Post COVID 19 trends to play out in FMCG sector

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Chiangmai, Thailand - fmcg

And here we are staring at COVID-19 pandemic and global recession together which none us of thought we would confront in our lifetime. Within 6 months, the pandemic spread to every single country in the world with 6- million positive cases. The pandemic situation has pushed us into the uncharted 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. There have been lots of ups and downs in market pricing and product value. Especially when it comes to the demand of the urban and the rural sector.

Rural consumption has been a laggard during the quarters preceding the pandemic. This is mainly due to the reverse migration, increased government expenditure, and the factors related to it. Such a large migration from urban to rural areas may well tilt the growth in consumption in favor of Bharat.

E-COMMERCE DEMAND:

           Most FMCG companies forged swift tie-ups with delivery companies such as Zomato, Swiggy, Dominos, Big Basket, and Dunzo to ensure that their products reach the customers ordering online. Companies expect this demand to increase over the pre-COVID levels since the lockdown prompted people to get used to online ordering and the convenience of home-delivered groceries.
COST CONTROL:

           With topline growth under constraint during the lockdown, companies are likely to be keener on enhancing profitability. Cost control is a major tool for companies to improve their margins. Tighter credit terms, judicious advertising, and effective use of digital marketing will help companies rein in costs.

BRAND EQUITY:

              Seizing the opportunity offered by COVID, almost every FMCG company launched its brands in the hygiene categories of hand wash and a sanitizer, adding to the clutter in these otherwise small categories and niche.

FMCG sector is expected to remain more resilient and shall recover much faster than other sectors. Rural demand will grow on the back of value packs and revenue management initiatives, which calls for some innovation in packing and pricing.

Time will tell how long this pandemic is going to last, but one thing is sure that the FMCG sector will emerge strong given the foundation and consumption story of our country. So, in the end, it lies in the hands of the consumers and their demand being served. 

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