FMCG recovery to be driven by home consumption

“Much of the resurgence in spending will still be conditional on consumers’ financial situations. However, the deployment of a vaccine will likely elicit a greater sense of spending relief.” - Luca De Nard

KUALA LUMPUR: As the economy picks up steam, recovery in the fast-moving consumer goods (FMCG) retail sector will be driven by continued in-home consumption as well as higher demand for personal care products.

While travel restrictions have gradually eased and employees are going back to the office, NielsenIQ (South-East Asia) managing director, intelligent analytics Luca De Nard said the work-from-home trend will still continue for many workers.

“We believe that recovery in the FMCG retail sector will be driven by a number of factors.

“Firstly, in-home consumption will be higher than pre-pandemic levels, as working from home will continue for a portion of the workforce, and financially impacted consumers will dine in-home as it is more cost-effective than dining out.

“This means that the sale of dry groceries and staples will be higher than they were before Covid-19, but slightly lower than this time last year, which was when shoppers were in pantry-stocking mode, ” he said.

He pointed out that according to The Conference Board Consumer Confidence Index, done in collaboration with Nielsen, the 2020 fourth quarter consumer confidence in Malaysia was at 93 points, suggesting that Malaysians are more pessimistic about their financial prospects over the next 12 months compared to how they felt in the previous year.

He also noted that 63% of Malaysians do not think now is the time to spend on things that they want, which meant that a significant portion of the population could be on belt-tightening mode and may gravitate towards cheaper products or potentially put off purchasing certain products altogether.

“As a vaccine becomes available, and Malaysians feel more confident about their financial prospects, it could trigger some loosening of purse strings. Consumers who experience better financial prospects are also likely to ease back on their cost-conscious mindset and some of their spend rationalisation strategies.

“Much of the resurgence in spending will still be conditional on consumers’ financial situations stemming from the pandemic impacts. However, the deployment of a vaccine will likely elicit a greater sense of spending relief, ” he said.

De Nard also anticipates a recovery in personal care products such as cosmetics, face and hair care products as more and more people return to the workplace and as people socialise outside of the home.

The progressive return to the office will also help boost convenience stores around business centres and urban areas as consumers seek impulse purchases such as beverages and snacks.

Notably, the pandemic has also created an even bigger focus on health, with health being the third-biggest concern of Malaysians after the economy and job security.

Not only will consumers increase their spending on products that promote good hygiene such as hand sanitisers, floor cleaners and cleaning wipes, De Nard believes they would also be seeking products that offer them health benefits.

In this respect, he advised FMCG manufacturers to highlight the health benefits of their products.

Over the course of the past year, shoppers have also turned to online channels and discovered the convenience of shopping online. And as their trust in e-commerce increased, De Nard said many will keep e-commerce as part of their channel repertoire moving forward.

For more information, visit

Arslan Ashraf, managing director, consumer insights, APAC & Global FMCG Vertical, and Punit Singh, head of Nielsen operations centre, East Zone, will be speaking at the Smart Retail Live Virtual Conference on March 30 & 31, dedicated to enabling digitally-powered retail businesses to accelerate growth in the new Malaysia 5.0 digital economy, powered by disruptive technologies.

Smart Retail Live Virtual Conference is organised by Star Media Group Bhd with DAPAT Vista and Forter as Terabyte Partners and NielsenIQ as a Knowledge Partner.

Admission is free. Visit to register.

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