Rural retail demand helps FMCG biz recover

According to Nielsen, both urban and rural sales are growing but the recovery/ sales from the undeveloped semi-urban/rural quarters are much faster and traditional trade channels as neighbourhood and Kirana stores have scored over modern trade outlets as retail outlets and hypermarkets.

Compared with other global markets such as China, Malaysia, Indonesia and Thailand, the industry in India has witnessed a delayed growth recovery due to extended lockdowns, said Nielsen President South Asia Prasun Basu.

Though it has taken three months, we are kind of coming back to the levels, which we had left behind at the end of last year and the beginning of this year Q1 period. If that was 100 in the index, then today we are at 98, which is almost recovered. Good news is it is a clear but a slowish recovery, said Basu.

The FMCG industry had a sharp decline in April .It started recovering in May (25 per cent decline) and in June, it returned almost to pre-Covid-19 level.

Nielsen is comparing the average sales data of December, January and February and from June. It has dropped March for the baseline comparison as according to Basu, it was the month when there was panic buying in the segment with lots of pantry uploading.

Sameer Shukla, Nielsen Global Connect West Market Leader - S Asia said the growth recovery is led by rural and traditional channels. Rural is the major contributor toward that recovery. It’s not that urban has not recovered as it had a higher dip in April and May and then gain. In rural, the dip was not that significant, he said.

Rural sales contribute to around 37 per cent of the total FMCG sales, Shukla added. With the majority of people confined to their house, cosmetics and beauty categories were de-prioritised in the lockdown phase - categories like deodorants, hair colour and skin care had seen significant slowdown. These categories saw a sharp bounce back in June, said Nielsen. Hygiene segments including products as toilet soaps and floor cleaners continue to be in the priority list of the shopper now.