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FMCG consumption trends in India in light of COVID-19

Here are the key highlights of the changing Indian consumer trends due to the virus which retailers and manufacturers must adapt to in order to succeed.

The coronavirus pandemic has changed consumption patterns across the FMCG sector. Nielsen began noting the changes as early as in the last week of February. This is the second edition of Nielsen's report on COVID – 19's impact on FMCG and retail. It details the dramatic change in consumer's purchase behaviour due to the virus, in light of a nationwide lockdown being enforced throughout India. Nielsen is an American information, data, and measurement firm with a presence in over 100 countries Here are the key takeaways from the report:

1. As countries entered restricted living, Indians purchased hand wash, hand sanitisers, and floor cleaners the most with regard to 'Evolved Hygiene'.

2. Food items that flew from the shelves were packaged atta, packaged rice, breakfast cereal, and cheese.

3. Western markets saw a bigger surge in purchase compared to India in the lead up to restricted living. 'Panic buying' was a more prevalent phenomenon in these markets than in Indian markets.

4. Social media conversations around the coronavirus were higher during 'Janata Curfew' and before the first lockdown was announced. Interest around these topics, including '5baje5minuteclapping', and'#9baje9minute' (diya lighting) dropped by the time the announcement of the lockdown extension was made.

5. Post high double-digit growth in the first three weeks of March, a sharp fall was seen across all retail channels. This is because of the timing of the lockdon extension - by then, India moved into the phase of 'restricted living' in a more prepared manner.

6. FMCG baskets saw accelerated trade until lockdown in the modern trade. Traditional retail (Kirana stores) also saw an uptick in sales as they were able to ensure delivery of essential commodities reached the consumers at their households. E-Commerce had a very low share of trade during the first few weeks of lockdown because of logistical concerns.

7. Supply chain logistics is the industry's biggest concern. E-commerce lost its share in the retail pie because there were concerns about warehouses staying open. Many staff from all forms of retail were unable to come to work, had fallen sick, or had left for their home town.

8. Industry leaders choose recalibration of innovation and distribution strategy as a focus area. This was because sales across categories saw a decline - however, that is expected to pick up again once the pandemic ends.

9. Social media conversations around immunity and germs shot up. Hashtag tracking revealed that Indian conversations on social media focussed on themes of positivity, resillience and there were attempts to spread awareness on topics like handwashing and social distancing.

10. Increase in the practice of necessary precautionary measures against the virus. Mask wearing, using sanitisers and hand washing behaviours have all increased and these behaviours are expected to continue once the lockdown ends.

11. Small players plugged the demand-supply gap in hand sanitiser and packaged rice category.

12. March 2020, saw 152 new hand sanitiser players. This included FMCG giants like Dabur and Nycil, yet availability continues to be a problem - which is why small players are having their time in the sun.

13. 57 per cent of corporate leaders talked about more focus on e-commerce as a top priority in the next 12 months.

14. 39 per cent of consumers said they'll increase online shopping by more than 20 per cent post COVID – 19 situations. This is because of an increase in 'contactless' deliveries - which the consumers believe are more hygienic.

15. Consumers will be conservative on discretionary spends in the upcoming months.

16. Future behaviour shifts will focus on health, hygiene facets, and financial security.

17. Technology will act as a catalyst for convenient and enhanced consumer experiences. The 2003 SARS outbreak in China is famous for accelerating adoption of online shopping - catapulting websites like Alibaba and to make unprecedented sales.

18. New consumer habits will remain ingrained after restrictions lessen. Manufacturers and retailers will need to adapt and meet the altered needs to succeed.

View the full presentation below.

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