Friday, March 29, 2024

Advertisement
FMCG to register flat growth in 2020: Nielsen

By Retail4Growth Team | August 03, 2020

Though the FMCG industry has shown some sign of improvements in June, but in the first half of the year (January-June) the industry growth slipped to negative with 6 percent decline

India’s fast moving consumer goods (FMCG) sector is expected to witness flat growth in 2020 following severe and extended lockdowns, restrictions on manufacturing units, social distancing norms and store closures, according to data analytics firm Nielsen.

Earlier, on April 30, in the middle of the lockdown, Nielsen had slashed the growth forecast for the FMCG sector by almost half to 5-6 percent for 2020 citing adverse impact of the coronavirus pandemic.

Though the FMCG industry has shown some sign of improvements in June, but in the first half of the year (January-June) the industry growth slipped to negative with 6 percent decline.

 

ALSO READ: Hit hard by Covid-19, Apparel retail industry looks for the best way out

 

“Keeping these unprecedented dynamics in the market, Nielsen has revised its outlook and is expecting the year to be in the flat growth range (-) 1 percent to 1 percent for branded FMCG industry in India, as against a 5-6 percent growth projected earlier this year,” said Nielsen.

This is the second revision of the forecast by Nielsen for 2020, amid coronavirus pandemic and subsequent disruption in the market and supply chain.

Nielsen had on January 21, projected a 9 to 10 percent growth for the FMCG industry with a “stable” outlook on the back of favourable macroeconomic factors.

“The bellwether FMCG industry, which was trying to revive from a difficult 2019, had a significant hit in the April-June quarter with a 17 percent decline in sales value as compared to the same quarter of 2019,” said Nielsen.

However, Nielsen expects an uptick in demand in October-December quarter during the festive seasons as food categories are expected to see a higher growth, while July-September quarter is also likely to see some growth.

According to the report, the FMCG industry would have rural dividends, which has recovered and bounced back from the COVID-19 impact.

“Rural India has been comparatively insulated from COVID-19 so far, however its spread is now reaching the hinterland. Having said that, we do expect an overall positive uptick due to reverse migration,” said Nielsen.

Rural India contributes around 36 to 37 percent of the total FMCG sales, bulk of which is contributed by food items.

Advertisement

Comments

Related Viewpoints

In-store segment to record highest CAGR in retail automation market, says report

Global DTC food market projected to see CAGR of 18.7% during the period 2024-2031

Next phase of ecommerce growth in India to be driven by tier 2,3 & 4 consumers, says PwC report

Advertisement
Advertisement
Have You Say
Advertisement
Resource
Follow Us On
Advertisement