Indian FMCG Sector

Which way will you tilt during COVID times? Hope or Fear!

You must have read about the Spanish Flu (1918), which had resulted in 50 million deaths across the globe. Then came Great Depression (1929), which resulted in Global GDP contraction of around 26%.

And here we are staring at COVID-19 pandemic and global recession together which none of us thought we would confront in our lifetime. Within 6 months, the pandemic spread to every single country in the world with a 6-million positive cases. The pandemic situation has pushed us into the unchartered waters and we are passing through a phase of uncertainty and high risk. The entire country is in a state of lockdown from over 70 days.

Since the outbreak of Covid-19, the FMCG Sector is in turbulence across the world. In Indian context, FMCG sales which was on a healthy double-digit growth has suddenly slipped to below 5% level within 2 months. During lockdown 1.0, there was a sudden increase in demand for essential products and commodities as people were stocking up for 2-3 months with an assumption that these products might not be easily available during lockdown. But as government began easing of the lockdown restrictions the panic buying tapered off. With an increased awareness of hand hygiene among the masses, the demand for hygiene products like handwashes, hand-sanitizers and other household cleaning products has grown exponentially.

Key Macro factors impacting Demand