Signs of FMCG revival to pre-COVID levels in June; rural beats urban India in growth trend: Nielsen

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Updated: Jul 17, 2020 2:54 PM

The FMCG industry is finally exhibiting signs of revival to pre-COVID levels in the month of June after demand starts to pick up for certain categories.

FMCG sector saw a 34% decline in April driven primarily by traditional channelsFast-moving consumer goods industry has been facing the headwinds of a slowdown for over 18 months now; first, because of a prolonged demand slump emanating from rural India, and then this year.

The FMCG industry is finally exhibiting signs of revival to pre-COVID levels in the month of June after demand starts to pick up for certain categories. “We are seeing a clear growth trend in June over May. It is almost back to the level of pre-COVID levels to the index of 98. It is driven by traditional channel expansion,” Prasun Basu, President — South Asia, Nielsen, told Financial Express Online. Further, rural and urban are growing, however, rural India is recovering at a better pace than urban. “It is a very promising picture. There is a very big move to traditional trade. Net growth of rural and non-food categories is a big plus. Beauty, Health and Hygiene are doing well,” Prasun Basu added.

Fast-moving consumer goods industry has been facing the headwinds of a slowdown for over 18 months now; first, because of a prolonged demand slump emanating from rural India, and then this year due to the coronavirus pandemic and the subsequent lockdowns. Among the categories which have witnessed a sharp recovery are beauty, daily use items, hygiene related products and items required for preparing ‘ghar ka khana’ such as packaged atta, refined oils and cheese.

Meanwhile, consumers are still preparing for uncertainty in coming times with key concerns being recession, job losses, MSME shutdowns, salary cuts and effect on mental and physical health. In line with the same, consumers have prioritised fundamentals such as healthy foods, home hygiene, medical, fitness, education, home entertainment, and investment. On the other hand, categories of discretionary spends such as dine out, travel, luxury brands, new car, alcohol, tobacco, apparel etc. Moreover, there has been a marked shift towards e-commerce as consumers remain sceptical of public spaces. “Consumers are minimising physical touchpoints and reliance on online shopping has increased,” the Nielsen report said. 62% of those who were surveyed by the market research firm said that they intend to increase online shopping by more than 20%.

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