Nielsen: FMCG pick up pace in pandemic

08-Apr-2020 Intellasia | BangkokPost | 6:02 AM Print This Post

Despite the pandemic escalating locally, Thailand’s 800-900 billion baht fast-moving consumer goods (FMCG) industry grew in the first two months of this year, according to Nielsen Thailand, the market research firm.

Somwalee Limrachtamorn, the company’s managing director, said FMCG in terms of value grew by 1.3 percent and 1.5 percent in January and February, respectively, with volume gains of 0.9 percent and 1.2 percent over the same period last year.

The growth was lower than the rates in the same period last year, when value rose 6.5 percent in January and 6.3 percent in February, while volume expanded 6.4 percent in January and 6.3 percent in February.

In 2019, FMCG grew by 3.9 percent in value terms and 3.6 percent by volume from the year before.

According to Ms Somwalee, the FMCG trade in the first two months this year fared relatively better than in December last year, which is the peak sales season for consumer goods, when both volume and value contracted by 1.2 percent and 1.7%, respectively.

Product categories that enjoyed growth of 10-30 percent in the first two months of this year include cooking oil, eggs, packed rice, and instant coffee, while the big losers included bird’s nest essence and multi-purpose paper.

“The impact of the outbreak on consumer demand and retailers is expected to continue producing winners and losers in FMCG,” she said.

We believe FMCG results in March will see growth in the low single digits, depending on consumer spending sentiment.”

Ms Somwalee cited a Nielsen survey that found 60 percent of consumers expect the pandemic will last another 4-6 months.

This will aggravate consumer shopping sentiment, she said.

Ms Somwalee said slow growth was observed in Bangkok, the North and the South, partly influenced by a declining number of foreign tourists.

In February, FMCG sales in the South contracted by 2 percent in value terms and 2.8 percent by volume.

Value sales in the North and Greater Bangkok in February grew 0.2-1.6%.

She said there is still opportunity amid the crisis.

The market value of consumer products in the northeast and central regions kept growing, at 3 percent and 4.3%, respectively, in February.

The spending power of both regions remains strong as they don’t rely on foreign tourists as do the North, the South and Bangkok.

Ms Somwalee said there is still huge potential, particularly in the central and northeast regions, and urged marketers to seek real demand in each region.

She said consumers in each region have different shopping behaviours and demand for different products because their needs change as the pandemic develops.

“We’ve seen new opportunities emerging out of crises, especially for new channels such as e-commerce, streaming, delivery services and the rise of social media consumption as more people stay home in line with government policy,” said Ms Somwalee.

“Online grocery shopping has become more significant.”

Online grocery shopping is about 2 percent of total retail business globally. The pandemic will compel consumers to change their behaviour, boosting the demand of FMCG via e-commerce, she said.

Marketers should know how to advertise their products amid the pandemic, said Ms Somwalee.

“There are still opportunities where marketers, particularly in the fastest-growing categories, should respond quickly in developing innovative products to answer market needs. They should expand the area coverage of deliveries, upgrade supply chains and logistics, ensure there are sufficient inventories, pre-amplify social media influence and accelerate online to offline integration,” she said.

“The pandemic is fast-tracking digital transformation and we all see consumers’ online adoption spike across age groups during the outbreak. This trend will become the new normal post-crisis, so the synergy between offline and online is crucial for manufacturers and retailers.

“It’s time to accelerate digital strategies to put businesses in a competitive position after the pandemic.”


Category: Thailand

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