COVID-19 Scare Pushes FMCG Growth in February as Personal Hygiene Products Pick Lead

The sagging FMCG industry got a boost in February and March owing to heavy sales in personal hygiene segment due to the coronavirus threat in the country.

According to a recent report from data analytics firm Nielsen, the Covid-19 scare drove a significant (value) growth for the hygiene categories in February, pushing the fast moving consumer goods (FMCG) to 8 per cent last month.

The sector grew at 6 per cent in November, 5 per cent in December and January as compared to the year-ago same periods.

Indian FMCG Industry growth rate has been on a downward trajectory for the last three quarters, it is only in the month of February 2020 that we saw a flattening of growth trend, said Nielsen.

According to the report, overall sales growth of personal hygiene products has leapfrogged in the first two weeks of March, while it has sky-rocketed on the e-commerce platforms, due to the lockdown and closure of shopping malls.

Average weekly orders of products as hand sanitisers have shown 1,425 per cent growth in the e-commerce sector in the first two weeks of March compared to February, while face mask registered 408 per cent growth, hand wash 86 per cent and floor and toilet cleaner 77 per cent growth in the same period.

In the traditional channels as offline stores and kiranas, hand sanitizers' growth was 144 per cent between mid-February to mid- March compared with the same period of 2019. For liquid hand wash, it was 42 per cent, 39 per cent for antiseptics and 8 per cent for toilet soap.

Besides, pantry stocking also drove offtakes of staples and processed foods in March as branded pulses reported 72 per cent growth and packed atta (wheat floor) 25 per cent in the mid-February-mid March period, year-on-year.

In the first two weeks of March, e-commerce sector reported 106 per cent jump in cooking oil, 84 per cent in salty snacks, 68 per cent in soft drinks and 31 per cent in biscuits (two weeks of March versus February).

As we saw that parts of India had entered into the 3rd and 4th threshold of consumer behaviour in March, it was reflected in buying behaviour around pantry preparation and quarantined living stages. This included heavy buying of staple food categories viz. packaged wheat flour and packaged pulses.

"Likewise, we saw significant growth in indulgence foods categories as well, said the report titled Covid-19: Impact on Indian FMCG and Retail.

With increasing preventive mindset, categories like cough syrups, gloves and masks have witnessed high growth in the first two weeks of March, it added.

Its research tracked shopper behaviour and sale of subsequent goods starting February till mid-March.

Earlier, Nielsen had predicted a lower growth rate for the FMCG industry in comparison to growth during previous years.

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, said Prasun Basu, President, South Asia for Nielsen in a con call.

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.

According to him, this crisis would set a new normal for categories as hygiene.

Hygiene categories showed significant growth in February indicating that India was already simmering into the second threshold (proactive health minded buying). A case in point is the Hand Sanitizers' category that witnessed a whopping 53 per cent growth in February vs year ago (against 11 per cent growth in Nov-Dec-Jan period), the report said.

According to the finding, 91 per cent people said they would stock up personal hygiene products, followed by 74 per cent, who said they will stock up cleaning products. 67 per cent said they will stock up on grocery essentials such as atta, rice, lentils, oil.