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Consumer sentiment on ‘vocal for local’ showing steady growth, says Nielsen report

The report says two in three consumers intend to buy more local brands as they are manufactured in India, create job opportunities and use Ayurveda and natural ingredients. The report says the FMCG industry has seen a rebound in June to pre-Covid level and rural areas have contributed more sales to the category than the urban

Two in three consumers intend to buy more local brands going forward as they are manufactured in India, create job opportunities and use Ayurveda and natural ingredients, says data and measurement firm Nielsen in its fourth edition of its report ‘Covid-19 evolving consumer trends’.

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The report, which focuses on the impact on the FMCG industry since the countrywide unlock and emerging consumer trends, says the sector has seen a rebound in June to pre-Covid levels and rural areas have contributed more to sales than urban.   

The report states India is still in transition on consumer behaviour threshold. 

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Six key consumer behaviour thresholds

  • Proactive health-minded buying: Interest in health and wellness products.
  • Reactive health management: Health and public safety products prioritised, e.g. face masks. 
  • Pantry preparation: Pantry stockpiling of health-safety products. 
  • Quarantined living preparation: Increased online shopping with strain on the supply chain. 
  • Restricted living: Restricted shopping trips, online fulfilment are limited, rising price concerns.
  • Living a new normal: Return to daily routines. Permanent shifts in channel mix, supply chain, and hygiene practices.

According to the report, Covid-19 has impacted Asian markets in different ways. Severity, spread of the pandemic and markets, and dependence on retail channels are making the difference.

Lockdowns at a stretch from March to May had delayed growth recovery for India and Thailand.

However, the FMCG industry exhibits signs of a rebound in June to pre-Covid levels.

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Rural market has contributed more in FMCG rebound than urban markets. After unlock, the value sales in urban areas have increased to 92%, which was 70% during the lockdown. In rural, the percentage has increased to 109% from 84% in lockdown.

In the food category, value sales percentage was 78% in lockdown three and four and it has increased to 94% after unlock. The pre-Covid percentage was 100 in December-to February and 103 in March.

Similarly, the non-food category saw an increase to 104% after unlock, which was 72% in lockdown three and four. It was 99% in March and 100% from December to February.

A spike in traditional trade was observed since June, which had a decline in April.

Categories with differential patterns of recovery:

  • Beauty sees sharp recovery in June.
  • Daily use categories return to normalcy.
  • Heightened hygiene is the new normal.
  • Homemade foods continue to trend.

Emerging consumer trends:

  1. Consumers are preparing for uncertainty with concerns of economic recession, rising unemployment, MSME shutdown and health.

According to the report, consumer behaviour has changed to prioritising fundamentals (personal/ home hygiene, healthy food, medical education, home entertainment, investment).

They have become bearish on discretionary spending like dining out, shopping luxury brands, travel, alcohol, automobile, etc.

  1. Urge to break free with safety and immunity.

Safety and immunity will remain embedded in consumer behaviour for a long time. The report states that there’s a surge in evolved hygiene and immunity categories.

Liquid toilet soap, chyawanprash and branded honey witnessed good growth in both traditional and modern trade.

  1. Consumers Cautious: Prefer ‘contactless’ home delivery.

They are focusing more on doorstep delivery and minimal physical touch points.

  • Reliance on online shopping: 62% of consumers intend to increase online shopping by more than 20%.
  • Increase in digital payments: 54% paying more often via payment apps.
  1. Home cooking becomes a grounded mindset for consumers.
  1. Consumer sentiment on ‘vocal for local’ showing steady growth.

Key consumer perceptions of what is a local brand?

  1. Manufactured in India
  2.  Creates jobs opportunities for Indians
  3.  Available across India
  4.  Headquartered in India
  5.  Uses Ayurveda/ natural ingredients

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