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Business News/ Industry / Retail/  Consumers seek value offerings in crisis

Consumers seek value offerings in crisis

The definition of ‘essential’ products in a consumer’s basket will include health foods, personal and home hygiene products

Photo: MintPremium
Photo: Mint

Six months after India went into a lockdown, consumer behaviour has undergone a radical change: shoppers are snapping up health, hygiene and immunity products and seeking more value for money as they turn frugal about household expenses. Some of these changes, said market researcher Nielsen, could last for six months and beyond and prompt more fast moving consumer goods companies (FMCG) to expand their value range.

Nielsen identified four emerging patterns in the covid-19 framework being driven by the re-opening of businesses and economies that it said will “reset" consumption baskets and affordability metrics for shoppers, among other things. The researcher released these India specific “COVID-19 Behavioural Reset" findings on Thursday.

A massive spike in unemployment, economic uncertainty and declining consumer confidence has led to buyers becoming more risk averse, and seeking products and services that deliver value, quality and peace of mind, Nielsen said. While this is true of shoppers globally, in India, it is visible in consumers buying more “mass" products that grew their share of FMCG purchases even as premium and popular products declined.

“As a result of this affordability reset, we are seeing the growth in the mass price segment whereas the premium is going down. This has implications for a lot of manufacturers," said Diptanshu Ray, retail intelligence lead for the South Asia market, Nielsen.

Interestingly, the share of private labels in modern trade stores that are priced lower than regular brands—across categories such as rice, soaps, honey, flour and noodles—also grew in July. Besides, covid has changed the definition of “essential" products in a consumer’s basket to include a range of health foods, personal and home hygiene products. The report said health measures have become integrated with lifestyle. “Consumers need to account for new basket essentials stretching their dollar further to merge old and new needs," the report said.

“A lot of health products will now be part of the essentials basket. Earlier essentials were mostly packaged rice and flour—people are no more just stocking those up now," said Ray. These products are now a permanent fixture in household grocery purchases.

However, consumer adoption for health, hygiene and immunity products is coupled with the fact that shrinking wallets are making them frugal. “So they are spending less on some products while accommodating expenses on new categories such as hand washes, immunity products and surface disinfectants," said Ray, adding that sanitizer, chyawanprash, an ayurvedic health mixture, and branded honey are now part of the grocery list.

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Suneera Tandon
Suneera Tandon is a New Delhi based reporter covering consumer goods for Mint. Suneera reports on fast moving consumer goods makers, retailers as well as other consumer-facing businesses such as restaurants and malls. She is deeply interested in what consumers across urban and rural India buy, wear and eat. Suneera holds a masters degree in English Literature from the University of Delhi.
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Published: 18 Sep 2020, 07:57 AM IST
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