Varsha worked as an investment banking analyst at Goldman Sachs before switching to journalism. She started off at Business India and later moved to Forbes India where she writes across industries and companies but has a bias towards startups, technology and the FMCG sector. She was a national level athlete and now enjoys running half marathons.
After showing early signs of revival at the start of theyear, the FMCG market tooka hit in March with the onset of theCovid-19 outbreak and thesubsequent lockdown. FMCG growthfor Q12020 stands at 6.3 percentagainst Nielsen’s forecast of 8-9percent at the start of this year.
Nielsen has revised its full year2020 growth forecast to 5-6 percentfrom 9-10 percent. It considersthe January-December period forcalculating growth numbers.
The market research firm noted“distinct signs of recovery” in Januaryand February. Rural markets andmetropolitan cities, in particular,showed signs of recovery during this“pre-Covid” period, largely driven by food categories. March, however, brought with it a slowdown across FMCG categories, especially non-food categories. “The intensity, severity and longevity in terms of how this lockdown will be phased out will play a key role in determining the impact,” said Nitya Bhalla, data science leader, South Asia, Nielsen Global Connect, at a virtual press briefing.
That said the market research firm expects FMCG growth for the second half of 2020 to be 5-6 percent.
Bhalla, however, warns of headwinds, including a drop in consumption, especially discretionary spends; rising unemployment and its impact on disposable income and hence demand; widening fiscal deficit as a result of reduced tax revenue and increased government spending on Covid-19; and a fall in manufacturing and industrial production due to the lockdown. GDP as a result is expected to shrink to 1.5-2.8 percent in FY20.