FMCG sales in Asia are expected to record growth during the upcoming Lunar New Year season despite the Covid-19 pandemic, according to Nielsen.
Asia’s biggest festive event usually records high consumption of food, beverages, alcohol, personal-care and household products every year. In key markets, including Mainland China, Hong Kong, Malaysia and Vietnam, the FMCG sales achieved double-digit sales value growth during last Lunar New Year, before the pandemic spread too far outside the mainland. However, due to the ongoing Covid-19 situation, this Lunar New Year will differ from one country to another.
We believe that these time-tested Lunar New Year traditions will continue during the pandemic, but they will take different forms and be smaller in scale,” said Diem Sekerel Erdogan, senior VP, intelligent analytics at NielsenIQ, Apac and Eastern Europe, Middle East and Africa. “Smaller-sized social gatherings may also impact the sale of alcoholic beverages – with consumers choosing quality over quantity, thereby favouring premium brands.”
In markets where the pandemic is under control like Vietnam or China, the FMCG industry is set to enjoy greater festive sales compared to last year. Meanwhile, markets that are experiencing third or fourth waves of the pandemic such as Malaysia, celebrations will be more muted due to government restrictions to curb further spread of the virus.
In China, FMCG sales are typically 33 per cent higher than during non-festive periods, while promotions increase by 17 per cent. This year, sales are expected to rebound. FMCG sales in Hong Kong were mainly driven by visitors from mainland China and other parts of Asia. This year’s sales, however, will be largely driven by local consumption.
Meanwhile, Malaysian FMCG sales are expected to be generated from health-protective and household categories.
“Our data shows that the chocolate category in Malaysia is typically underpromoted during the festive season, and is therefore not experiencing the sales boost that it would if promoted optimally,” said Sekerel Erdogan.
In Singapore, consumers will seek to stretch their dollar this year given the country’s economy is still impacted by the pandemic.
“It is important for industry players to go to the right stores with the right portfolio and adapt their promotion strategies to cater to consumers,” said Luca De Nard, MD intelligent analytics at NielsenIQ Southeast Asia.