Can lost consumption start to be recovered?
So far Covid-19 has driven a loss of 45bn RMB for the FMCG market in China. Will this number continue to increase or can lost consumption start to be recovered?
Forecasting analysis conducted by the Expert Solutions team at Kantar Worldpanel shows that without Covid-19 during the 17 weeks to 17th April 2020 the FMCG market would have grown at 5.5%. Instead the market declined by -3.9% over this period and meant that 45 billion RMB of sales were lost that we would have expected to happen without the pandemic.
This loss represents 9% of sales and is driven mainly by those categories which are experiencing a U-Shape recovery where consumers are being slower to return to their previous purchasing levels. In more severe cases consumers may have permanently changed their behaviour which will mean that overall consumption will be lower in the future.
However,there are other categories that have grown more than expected as a result of Covid-19, and these ‘growth’ categories have driven an incremental 11.6 billion RMB to FMCG. While some of these categories have done well as they met specific needs during the pandemic (such as sanitisation and more home cooking), many consumers are likely to stick with these new habits post pandemic which will mean continued growth.
Understanding what will happen to a category for the rest of this year and beyond is vital for any FMCG manufacturer and retailer. By combining the strength of consumer behaviour data and the latest machine learning techniques, Kantar Worldpanel is uniquely placed to forecast the future sales for FMCG categories based on different scenarios. This will allow manufacturers to estimate the total loss (or gain) that Covid-19 will generate and, more importantly, help to build a plan for the future based on recovering lost consumption.
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Managing Director, Great China
- Send a messageJason Yu