Economy

FMCG sector shows resilience during second Covid wave

Meenakshi Verma Ambwani New Delhi | Updated on August 12, 2021

Value growth of 36.9 per cent year-on-year in June quarter, says NielsenIQ

Despite an intense second pandemic wave, the FMCG industry showed resilience and did not see any major setbacks in growth momentum in the June quarter.

As per insights and research by NielsenIQ, the FMCG industry’s value growth for the April-June quarter was estimated at 36.9 per cent compared to the same period last year. This growth though has been at a lower base due to the impact of the first pandemic wave but it was also backed by positive rural growth and lesser disruptions in supply chains.

Also read:FMCG value growth outpaced volume growth in 12 months till May: Kantar

At the same time, a nominal drop of 2 per cent was seen in the June quarter compared to the January-March period in terms of value growth.

Decentralised lockdowns

Diptanshu Ray, NielsenIQ South Asia Lead said, “During the second wave, the lockdowns were decentralised and partial in nature. Average number of closure days for retail stores were far less during the second wave compared to the first wave. This allowed for greater accessibility for consumers. Consumers avoided panic buying which also ensured lesser disruption in the supply chain.”

Ray added that the two per cent drop seen in FMCG value sales in June quarter versus March quarter was largely due to some dip in growth in the urban markets, even as rural markets continued to clock positive growth.

“This has been the third consecutive year of good monsoons. This helped rural markets to be more resilient than urban markets. In addition, affirmative actions in terms of government schemes also helped rural markets to continue seeing buoyancy,” he added.

The top 52 cities also saw a significantly lesser impact in the second wave compared to the first wave of the pandemic, NielsenIQ pointed out.

Also read:FMCG sector growth to double to 10-12 per cent this fiscal: CRISIL Ratings

Volume growth for the FMCG industry was pegged at 18.2 per cent in June quarter year-on-year. Overall, during the period of June 2020-June 2021, value growth of all India FMCG industry was pegged at 12.5 per cent backed by 5.8 per cent price growth and 6.4 per cent volume growth, NielsenIQ added.

Trade channels

Traditional trade channels which include grocers and chemists remained buoyant, while e-commerce saw a strong surge especially in the bigger cities. Modern trade is still in the recovery phase when compared to pre-covid period, it added.

Also read:Study finds how migrants become unofficial brand ambassadors for FMCG firms

“E-commerce channel clocked a record high growth in June quarter compared to the same period last year. Its contribution to FMCG sales in the top 52 cities has also reached a double digit mark of about 10 per cent in May. E-tailers’ focus on ensuring availability and last mile delivery has yielded dividends,” said Sameer Shukla, Customer Success Lead, NielsenIQ South Asia.

Published on August 12, 2021

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