As Indians prioritise spending, personal care makes cut

Indians seem to be back to colouring their hair, wearing perfumes, taking care of their skin and shaving beards, as offices open up and people again celebrate social occasions. At least, this is what market data suggest.

Non-essential personal care products – among the worst hit during the pandemic – have outperformed the overall FMCG category in sales volume growth in recent months after about two years, according to data from consumer goods trackers NielsenIQ and Bizom. Industry executives said sales were almost back to pre-Covid levels for most categories.

NielsenIQ data for the April-June show that while the overall FMCG volume shrank 0.7% from a year earlier, the non-essential personal care segment expanded 3.3%, even outpacing the food segment that rose 1.8% with only impulse food categories, which are linked to out-of-home consumption, growing faster at 15%. The non-food FMCG volume declined 6.4%.

Most of the discretionary personal care categories are in the mid-to-premium segment. The sales growth of such products defies the historical industry trend of consumers cutting down on discretionary FMCG spending in times of high inflation. To be sure, the base effect, due to weak sales a year earlier, has also contributed to the category’s industry-leading growth rate.

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NielsenIQ said categories such as perfumed deodorants and cologne reported more than 40% volume growth last quarter, buoyed by the summer season, consumers heading out for work and entertainment as they get back to normal routines. Categories like skin creams, coconut oil, hair dyes and talcum powder also expanded over the same period last year.

“The economy opened up during Diwali last year. So, the base is low and hence there is high growth. There are also factors such as people coming back from rural to urban areas to work after offices reopen. Modern trade has opened too and that’s certainly having an impact,” said Nivea India managing director Neil George.

FMCG July value sales data from Bizom show growth between 7.8% and 50% in non-essential personal care products over the same month last year, driven by categories linked to out-of-home use. Again, the fastest growth was for the perfume and deodorant category at 50%. Skin care sales grew 18.9%, while the shaving category expanded by 10.8% and hair colour by 7.8%.

‘Urban Consumption Picking Up Faster’

Akshay D’Souza, chief of growth and insights at Mobisy Technologies, which owns Bizom, said an early trend was emerging of urban consumption picking up faster with higher economic activity and an increase in out-of-home activities led by schools, colleges and offices getting back to action.

A spokesperson for FMCG-to-hotels conglomerate

said the beauty categories were showing recovery and several sub-segments had grown more than the pre-pandemic base. “These categories will grow with the expansion of occasions,” he said.

Reporting its fiscal first-quarter results on Wednesday,

said there was strong growth in hair colour sales in April-June, driven by a category uptick. , in its quarterly update for April-June, said premium discretionary categories fared relatively better because of a low base and a lower consumption dip in the upper income consumer segment.