MITTAL SCHOOL OF BUSINESS

ACADEMIC TASK -1

Course Code: ECOM531

Course Title: Managerial Economics I
Course Instructor: Nadeem Ahmad Bhat Section: Q2140

Academic Task No.: 1

Date of Submission: 07/05/22

DATE OF ALLOTMENT: 28/04/22

Student Names – Dudepala Chandra Shekar Reddy, Jobin Pinheiro, Mahima Manikpuri,
Adarsh Pradhan

Evaluation Parameters:

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Learning outcome: Thinking analytically and correlate microeconomics
concepts with real life issues.

Declarations: We declare that this Assignment is our individual work. We have

not copied it from any other students’ work or from any other source except where
due acknowledgement is made explicitly in the text, nor has any part been written
for us by any other person

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TABLE OF CONTENTS-

1.Introduction 05-06

2.Market Size 07-08

3. Data Analysis 09-11

4. Impact on demand & supply 12-14

5. Practical Application 15-16

6. Risk and regulatory changes 15-17

7. Conclusion 18-20

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Evaluator’s comments (For Instructor’s use only)

General Observation Suggestion for The best part of the

Improvement assignment

Evaluator’s Signature and Date:

Marks Obtained: Max Marks:

PEER RATING

NAME ROLL NUMBER PEER RATING

Dudepala Chandra shekar RQ2140B38 10
Reddy
Jobin Pinheiro RQ2140B45 10
Mahima Manikpuri RQ2140B46
10
Adarsh Pradhan RQ2140B58 10

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IMPACT OF COVID -19 ON DEMAND AND SUPPLY OF HAND SANITIZERS-

INTRODUCTION

Hand sanitizing items are aesthetic and anti-infectant skin care solutions specifically made
to clean and protect the palms and fingers from disease causing bacteria and viruses.
Growing awareness regarding hygiene and cleanliness practices among people is enhancing
the demand for skin sanitizer products across the globe. Manufacturers are keenly focusing
on incorporating the New Year benefit ingredients such as aloe Vera tea oil and others into
the disinfectant solution to provide more protective hygiene solutions.
The global demand for hand sanitizers has risen dramatically because of the Coronavirus,
Covid-19, outbreak. As a result, demand for personal hygiene goods such as hand soap,
soaps, tissue papers, and sanitizers has increased over the world. To meet the rapid surge in
demand, the big CPG companies are ramping up production and improving their supply
chains. Consumers are becoming increasingly conscious of the use of hand sanitizers as a
result of the global pandemic, Covid-19, which broke out in December 2019. To fulfil
worldwide demand, many FMCG businesses are building up their hand sanitizer production
lines. Furthermore, businesses are raising awareness through public awareness campaigns
on the right use of health and hygiene products. On the outset of the Covid-19 problem, for
example, the Unilever Group is selling its hand sanitizers in national media, internet
marketing campaigns, and other precautionary measures.
In order to meet the enormous demand for hand sanitizers, several large corporations that are
not in the hand sanitizers market are also going into the production of sanitizers.

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The impact of the COVID-19 has impacted consumer behavior and prompted consumers to
practice personal hygiene precautions. The Indian government has released a number of
guidelines to help people understand the need of proper hand hygiene. The increased
awareness of hand hygiene has created multiple growth prospects for market players, and
hand sanitizers have become a necessary household item.
In INDIA there is a new entry. According to Nelson India, the size of the category reached Rs
43 crore in March from Rs 10 crore a year ago, as the highly contagious pathogens and
rapidly describe the Wall Street total of 150 to new manufacturers started making sanitizer in
March commanding 61 percent and 46 percent value share, the researchers said without
naming the brands.
Market share of the top three brands Dettol from racket India limited live boy from Hindustan
Unilever limited and pure hands by Himalaya drug company private limited from 85% in
January and February while no vaccines available get for the new virus in India
Following factors are likely to contribute to the growth of hand sanitizers-
 The Internet's Growing Influence on End-User Purchasing Behavior.
 Demand for flavored and organic hand sanitizers is increasing.
 Promotional Activities Have Increased
 Consumers are becoming more health conscious.

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MARKET SIZE –
The global hand sanitizer market was valued at USD 6.02 billion in2021, with a compound
annual growth rate (CAGR) of 6.8% predicted from 2022 to 2026.

SEGMENTATION-
The demand for alcohol-based hand sanitizers is at an all-time high since they are more
effective at keeping germs protection
In 2019, the alcohol-based sanitizer market was worth USD 82.8.07 million, accounting
for roughly 64% of the hands sanitizer industry.

Type of Sanitizer Hand Sanitizer Market

Alcohol Based Sanitizer 64%
Alcohol Free Sanitizer 36%

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 Hand Sanitizer Market

36%

64%

Alcohal Based Sanitizer Alcohal Free Sanitizer

More exhibiting significant traction due to the impact of covid-19 outbreak-

 hand sanitizer
 soaps
 hand wash
 handkerchief
 tissue paper
 surface disinfectant

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MARKET GROWTH-
Companies are always attempting to implement personal care product innovations in order to
attract customer purchases and expand their market reach. The addition of fragrance-effective
chemicals to various skincare categories is an example of innovation, as it raises customer
awareness of the cleansing products' efficiency. Uncertain environmental circumstances, such
as wetness and heavy rain, are also predicted to have an impact on the quality of skincare
products and limit demand.

REPORT ATTRIBUTE DETAILS

Market size value in 2022 USD 6.49 billion
Revenue Forecast in 2030 USD 10.84 billion
Growth Rate CAGR of 6.8% from 2022 to 2030
Base year for estimation 2021
Historical data 2017-2020
Forecast period 2022-2030
Historical data Revenue in USD million and CAGR from
2022 to 2030

IMPACT ON DEMAND – SUDDEN SPIKE IN DEMAND AS THE VIRUS GOES GLOBAL

 Due to an increase in the number of cases of covid-19, the hit of Covid 19 has had a
significant influence on the operations of several key players.
 As the virus has spread rapidly over the world, individuals have begun to panic
and use hand sanitizer as a precaution. The US Centres for Disease Control and
Prevention recommends using an alcohol-based hand sanitizer to prevent the virus
from spreading, but washing with soap and water is a superior defence.

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  According to estimates, the Y-O-Y increase in hand sanitizer demand in the UK was
over 250 percent and over 1800 percent in Italy as of February 2020, while the M-O-
M increase in the US between December 2019 and January 2020 was over 13
percent, and Indian manufacturers saw a business or ten-fold increase in demand
between February 2020 and February 2021.
IMPACT OF SUPPLY CHAIN- Retailers set buying

limits due to a temporary shortage.

 In anticipation of growing demand, the biggest hand sanitizer producers have

increased output since January 2020. However, in recent days, there has been a huge
increase in demand, and the majority of merchants and pharmacist stores have run out
of stock.
 The suppliers are now at capacity and are attempting to increase capacity as soon
as feasible by utilising third-party manufacturers and other small-scale suppliers.
 Suppliers are keeping a tight eye on the market and raising their inventory levels in
preparation for any unexpected demand spikes.
 The retail and internet channels are seeing greater demand, with Chinese consumers
dominating the online sales channel.
 Consumers are buying in huge numbers in anticipation of shortages, causing the
majority of retail channel stores to run out of stock. In order to serve as many people
as possible, certain businesses in the UK and the US have limited the maximum
number of purchases per client to two.

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IMPACT ON PRICE-In internet platforms, third- party sellers raise pricing-

 Third-party retailers selling major brands on internet marketplaces such as

Amazon and eBay have increased their pricing.

 An internet merchant is selling Deffendall hand gel, which is sold in the UK for
£3.49 in retail outlets, for £109.99 on Amazon.
 However, none of the manufacturers have changed their prices, therefore we do not
expect a retail price hike.

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CONSUMER ARE SHIFTING TOWARDS ALTERNATIVE PRODUCTS-

 Most consumers around the world have been experiencing a shortage of hand sanitizer
for the past few days, so they are turning to alternative products like soaps and hand
washes to prevent the covid-19 outbreak.
 According to the Centers for Disease Control and Prevention (CDC), washing hands
and soap and water for 20 seconds can prevent the spread of infection, so the ability
of excessive alternative product is expected to impact the new generation from the
hand sanitizer market.

IMPACT ON DEMAND AND SUPPLY

After the outbreak of covid19 has tremendously impact on hand sanitizers. The demand of
hand sanitizers suddenly raised in several countries like India, Spain, Italy, America, China
etc.as the spreading of fastly, people started to buy sanitizers through globally. After the
outbreak of covid19 has tremendously impact on hand sanitizers. The demand of hand
sanitizers suddenly spikes in several countries like India, Spain, Italy, America, China etc.as
it spreading as fatly, people started to buy sanitizers through globally. The impact of COVID-
19 on the hand sanitizer industry is projected to be significant, given the growing demand for
the product around the world. According to Nielsen India, the category grew to Rs 43 crore in
March from Rs 10 crore a year earlier, as the highly contagious disease spread quickly
despite the world's harshest lockdown. According to the report, 152 new producers began
producing sanitizers in March, commanding a 61 percent market share and a 46 percent value
share. The top three brands — Reckitt Benckiser India Ltd.'s Dettol, Hindustan Unilever
Ltd.'s Lifebuoy, and Himalaya Drug Company Pvt. Ltd.'s Pure Hands — all have increased
their market share. While no vaccine for the new coronavirus has been developed, hand
washing with sanitizers containing at least 60% alcohol is thought to be an effective strategy
to prevent the infection, which has infected over 3 million people worldwide and over 42,000
in India. Sanitizer demand increased to 87 percent on April 10-14, up from 58 percent in
March 17-19, according to Nielsen. This all means that the demand of the sanitizers increases
in the covid time and parallelly the supply also increases. The rapid spike in demand for hand
sanitizers in recent months has caused most merchants and chemist stores to run out of stock.
Furthermore, most other manufacturing companies are working overtime to make this
product and meet client demand in order to meet the shortfall needs. In April 2020, for
example, John Distilleries, an Indian whiskey producer, announced the development of
alcohol-based hand sanitizers to address a shortage of the product. Similarly, NIVEA India, a
renowned skincare company in India, has begun to use this component in the production of
hand sanitizers to combat the Covid 19 virus.

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Increase demand of hand sanitizers

Increase of supply of hand sanitizers

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The hand sanitizer is increased, causing the demand curve to shift to the right. The shift to
the right has caused both an increase in the equilibrium price and quantity demanded.

HAND SANITIZERS AS MARKET DRIVERS

The global hand sanitizer market has fast growth in the past year owing to the outbreak of the
coronavirus. Many government authorities as well as public health organizations have been
promoting the benefits offered by the usage of the products in the global hand sanitizer
market. The COVID-19 pandemic has importance of washing hands as a simple and efficient
solution to stop the spreading of the virus. Various health organizations across the world have
promoted using hand sanitizers as one of the most important and primary protocols for
stopping the virus from spreading, along with social distancing norms. Products in the global
hand sanitizer market present a cost-effective and portable solution for the increased
requirement for hand washing and cleaning on the go. Numerous governments around the
world have also launched various initiatives for promoting the adoption of hand sanitizers
during the pandemic.
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MARKET RISK OF HAND SANITIZERS

Many brands from several industries forayed into the hand sanitizer market, owing to the
increasing need for sanitizers, created by the coronavirus pandemic. As multiple market
players are setting their foot in the global hand sanitizer market, the rise in competition has
led to many different varieties and innovations in hand sanitizers as well as aggressive
promotional activities to attract potential customers. Improved quality of hand sanitizers and
their vast variety are driving the growth of the domestic and internet

onal hand.

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REGULATORY CHANGES ON HAND SANITIZERS DURING PANDEMIC

As COVID-19 began to spread, demand for hand sanitizer quickly outstripped supply. To fill
the gap, companies as diverse as distillers, parfumiers, and even automotive industry
suppliers, began to make hand sanitizer.
Even before the pandemic, the EPA had a policy that allowed claims against emerging viral
pathogens, provided the product met set efficacy tests. Registrants and sellers on the EPA’s
list cannot claim on the product’s label that it is effective against COVID-19, but they can
state they are on this list. Therefore, in effect, they are demonstrating the EPA considers this
product to be effective against SARS-CoV-2 and COVID-19. Traditional manufacturers'
supply of alcohol-based hand sanitizer has increased, and most consumers and healthcare
workers no longer have trouble finding them. As a result, the FDA has withdrawn three
guidance documents that were first issued in March 2020 and outlined temporary policies for
manufacturers who were not drug manufacturers prior to the public health emergency to
produce certain alcohol-based hand sanitizers and alcohol for use in hand sanitizers.
Under the temporary restrictions, companies that manufacture alcohol-based hand sanitizers
and alcohol for use in alcohol-based hand sanitizers must stop producing these items by
December 31, 2021. Manufacturers cannot sell or distribute alcohol-based hand sanitizers
made before or on December 31, 2021 and produced under the temporary guidances after
March 31, 2022. Furthermore, after March 31, 2022, manufacturers shall not employ ethanol
manufactured under the temporary restrictions to make a completed alcohol-based hand
sanitizer product

SUPPLY CHAIN OF HAND SANITIZERS IN COVID19

Hand sanitizer sales jumped 470% the first week of March 2020. Ethanol is also used for
liquor, cleaning products, the medical industry, personal care products, hairspray, cologne
and, yes, hand sanitizer. Hand sanitizer is made with 60%- 95% ethyl alcohol or isopropanol
alcohol. But raw material supply wasn’t the

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issue leading to hand sanitizer shortages. Producing ethanol for hand sanitizer requires
additional processing beyond manufacturing fuel-grade ethanol.
Manufacturers need to install more distillation columns or other purification processes to
meet the required level of quality.

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CONCLUSION & ECONOMIC IMPLICATIONS

A hand sanitizer, often known as a hand rub, is an antiseptic solution that is applied to the
hands to kill disease-causing bacteria. It's made up of alcohol, water, emollients,
polyacrylates, artificial and natural colours, and perfumes, and comes in foam, gel, and liquid
forms. Isopropanol and ethanol, which are found in hand sanitizers, rapidly denature proteins
and remove lipid-based coverings on certain viruses and bacteria.
As per our research we have firstly observed that the global demand for hand sanitizers has
drastically increased due to the Covid 19 outbreak in 2019.The key companies in the India
hand sanitizers are ITC Limited, Dabur India ltd, Hindustan Unilever limited, The Himalaya
Drug company , Reckitt Benckiser ltd, Godrej Consumer Products ltd, etc.
Henceforth, demand for personal hygiene goods such as hand soap, soaps, tissue papers, and
sanitizers also has increased over the world. In order to meet the rapid surge in demand, the
big CPG companies are ramping up production and improving their supply chains.
Consumers are becoming increasingly conscious of the use of hand sanitizers. In order to
meet the enormous demand for hand sanitizers, several large corporations that are not in the
hand sanitizers market are also going into the production of sanitizers.
The factors that has positively uplifted the growth of hand sanitizers worldwide can be
supportive government initiative boosting personal hygiene awareness, rising demand for
natural hand sanitizer, technology innovations to drive the hand sanitizer market growth.
Manufacturers are keenly focusing on incorporating the newer benefitting ingredients such as
aloe Vera tea oil and others into the disinfectant solution to provide more protective hygiene
solutions. Additionally, companies focus. Developing various skin wash form such as foam,
gel, liquid and sprays to attract consumers to these products. Prominent company associated
with skin cleansing accessories such as Unilever, PNG, another use merger and acquisition
strategies, as well as television and Internet. Marketing strategies for brand building and
business expansion purposes
The number of cases of Covid-19 has had a significant influence on the operations of
several key players. The Indian Centres for Disease Control and Prevention recommends
using an alcohol-based hand sanitizer to prevent the virus from spreading, but washing with
soap and water is a superior defence. The suppliers are now at capacity and are attempting
to increase capacity as soon as feasible.
There has been a huge increase in demand for hand sanitizer, and the majority of merchants
and pharmacist stores have run out of stock. The suppliers are now at capacity and are
attempting to increase capacity as soon as feasible. Some businesses in the UK and US have
limited the maximum number of purchases per client to two.
People are turning to alternative products like soaps and hand washes to prevent the covid-19
outbreak. According to the Centres for Disease Control and Prevention (CDC), washing
hands and soap and water for 20 seconds can prevent the spread of infection, so a shortage of
sanitizer is expected to impact the market.

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Because of the coronavirus pandemic, the worldwide hand sanitizer industry has seen rapid
expansion in the last year. The COVID-19 pandemic emphasises the significance of
handwashing as a simple and effective way to prevent the virus from spreading. During the
pandemic, several governments around the world have started numerous campaigns to
promote the use of hand sanitizers. Demand for hand sanitizer immediately outstripped
supplies as COVID-19 spread. Sanitizers were developed to fill the void by industries as
diverse as distillers, parfumiers, and even automotive suppliers. The Environmental
Protection Agency (EPA) had a policy that authorised claims against developing viral
diseases.
Hand sanitizer sales increased by 470 percent in the first week of March 2020. The problem
wasn't a lack of raw materials, but rather the processing steps required to make fuel-grade
ethanol. To attain the required quality, manufacturers will need to construct more distillation
columns or other purification procedures.

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LATEST TREND AND GROWTH FORECAST

Sustainable personal hygiene is a prominent trend.

Nowadays consumer are shifting towards personal hygiene items made up of sustainable and
herbal ingredients, such as aloe Vera , ocinum sanctum, and others to avoid skin rashes from
the alcoholic hygiene items. Additionally, the increasing preference of people. Towards
organic personal care products such as naturally made washers and cleansers is creating for
the demand for skin rub in the organic segment. Besides this growth growing Internet
penetration worldwide, coupled with the development of the ecommerce industry create
opportunities for small businesses to expand their brand reach.

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REFERENCES
1. The National Center for Biotechnology Information is part of the United
States National Library of Medicine, a branch of the National Institutes of
Health. https://www.ncbi.nlm.nih.gov/books/NBK143995/
2. Hand Sanitizer Market Size, Share & Trends Analysis Report By Product
(Gel, Foam), By Distribution Channel (Hypermarket & Supermarket,
Drugstore), By Region, And Segment Forecasts, 2022 – 2031 Published Date:
Apr, 2022 https://www.grandviewresearch.com/industry-analysis/hand-
sanitizer-market
3. The impact of COVID-19 on hand sanitizer market is expected to be on a strong foot
fold as there is an increasing demand for the product across the globe.
4. https://www.fortunebusinessinsights.com/impact-of-covid-19-on-hand-sanitizer-
market- 102719
5. coronavirus (COVID-19) lockdown impact on hand sanitizer pricing across India as
of March 31, 2020 https://www.statista.com/statistics/1108922/india-novel-
coronavirus- impact-on-hand-sanitizer-prices/
6. Hand Sanitizer Market Outlook (2022-2032) by Persistent market research
https://www.persistencemarketresearch.com/market-research/hand-sanitizer-market.asp
7. Hand sanitizers ethanol F.D.A Supply chain By red river biorefinery
https://www.supplychaindive.com/news/hand-sanitizer-ethanol-covid-fda-supply-
chain-red-river-biorefinery/591411/
8. https://www.transparencymarketresearch.com/hand-sanitizer-market.html
9. ECONJOURNAL https://econjournals.wordpress.com/category/assignments/supply-
and- demand-assignment/

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