closely follows, cited by over three quarters (78 percent) of consumers across nine countries. This sits ahead of food waste (77 percent) and food accessibility (71 percent). Meanwhile, nearly half (49 percent) of the global population are now recognising the impact that everyday choices have on the environment, as per data shared by Tetra Pak (India). 

Praneeth Tripurari, Marketing Director, Tetra Pak (South Asia) said, “Traditional ‘back-to-basics' values like home cooking, family meals, and reducing waste are increasing. The pandemic has strengthened responsible consumption as a significant trend, with greater demand for action throughout society. Interestingly, in India, we’re seeing an aggressive shift toward a more holistic approach, with health and wellness emerging as a means of remaining safe and resilient.”

Over 60 percent of global respondents say they are cooking at home more and 20 percent expect to continue to do so post-pandemic – especially younger age groups. Moreover, globally speaking, more than half of global respondents this year say they are increasingly choosing products that support the immune system, rising to around two-thirds in Nigeria (68 percent), India (67 percent) and South Africa (65 percent).

“UN has already designated the 2020s as a "Decade of Action," highlighting the need of taking action now to prevent further damage. The food systems throughout the globe, we think, must be transformed to fulfil societal demands while also increasing food security and decreasing the strain on natural resources at the same time,” Tripurari said. “Therefore, we want to concentrate on three critical areas: expanding access to safe and nutritious food, decreasing waste and food loss, and developing value chains with more sustainability,” 

Climate change in the post-pandemic economic recovery has also become a bigger concern that before – rising significantly higher in emerging markets, notably India (81 percent) and China (80 percent). Apparently, what is clearly here to stay is that consumers are taking actions in their own lives to build a more sustainable future and expecting companies to do the same. – as well as helping them in this mission.


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Britannia Net Porfit Grows 20% For Q3
Britannia Net Porfit Grows 20% For Q3

Food major Britannia Industries Ltd have raised a net profit of Rs 264 crore for the third quarter of 2017-18, making 20 per cent annual growth from Rs 220 crore in the same period year ago.

In a regulatory filing on the BSE, the city-based company said consolidated total income for the quarter under review grew annually 9 per cent to Rs 2,603 crore from Rs 2.393 crore in the like period year ago.

Sequentially, however, net profit and revenue growth were flat (1.2 per cent and 0.3 per cent) from Rs 261 crore and Rs 2,596 crore last quarter.

Britannia Managing Director Varun Berry in a statement said, "We had 15 per cent growth in the domestic market for the quarter owing to double-digit volume growth on the back of investment in brands and widening distribution network.”

The company's international business, however, continued to grow slower due to deteriorating geo-political situation and volatile currency in Africa and the Gulf region.

Berry admitted, "Though dairy business growth was subdued, profitability improved on driving products with high margin and reducing our play in the less profitable commoditised categories."

On the commodity front, prices of key raw material were stable during the quarter.

Berry added, "We have progressed well in building superior factories. Our greenfield factories at Guwahati and a dedicated facility for servicing export markets at Mundra (Gujarat) are nearing completion for operating them soon.”

The company's blue-chip scrip of Rs 2 face value gained Rs 131.70 when trading ended on the BSE to close at Rs 4,766.55 per share as against Friday's price of Rs 4,634.85 and opening price of Rs 4,697 and a high of Rs 4,789.95 crore and low of Rs 4,697 during the intra-day session.


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