The second wave of COVID-19 has battered both urban and rural India. Many households have lost their livelihoods as the disease continues to spread faster than before.

At least 27 states have imposed various levels of restrictions to curb the spike in new cases. This has created a situation where India is effectively in a lockdown, though not as strict as the one in 2020.

But net-net, lower incomes and restrictions on establishments has meant that both consumer demand and supplies have taken a hit and FMCG companies are among the worst hit.

While the industry grew 9.4 percent in the January to March quarter led by strong rural growth of 14.6 percent, some FMCG companies have expressed caution over demand growth in the April to June quarter. However, what is more worrying this time, is that with nearly 50 percent of new cases coming in from rural areas, both urban and rural consumption are likely to see a sharp decline.

FMCG major Dabur said it is difficult to anticipate the full impact of the second wave, and cautioned that there will be some margin pressure in the first half of the financial year. Hindustan Unilever (HUL), meanwhile, believes the demand scenario looks uncertain in the month of May.

To understand the impact on the sector, CNBC-TV18’s Shereen Bhan spoke to Arvind Singhal, Chairman of Technopak Advisors; K Ramakrishnan, MD-South Asia Worldpanel Division, at Kantar; and Mayank Shah, Sr. Category Head at Parle

For the full discussion, watch the video.

(Edited by : Bivekananda Biswas)

First Published:May 19, 2021 6:37 PM IST