FMCG companies bounce back in Dec quarter: Survey
NEW DELHI: Consumers snapped up soaps, hair grooming oil, packaged foods and domestic cleaners in the December quarter as they emerged from the worst of the pandemic, a report by market researcher Nielsen said, driving up the value of fast-moving consumer goods (FMCG) sales by 7.3% from a year ago.
The recovering economy, festive buying and rural revival boosted volumes—across traditional channels and modern trade—by 5% in the period, the Q4 FMCG Snapshot by Nielseniq’s retail intelligence team said on Tuesday.
This is the highest volume and value growth reported by the FMCG sector in 2020. FMCG grew steadily for four months, Nielsen said, with value growth rising from 2.7% in September to 9.1% in December.
For the whole of 2020, however, value growth declined 2%, in line with its earlier projections for the full year. The researcher had projected FMCG sales to shrink between -1% and -3% in 2020, led by the sharp sales contraction in the June quarter. Nielsen executives remain hopeful of a positive growth trajectory this year but declined to share projections citing local and global uncertainty around the virus.
“We are witnessing a fourmonth consecutive growth, and it started from back in September; then in November, when the festive season really picked up, we saw a 9% growth; the best part is that in December, this growth sustained,” said Diptanshu Ray, lead, retail intelligence, India, Nielsen IQ. As consumers stepped out to shop, India’s large cities with over a million people entered the positive growth territory, reporting a 0.8% growth in sales value in the December quarter, after two quarters of decline, Nielsen said. Meanwhile, rural markets raced ahead as sales value rose 14.2% from a year ago.
“This sharper recovery is on the back of favourable agricultural sector performance, government action towards rural employment generation, and as rural India had a lesser impact of the pandemic,” Nielsen said.