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Ecommerce, FMCG to push adex growth in 2021 to almost 2019-levels: GroupM’s TYNY report

Telecom, auto and consumer durables sectors are also expected to grow and contribute to the adex this year

India’s adex, which saw a steep decline of 21.5% in the year 2020 due to the Covid pandemic, is expected to grow by 23.2% in 2021, says GroupM’s TYNY report.

According to the report, India’s adex had reached Rs 83,000 crore in 2019, and fell to Rs 65,000 in 2020. With the economy recovering and big events such as IPL returning to their schedule, the adex is estimated to go back to Rs 80,000 again in 2021, though slightly lower than 2019. 

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Releasing the report through a virtual event, Ashwin Padmanabhan, President, Partnerships and Trading at GroupM, said that a number of Government measures such as the increased capex for highways and infrastructure focus on rural economy will generate jobs in various sectors.

He said that the ecommerce and FMCG industries will drive the growth of India’s adex. The FMCG sector’s innovation, along with widening of their distribution in tier two and three towns through D2C channels, will drive growth for the segment in.

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The ed-tech sector will continue to drive the growth for the ecommerce sector. “It is estimated that online ed-tech players added half the total customer base that they had in the past 4-5 years in just 4-5 months last year,” he stated.

Gaming platforms’ contribution to the growth of ecommerce will be significant, he said, adding gaming grew almost by 22% in 2020 and is expected to grow further by 40% in 2021.  He said the growth of OTT entertainment will grow on the back of newer packs, free trails and mobile versus big-screen plans.

The need for safer transportation and multiple new launches in the personal vehicle category will also contribute to the adex. “Multiple big launches in the personal luxury vehicle category are scheduled. We are seeing multiple pay models such as subscription models gaining traction, which is potentially going to be a new trend in 2021. The investment in EV (electronic vehicles) will see traction, including the focus on infrastructure in cities. The vehicle scrappage policy should also drive sales,” said Padmanabhan.

The advent of 5G handsets and the expected arrival of 5G services by the end of 2021 will drive growth for the telecom sector. The focus on local manufacturing has also led to India to becoming a medium-level smartphone ownership market from a feature phone market. 

Padmanabhan said the consumer durable market will grow in 2021. “We are seeing the excitement in the consumer durable segment driven by smart appliances such as smart TVs and smart home appliances. The concept of smart homes is exciting to consumers; a lot of product innovation is happening in the area. D2C in this sector will drive growth for consumer durables.” 

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