The Covid-19 outbreak and subsequent lockdown has led to a shift in buying behaviour of fast moving consumer goods in favour of online purchases as regions across the country, with higher dependence on traditional retailers, saw a fall in volumes of such items. This is despite the fact that traditional channels continue to dominate the contribution to India’s retail channels for FMCG sales.
As per a study by Nielsen, among the four zones of India, east zone was under maximum stress during the January-March period, while the south zone continued to see sustain growth. The study noted that the east zone recorded 0.4 per cent on-year sales volume growth for FMCG products during January-March period this year, compared to 10.9 per cent growth last year. Traditional trade contributed to 95 per cent of the FMCG sales in this region.
The south zone, which was least impacted — recording 6.4 per cent growth in January-March this year, compared with 8.7 per cent last year — has the least contribution from traditional trade in all four zones at 84 per cent.
Prasun Basu, south Asia zone president, Nielsen Global Connect, said the Covid-19 episode is expected to cause significant shift in consumer patterns going ahead but the magnitude of how the behaviour gets altered will only be known once lockdown is lifted. “There will be a new normal for retailers for sure,” he said during a webinar on Thursday.
A survey by CARE Ratings observed while sectors such as e-commerce and retail are expected to do well in the ongoing financial year, with 82 per cent of the survey’s respondents expecting positive growth in these sectors, “it can be inferred that the growth will be supported by the e-commerce sector rather than retail”.
The push towards online commerce is also evident from the fact that several large companies are tweaking strategies to give a leg up to their e-commerce operations on back of expectations that consumers may not immediately return to physical stores. “While we are taking all measures to ensure social distancing and have even laid down SOPs to ensure safety, there is an expectation that people might be afraid to visit stores at least immediately post the lockdown is lifted,” said a senior sales department executive at a large fashion and lifestyle brand.
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