The FMCG industry has grown sharply, recovering to pre-covid levels in the month of June as India moved towards unlocking the economy post the three months of lockdown due to the outbreak of the novel corona virus, according to market research firm Nielsen.
The recovery is driven by traditional trade channels like kirana and neighborhood stores, the research firm said.
While both urban and rural markets are recovering, rural is coming back at a faster pace, performing better than the pre-covid levels, said Prasun Basu, President — South Asia, Nielsen at Nielsen Global Connect.
However, since urban markets contribute 60-65% of FMCG sales, recovery of urban markets is important, he added.
The sales of food, as well as non-food categories, have grown in June as compared to the previous month, non-food categories such as beauty and hygiene have grown significantly.
“With majority of people confined to their house, cosmetics and beauty categories were de-prioritised in the lockdown phase – categories like deodorants, hair colour and skincare had witnessed significant slowdown. The categories have witnessed a sharp bounce back in June,” Nielsen said.
The sales of daily use items like toothpaste, shampoo, hair oil and washing powder that had witnessed rationalisation in the lockdown period have bounced back in June.
With most consumers preferring to have home-cooked meals, packaged atta, edible oil and cheese continue to be in the shoppers’ basket.
The FMCG industry has been going through a slowdown since early this year first on account of muted demand followed by the outbreak of the coronavirus pandemic.
There has been a shift towards e-commerce as people remain sceptical of public spaces. “Consumers are minimising physical touchpoints and reliance on online shopping has increased,” the Nielsen report said.
Around 62% of those who were surveyed by the market research firm said that they intend to increase online shopping by more than 20%.
Consumers have prioritised fundamentals such as healthy foods, home hygiene, medical, fitness, education, home entertainment, and investment as they prepare for uncertainty caused by the slowing economy, rising unemployment and salary cuts, according to Nielsen.