In a presentation estimating the impact of the Covid-19 pandemic on Indian fast moving consumer goods (FMCG) and retailers, Nielsen said hygiene categories showed significant growth in February. In March, Indians swiftly moved to heavy buying of food staples such as packaged flour (atta) and packaged pulses, and indulgence foods categories like salty snacks.
Nielsen surveyed sales of such products across e-commerce retailers, grocery stores, and shoppers in the country. Its research tracked shopper behavior and sale of subsequent goods starting February till 21 March.
As number of Covid-19 cases have continued to rise in India, the hand sanitizers category witnessed a whopping 53% growth in February against an 11% increase during November-January.
Online sale of such goods was especially high. Average weekly orders of hand sanitizers jumped 1425% online--in the first two weeks of March compared with February--while growth in orders for face masks surged 408% and that of hand washes rose 88%.
Floor and toilet cleaners saw a 77% increase in online orders during the period.
In traditional trade, value sales of sanitizers between mid-February to mid-March were up 144% compared with a 72% jump in the year-ago period.
Nielsen also tracked purchase behavior of shoppers during March when states started announcing lockdowns. This, Nielsen said, showed “pantry preparation and quarantined living stages."
“This included heavy buying of staple food categories such as packaged wheat flour (Aatta) and packaged pulses. Likewise we saw significant growth in indulgence foods categories as well," Nielsen said.
In traditional trade, value sales of branded pulses grew 72% year-on-year during mid-Feb to mid-March. While, packaged flour saw a 25% year-on-year jump in sales (in value terms).
Online too, these categories saw a big surge in orders. Average weekly order growth for cooking oil surged 106% during mid-February to mid-March, while that of cooking essentials such as spices, salt, ghee was up 21%, wheat flour orders were up 16%. Online, sale of salty snacks rose 84%, while soft drinks saw a 68% jump in average weekly orders between February and March.
Now, as India has entered the 21-day lockdown, consumers told Nielsen they are highly likely to stock up on personal hygiene products such as hand wash, soaps, and sanitizers, with 91% respondents agreeing to buying these. About 74% of agreed to buy cleaning products, while 67% said they will stock up on grocery essentials such as atta, rice, lentils, oils, followed by other who said fruits and vegetables would be key.
India’s FMCG industry grew 6% year-on-year in November, and 5% in December, and January, but a spike in sales of personal hygiene products and basic staples pushed the value growth for fast moving consumer goods to 8% in February.
The country's large fast moving consumer market had reported sluggish sales over the last 12-18 months, especially as rural markets slowed down. In January, Nielsen maintained its annual growth outlook for India’s FMCG sector to 9-10% for 2020. In 2019, the sector grew 9.7% by value, due to weak quarterly growth rates in rural India.
But Covid-19 is likely to see these estimates alter depending on future demand.
“Given Covid-19 we will have to revise our estimates on the sector and given that it is a once-in-a century situation, it is very difficult to call where growth will pan out," Prasun Basu, president, South Asia for Nielsen, said in a call with journalists on Thursday.
Basu said it is unlikely that things will come to a standstill, "Consumption is still ongoing…you will find high points and low sales points, and de-growth in some categories in the month of April," he added.