Demand for household consumer goods improved during April, May, and June. This was mainly due to the return of millions of migrants to their villages which boosted rural consumption.
Household consumption of FMCG products in April-June 2020 was the highest in the last two years, led by personal care items. The fast-moving consumer goods (FMCG) industry has shown a growth of 4.3 percent in volume and 8.5 percent in value terms in the lockdown-hit April-June quarter, as per the report by data, insights and consulting company Kantar.
The personal care segment witnessed a double-digit growth of 11.1 percent, while household care, which consists of products like detergents and surface cleaners, charted 4.6 percent growth.
FMCG has seen the best quarter volume-wise in the last couple of years, growing at 4.3 percent on a strong growth in both personal care and household care. All the sectors had outperformed in 2019. Food and beverage (F&B) showed a mild sales growth of 3.7 percent in the April-June period. Within foods and beverages, foods have grown by a strong 5.7 percent but beverages have dropped by 19 percent, causing Food and Beverages to grow slower than the other sectors.
K Ramakrishnan, Kantar Managing Director- South Asia, Worldpanel Division stated that even with lockdown, this quarter has been the best in the last couple of years in terms of growth. From a household purchase lens, FMCG overall seems fairly strong.
He also mentioned that growth has been similar in value and volume and these figures are both urban and rural together. Though out of home consumption may have seen a sharp drop, the household view is one of positive growth
In value terms, the FMCG industry reported 8.5 percent growth in the April-June quarter, compared to 6.4 percent in the corresponding period of 2019. Personal care, which mainly consists of oral, personal cleansing, and hair care products, reported a 10.7 percent growth in value terms, while household care saw 12.1 percent growth and F&B grew by 7.2 percent. Value has only marginally outpaced volume at the FMCG level.
Several FMCG companies have stated higher sales in the rural and semi-urban areas. Presently, rural markets account for around 38 percent of the total FMCG sales. However, Kantar’s findings are in contrast to a report by data analytic firm Nielsen, which had last month said the FMCG industry witnessed a first-time decline of 17.1 percent in sales in April-June 2020.
