India’s fast moving consumer goods (FMCG) industry is likely to grow between 5-6% in 2020, according to the revised estimates released by Nielsen. The research firm had earlier predicted the growth to 9-10% for the year, however, amid the ongoing pandemic in the country significantly impacting the sector, the firm has revised the estimates to include the consequences of covid-19.
According to the report, the value growth for the sector, including e-commerce slowed down to 6.3% during the first quarter of 2020 from 7% in Q4 2019 due to the impact of lockdown creating a disturbance in the supply chain towards March. Out of 6.3% growth, almost 3.3% growth is coming in from organised trade, followed by 1.9% from modern trade and 1.1 % from e-commerce. The contribution of e-commerce has been particularly higher in metro cities, however, other cities are coming up too with increased adoption of modern trade and e-commerce platforms.
The growth of e-commerce can be attributed to the ‘Big Days’ which have helped the sector outperform modern trade. The report cites big days as Republic Day, Independence Day. In the month of August 19, the e-commerce sector grew by 53% driven by non-food items whereas during republic day 20, the growth stood at 72%. Whereas, during the same period, modern trade witnessed a growth of 14% in August and 19% on Republic day.
“While the GDP, industrial production, unemployment and fiscal deficit continue be impacted in light of the ongoing coronavirus lockdown in the country, how the lockdown will be phased out by the Government will play a key role in determining the impact on the FMCG sector which had begun witnessing signs of revival in the first two months of the year,” Nitya Bhalla, data science leader-South Asia, Nielsen Global Connect added.
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