India’s FMCG market contracts 34% in April amid Covid-19 outbreak.

by mehekkaoberoi
  • The extent of disruption to the Rs 4.3-trillion fast-moving consumer goods (FMCG) market in India due to the Covid-19 pandemic and lockdown has now become clear.
  • On May 22, market research agency Nielsen said the domestic market contracted 34 per cent in April, the first full month of the curbs. Traditional trade, which contributes 87 per cent in terms of sales to the overall market, saw a bigger drop of 38 per cent in April. Modern trade, which contributes 10 per cent, slowed to 5 per cent in April. This is after modern trade reported 26 per cent growth in March and traditional trade saw 1 per cent growth.
  • For the three-month period extending from December 2019 to February 2020, the growth rate, said Nielsen, of the overall FMCG market was 6 per cent. This declined to 3 per cent in March after the lockdown, first partially and then fully, was announced from the middle of the month.
  • If the January-March period is considered, then the FMCG growth rate was 5.3 per cent, excluding e-commerce. After adding the e-commerce sales, the growth rate improves to 6.3 per cent for the quarter.
  • In a recent note, ratings agency CRISIL said it saw FMCG resilience being tested in the April-June period, with financial year 2020-21 being largely challenging for companies in the sector.
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