Due to the prevailing uncertainty as a consequence of the coronavirus outbreak, market research firm Nielsen has slashed its FMCG forecast for 2020. Nielsen has cut its full-year FMCG growth projection to 5-6 percent for 2020 from the earlier estimate of 9-10 percent.
FMCG value growth in metros and rural India dipped in Q1 2020 as compared Q4 2019, according to Nielsen. The impact of COVID-19 was felt in March. Data by Nielsen showed that half the growth in Q1 2020 came from modern trade and e-commerce. The lockdown saw growth in traditional trade shrinking in Q1 2020 against the same period last year.
May is expected to continue to be a difficult month as companies work on fixing supply chain issues and labour challenges. "Don't see a pick-up in retail immediately. It will take a couple of quarters for things to stabilise on ground," said Sharang Pant, lead retail vertical and RMS at Nielsen Global Connect.
As FMCG companies deal with these challenges, there is hope that just like every year demand will improve from rural areas after the monsoon sets in. "The extent of monsoon and its pattern in India will be important to track to be able to ascertain demand going forward," said Nitya Bhalla, data science leader - South Asia at Nielsen Global Connect.