Low-key celebrations could still boost FMCG growth

The scaled-down Lunar New Year festivities can still pull in sales for the fast-moving consumer goods (FMCG) industry. While the festive period will continue to bring families and friends together, research firm NielsenIQ said the groups celebrating may be smaller given the challenges of COVID-19. However, manufacturers and retailers can still boost their sales by anticipating and adapting to changing consumer needs.
The Lunar New Year brings out the highest spending for the FMCG industry in key Asian markets. The festive period brings more increased demand for food, beverages, alcohol, personal care and household products. The research company added that the festive spending remains high in key Asian markets namely the Chinese Mainland (up 33%), Hong Kong (up 27%), Malaysia (up 32%) and Vietnam (up 15%). These markets all experienced double-digit sales value growth in previous years.
Traditionally, the Lunar New Year is when family and friends gather over food and drinks to usher in the new year. NielsenIQ said manufacturers and retailers could focus on offering in-home food and beverages for families opting to celebrate at home instead of eating out.
"We believe that these time-tested Lunar New Year traditions will continue during the pandemic," said Didem Sekerel Erdogan, senior vice-president, Intelligent Analytics, APAC & EEMEA, NielsenIQ. "But they will take different forms and be smaller in scale."
She added: "We expect a rise in home-cooking, for example, as families avoid crowded restaurants for the reunion dinner. Smaller-sized social gatherings may also impact the sale of alcoholic beverages — with consumers choosing quality over quantity, thereby favouring premium brands."
Constrained consumers will gravitate towards economic pack sizes, attractive promotions and deals. In contrast, insulated consumers may choose to indulge even more in anticipation of a more positive Year of the Ox, thus seeking more premium items.
“This presents a unique opportunity for manufacturers and retailers to cater to shoppers on both ends of the spectrum," she concluded. (Image from Unsplash)