Source: Retail Economic Times, May 12, 2021
New Delhi, The Indian FMCG industry has recorded a 9.4 per cent growth in the January-March quarter of 2021, helped by a consumption-led growth and value growth by increased prices of products, especially of staples, said data analytics firm Nielsen. The rural market continued to perform with strong growth of 14.6 per cent during the period and the metro markets have registered a positive growth after two quarters.
Fast Moving Consumer Goods (FMCG) industry sales growth from the traditional trade channels jumped to double digits, while growth in e-commerce normalised down to single digits in the January-March quarter.
“FMCG industry in India has built growth momentum by growing at 9.4 per cent in the quarter ending March 2021 after growing at 7.3 per cent in the previous quarter (October-December 2020), over the same quarter of the previous year,” said FMCG Snapshot for Q1 2021 released by NielsenIQ’s Retail Intelligence team.
Commenting on it, NielsenIQ South Asia Lead Diptanshu Ray said: “This is backed up by staples, essential non-foods and indulgence categories.”
However, he also cautions that the beginning of the second quarter may bring some new dimensions, as the situation is dynamic across the country.
“Now that lockdowns have resurfaced, and with last-mile delivery boost up, the e-commerce channel will continue to be dynamic,” it said.
According to the report, the metro cities have registered a positive growth of 2.2 per cent in the January-March quarter after two-quarters of the declining trend versus the year-ago period.
“Rural markets continue to further build on the growth momentum – growing at 14.6 per cent in the Mar quarter after a 14.2 per cent growth it posted in the Dec quarter,” it said.
Moreover, Nielsen expects a good expected monsoon this season, making it the third consecutive year of rural rejoice.
This had a boost up effect on the earnings of agrarian households and kept rural sentiments upbeat.
Besides, rural centric schemes as bigger outlay for MGNREGA, rise in wages and increase in MSP of key crops have been instrumental in keeping FMCG consumption in rural markets buoyant.
“We also saw the Large and medium-sized companies bouncing back in Rural India,” it added.
While talking about the consumption growth during the January-March quarter, Nielsen said it was uniform for both foods and non-foods
Foods basket got a boost from the pricing uptick – mainly in staples categories like Edible Oils and Packaged Tea.
Consumption growth witnessed for certain categories in non-staple Foods categories as well such as Biscuits, Coffee, Cheese, Ketchup because of increased in-home consumption.
“There are green shoots of personal care categories’ growth coming back while Snacking and Impulse Foods basket maintained growth trajectory,” it said.
On the other hand, the Non-Foods categories basket saw a dip in average pricing.
“This is due to the increased contribution of larger packs in the consumer basket and rise in consumer promotions in Essential Home Care and Personal Care categories,” it said.
Asked about big foreign firms which have made investments in India in the past year, the commerce and industry minister said Apple and Samsung have invested on a large scale in the country and expanded their facilities.
Referring to the two firms, he said: “I believe they are looking at India as their prime production base to meet the needs of the world.”
He added that pharma companies are also looking at expanding their investments in India.
The minister also expressed confidence that going forward, India will be able to overtake China in its engagement with Bangladesh.
His statement comes at a time when Prime Minister Narendra Modi is visiting Bangladesh.
The Prime Minister left for Bangladesh on Friday on a two-day visit during which he will take part in a wide range of programmes aimed at furthering cooperation between the two countries.
Goyal further said it will be a “record year” in terms of FDI inflows for India, despite the pandemic and “the fact that all international statistics suggest that foreign investments across the world are going to significantly fall in the current months.”
Observing that India was amongst the “rare countries” which saw FDI growth in 2020, the minister said he has “absolutely no doubt it will be a record FDI”.
Asked about India’s relations with Bangladesh vis-a-vis Bangladesh-China ties, he said India has been working relentlessly to build strong relations with all its neighbouring countries.
Goyal said India’s ability to add more value to the products and services has helped it expand trade ties with countries like Bangladesh.
“I have the confidence that going forward, we will be in a position to overtake China in their engagement with Bangladesh. We are working with that single-minded purpose and our industry has the ability,” said the minister.
He said India’s services sector has the confidence, adding that “we in government are also proposing several initiatives, some of which should be discussed during PM Modi’s visit to Bangladesh.”
However, he added that India does not hold a grudge against any country for its engagement with anybody else and focuses only on what it can do with that country better.
Goyal, who is also the railways and consumer affairs minister, said the Indian Railways has seen the highest freight loading in its history every month since September 2020 till February 2021.
“When we close March 2021, despite the setback of first few months of the lockdown, we will be exceeding last year’s loading in the Indian Railways in terms of freight and it will be the highest freight loading that Indian Railways has seen in its long history,” he said.
On the Bharat Bandh called by farmers” organisations on Friday to protest against the three farm laws, which included train blockade, Goyal said he has been monitoring the situation and in the last report sent to him, he saw that in the whole country some 60 odd trains were disrupted for 5 to 15 minutes.
The minister said this clearly shows that “farmers across the country are happy with these laws”, adding that the three farm laws do not take away anything from what was already existing and they are an added option given to the farming community. Asked about the ‘TRP scam’, Goyal said the investigation will bring to light any wrongdoing and stringent action will be taken against the guilty.