The festive season has helped boost sales for the fast-moving consumer goods sector (FMCG) in October 2021 by 21.3 percent.
According to data from retail intelligence platform Bizom, growth was seen in both urban & rural areas.
The growth in FMCG sales in October was led by commodities and discretionary products like beverages.
Commodities sales were up 35.4 percent year-on-year, while they grew 16.3 percent over September 2021. Festive season typically sees social gatherings and so sales of discretionary products like beverages went up 22 percent and up 3.9 percent month-on-month.
Sale of packaged foods also rose 13.1 percent in October and with gifting of chocolates and snacks picking up pace during the festive season, sales of confectionaries also increased over 14 percent over 2020, but Bizom says there was an 18 percent sequential decline because Indian mithais saw higher demand than chocolates during the festive season.
Personal care sales also picked up during the festive season, increasing 17.6 percent in October over the same month last year.
However, compared to 2020, out of home has picked up pace as vaccination rates improve, COVID cases decline and more people resume working from offices. As a result, while there was a growth in homecare sales last year,
Bizom says it is seeing a drop in demand this year on account of these reasons which has reduced consumer fuss around hygiene products. According to Bizom data, homecare sales declined 8.4 percent in October 2021.
However, early trends for the first two weeks of November saw a sequential decline in sales, Bizom says. FMCG sales are down 15.5 percent in the first two weeks of November across categories as the number of active kiranas too, is down by 12.2 percent. Bizom tracks data from purchases at kirana stores.
Bizom says the reason for this is because nearly 70 percent kirana stores were shut on Diwali days and this reflected in sales for November 4 and 5.
“There was heavy stocking in kiranas in the build up to Diwali. However, excess stocks are still lying on shelves which will be liquidated before new stocks get billed by kiranas. This year, Diwali was in week 1 of Nov whereas last year, at the sametime, there was heavy stocking from FMCG brands to kiranas as a buildup to Diwali. Hence we see a significantly higher drop this year during the first two weeks,” Akshay D’Souza, chief marketing officer, Bizom said.
The increase in sales in October also comes at a time when the FMCG industry is battling high raw material prices flagged by all FMCG majors including HUL, Britannia and ITC, among others.
This has also led FMCG majors to hike prices of products across categories.
However, Bizom says that the reduction in import duties on cooking oils is helping the easing of prices and coupled with festive buying, it is seeing solid growth in sales in October.
(Edited by : Aditi Gautam)
First Published: IST