FMCG space rebounds to pre-COVID levels; deodorants, skin care see sharp recovery in June: Nielsen India

After a significant impact on account of the novel coronavirus-related lockdown, the FMCG industry in India has recovered sharply in June, driven by traditional trade channels, Nielsen India said.

“There was a clear prioritisation in FMCG categories by consumers during the lockdown period and significant recovery in others with Unlock 1.0 in June. Categories have seen differential patterns of recovery over the last few months,” said Prasun Basu, President — South Asia, Nielsen.

He said with the majority of people confined to their house, cosmetics and beauty categories were de-prioritised in the lockdown phase whereas deodorants, hair colour and skin care witnessed a significant slowdown. These categories had witnessed a sharp bounce back in June, according to the Nielsen India report.

The FMCG research firm also indicated that daily usage categories returned to normalcy. Categories like toothpaste, shampoos, hair oils, which had seen rationalisation during the lockdown period, bounced back in June. A similar trend was witnessed for home care categories such as washing powder and detergent cakes also.

Ghar ka Khana and Do It Yourself (DIY) cooking trend picked up during lockdown, with restrictions around eating out and household help not being around. This led to continued sales for categories like packaged atta and retail packs of edible oil brands. These categories continue to be in the shoppers' basket in Unlock 1.0 as consumers continue to be cautious, Nielsen India said.

Soaps and floor cleaners continued to remain a priority in shoppers' baskets during the lockdown, Basu said.

These categories continue to command a higher share of the wallet in the unlock phase and are firmly entrenched in the ‘new normal’ shopping basket.

With the opening up of the lockdown restrictions in most pockets, consumers in India are progressing from the phase of ‘restricted living condition’ towards the ‘new normal’, the report said.

As consumers start to take tentative steps outside homes, they are finding the world to be far different from the one they left at the beginning of the year.

With over a hundred thousand active novel coronavirus (COVID-19) cases still prevalent in the country, economic activities are in an unlock phase now.

Emerging consumer trends

Consumers prepare for uncertainty: Findings from a Nielsen study reveal that rising unemployment, salary cuts, and enterprise closure were leading concerns that led to contracted income in majority of households . The online study across 22 cities, with over 1,700 respondents was conducted during June 19-25. This coupled by stress of remaining home bound is leading to health concerns. Mental concerns rose by 4 percentage points as compared to a similar study conducted in April.

Consumers are staying away from discretionary spending, a trend that has significantly increased since the April study. On the other hand, uncertainty and health concerns are prompting consumers to armour themselves for the future by spending more on fitness and health, education and financial investments.

Consumers seek to break free with safety and immunity: In both the study rounds conducted by Nielsen in April and June, people confirmed high levels of adherence to precautionary measures against COVID-19. There was a sense of freedom seeking tendency in the June round when a 12-13 percent drop was observed in norms like avoiding public gathering and washing hands multiple times. These were seemingly compensated with other precautions like keeping safe distance and sanitisation.

Another insight drawn from the study was that safety and immunity will remain embedded in consumer behaviour for a long time, with a very high proportion of consumers planning to continue these measures for more than six months. This behaviour is corroborated by high and accelerated sales growth of evolved hygiene categories like liquid toilet soaps, and immunity boosting categories like chyawanprash and branded honey.

Consumers prefer ‘contactless’, home delivery: Consumers in cities are opting for home delivery over in-person visits to the neighbourhood or departmental stores, and are consciously minimising interactions through ‘contactless’ options. Two in every three respondents in the Nielsen study revealed apprehension of the vast majority for any form of long distance travel in the next six months.

Home cooking becomes a grounded mindset: During the lockdown period eating out, food on order or household help for cooking was not available. Such forced cooking in some way busted misconceptions of the neo-cooks who believed cooking to be time consuming and cumbersome, thus not their cup of tea.

Soon many started realising that the cooking process is not burdensome, and multiple cuisine and cooking helps are available online or is a phone call away. This has led to many people, who seldom cooked at home, indulging in the act. This trend could be sticky and might have a long-term impact on eating habits.

Social media conversations analysed on this subject reveals that there were enhanced interests around regional recipes, convenience, and options for novice; also a new cuisine - ‘Crisis Cuisine’ emerged as consumers remained homebound.

Consumer sentiment on ‘vocal for local’ showing steady growth: A Nielsen Consumer study trying to understand what local means to normal citizens, found interesting perceptions around defining perception for the term ‘local’.

These are important nuances for manufacturers and brands to keep in mind as they plan their strategies during current times.