-
Category
- Africa
- Alcoholic Drinks
- Analytics
- Apparel & Footwear
- Articles
- Asia
- Australia
- Automotive
- Beauty & Personal Care
- Cities
- Company News
- Consumer Appliances
- Consumer Electronics
- Consumer Finance
- Consumer Foodservice
- Consumer Health
- CSR
- Datagraphics
- Digital Consumer
- Economies & Consumers
- Education
- Ethical Labels
- Europe
- Events
- Eyewear
- Free Market Research
- Fresh Food
- Global
- Health & Wellness
- Hidden Content
- Home & Garden
- Home Care
- Hot Drinks
- Industrial
- Ingredients
- Institutional Channels
- Latin America
- Luxury Goods
- Main Feature
- Megatrends
- Middle East
- MRX 101
- Natural Resources
- North America
- Nutrition
- Packaged Food
- Packaging
- Passport
- Personal Accessories
- Pet Care
- Podcasts
- Popular Posts
- Press Resources
- Retailing
- Soft Drinks
- Sports & Entertainment
- Survey Results
- Tissue & Hygiene
- Tobacco
- Top 10 Global Consumer Trends 2019
- Toys & Games
- Travel
- Videos
- VisApps
- On-Demand
- Webinars
- White Papers
- Podcasts
- Videos
-
Tags
- A-B InBev
- Adidas
- advertising
- affordable luxury
- Africa
- ageing
- agriculture
- air treatment
- Airbnb
- airlines
- alcoholic drinks
- Alibaba
- Amazon
- analgesics
- Android
- anti-ageing
- apparel and footwear
- Apple
- apps
- arab spring
- Argentina
- ASEAN
- Asia Pacific
- athleisure
- austerity
- Australasia
- Australia
- automotive
- awards
- baby food
- baked goods
- Bangladesh
- banking
- bankruptcy
- Barcelona
- beauty and personal care
- beer
- Belarus
- beverage packaging
- beverages
- birth rate
- Black Friday
- black market
- bottled water
- bottom of the pyramid
- branding
- Brazil
- breaking news
- brexit
- BRICS
- Bulgaria
- Burberry
- Burger King
- business
- business dynamics
- business environment
- Cadbury
- cafe
- CAGR
- Canada
- cannabis
- carbonates
- cards
- Carrefour
- case study
- Cedric Bra
- celebrity
- CES
- chain
- challenges
- champagne
- channel
- cheese
- children
- Chile
- China
- Chinese
- Chipotle
- chocolate
- christmas
- cider
- cigarettes
- circular economy
- cities
- city travel briefings
- clean label
- climate change
- Coca-Cola
- Cocoa
- coconut water
- coffee
- coffee pods
- Colombia
- commerce
- commodities
- commodities roundup
- company profiles
- competition
- confectionery
- connected consumer
- connectivity
- consolidation
- consumer appliances
- consumer behavior
- consumer electronics
- consumer expenditure
- consumer finance
- consumer foodservice
- consumer health
- consumer lifestyles
- consumer surveys
- consumer trends
- consumers
- contact lenses
- convenience
- corn
- corruption
- cosmetics
- countries
- Crimea
- CSR
- Cuba
- culture
- Cyber Monday
- dairy
- Danone
- data
- debt
- Dell
- demand
- demographics
- detergent
- developed economies
- developing economies
- diabetes
- Diageo
- diet
- digital
- digital consumer
- direct selling
- dishwashers
- disposable income
- distribution
- Dubai
- e-book
- e-cigarettes
- Eastern Europe
- economic outlook
- economies
- edible oils
- education
- Egypt
- electric vehicles
- Electrolux
- emerging markets
- energy
- England
- environmental
- ESOMAR
- Ethical Labels
- EU
- Euromonitor events
- Europe
- European Union (EU)
- Eurozone
- Eurozone crisis
- event recaps
- events
- expansion
- exports
- eyewear
- fashion
- Fashion Friday
- fast casual
- fast fashion
- fast food
- FDA
- fibre
- FIFA
- finance
- Finland
- flavour
- FMCG
- food
- food safety
- food waste
- forecast
- foreign direct investment (FDI)
- fragrances
- France
- free report
- free trade
- French
- fresh food
- frozen food
- functional beverages
- functional food
- Gap
- GDP
- gender
- generation
- Germany
- Gin
- glass
- global
- global financial crisis
- globalcast
- gluten-free
- government
- grain
- Greece
- green
- Green Mountain
- grocery
- growth
- H&M
- Haier Group
- hair care
- Halal
- Hasbro
- health and wellness
- healthcare
- healthy living
- Heineken
- Hershey
- holiday retailing
- holidays
- home and garden
- home care
- Hong Kong
- hot drinks
- households
- Hungary
- ice cream
- Ikea
- illicit trade
- immigration
- imports
- in-cosmetics
- income
- income inequality
- Indesit
- India
- Inditex
- Indonesia
- industrial
- industry 4.0
- inflation
- infographic
- infrastructure
- ingredients
- innovation
- instant coffee
- intelligence
- interactive
- internet
- internet of things
- internet retailing
- interview series
- investment
- Iran
- IRCE
- Ireland
- Italy
- Japan
- Japanese
- jewellery
- juice
- Keurig
- KFC
- Kraft
- L'oreal
- labour
- Latin America
- laundry
- Lego
- LG
- licensing
- Lithuania
- local
- lodging
- loyalty
- luggage
- Luxottica
- luxury goods
- LVMH
- Malaysia
- manufacturing
- market
- market share
- marketing
- Mattel
- McDonald's
- meat
- media
- megatrends
- men's grooming
- MENA
- mergers and acquisitions
- Mexico
- Michael Kors
- Microsoft
- middle class
- middle east
- migration
- milk
- millennials
- mobile
- mobile phones
- mobile retailing
- mobile wallet
- Mondelez
- Money20/20
- monthly health series
- Moscow
- mrx 101
- nappies/diapers
- natural
- natural gas
- natural resources
- Nespresso
- Nestle
- New consumerism
- new markets
- new product
- New Zealand
- news
- NFC
- Nigeria
- Nike
- non-alcoholic
- North Africa
- North America
- Norway
- nutrition
- obesity
- oil
- Olympics
- omnichannel
- one-child-policy
- online
- organic
- over the counter (OTC)
- packaged food
- packaging
- Pakistan
- Paris
- partnership
- Passport
- Passport GMID
- path to purchase
- payments
- Paypal
- Pepsi Co.
- personal accessories
- personalisation
- Peru
- pet care
- pet food
- PET packaging
- pharmaceutical
- Philippines
- podcast
- Poland
- politics
- pollution
- population
- Portugal
- Portuguese
- premium
- premiumisation
- presentation
- Press Release
- price
- private label
- probiotics
- Procter & Gamble (P&G)
- product
- production
- products
- protein
- purchase
- Qatar
- quarterly results
- quick facts
- Ranked
- ranking
- recession
- recovery
- Red Bull
- region
- regulations
- resources
- retailing
- Romania
- RTD
- Russia
- SABMiller
- sales
- Samsung
- sanctions
- Saudi Arabia
- scotch
- Sephora
- sharing economy
- ShopTalk
- Singapore
- Singles Day
- skin care
- slowdown
- smart home
- smartphones
- smoking
- snacks
- social media
- soda
- soft drinks
- Sony
- South Africa
- South Korea
- Southeast Asia
- spain
- Spanish
- speaking engagements
- spectacles
- spirits
- sports and energy drinks
- sports and entertainment
- sports nutrition
- sportswear
- Starbucks
- statistics
- stevia
- store
- store visit
- stores
- strategy
- Sub-Saharan Africa
- subscription model
- sugar
- sugar tax
- summit
- Suntory
- super bowl
- supplement
- supplements
- survey
- Survey results
- sustainability
- Sweden
- sweeteners
- SWOT analysis
- tablets
- tax
- tea
- technology
- telecommunications
- televisions
- tequila
- terrorism
- Tesco
- Thailand
- tissue and hygiene
- tobacco
- Tokyo
- top 10
- Top 10 Global Consumer Trends
- Top 10 Global Consumer Trends 2019
- Top 100
- Top 100 Cities
- toys and games
- TPP
- trade
- travel
- Trump
- Trump downturn
- Turkey
- Ukraine
- unemployment
- Unilever
- United Arab Emirates (UAE)
- United Kingdom (UK)
- United States (US)
- urbanisation
- value
- vegan
- vegetarian
- video
- video games
- videos
- Vietnam
- virtual reality
- VisApp
- vitafoods
- vitamins and dietary supplements
- vodka
- Walmart
- watches
- water
- wealth
- wearables
- webinar
- weight management
- Western Europe
- wheat
- Whirlpool
- whiskey
- white paper
- Windows
- wine
- women
- World Cup
- World Travel Market (WTM)
- WTM
- Xbox
- Yariella Coello
- yoghurt
- youth
- Zara
What Does Demonetisation Mean for the Indian FMCG Industry
The Indian economy has always been heavily dependent on cash transactions. As of 2015, card and electronic transactions only accounted for a meagre 2% of overall consumer payments transactions in the country. The demonetisation of INR500 and INR1,000 notes by the Indian Government on 8 November 2016 created a major shortage of cash in the economy. There is a lot of uncertainty about the direct impact of the demonetisation on the fmcg industry. However, from the consumer’s point of view, demonetisation will act as a catalyst for growth of card/online payments as well as digital/e-wallets and reduce the dependence on cash transactions.
Euromonitor International’s Industry Forecast Model allows companies to use income elasticity as a proxy to understand the probable impacts of the short-term cash crunch on various industries.
The one-year driver elasticity for GDP per capita for key industries in India is given below. Industries with low income elasticity, such as hot drinks, home care and packaged food, are less likely to be impacted adversely due to the short-term cash crunch. Many of the large categories within these industries are considered staples. This implies that, irrespective of the change in the income of the consumer, the relative change to the growth in the industry will be less than when compared to industries such as beauty and personal care, alcoholic drinks and soft drinks, which require more discretionary spending.
Source: Euromonitor International Industry Forecast Model
The Industry Forecast Model can also be used to dive deep into various subcategories within an industry. For example, the one-year income elasticities for the various subcategories within packaged food are given below:
Source: Euromonitor International Industry Forecast Model
Essentials with lower income elasticity such as rice, edible oils and dairy products will be impacted less when compared with products such as ready meals and processed fruits and vegetables. The impact felt will also depend on the frequency of purchase of packaged food through various retail channels.
Source: Euromonitor International
Traditional grocery retailers still account for more than 90% of packaged food value sales in India. Since a big part of these retailers are not well equipped with card payment machines, it is likely that sales during this period will have gone to modern/internet retailers, which offer consumers the convenience of paying by card.
In conclusion, demonetisation has created a short-term cash crunch in the economy and is likely to impact sales of categories that are not staples in the short term. It will also lead to growth in packaged food sales through modern/internet retailers. At the same time, traditional retailers that have felt the impact of the cash crunch have started using QR codes to allow consumers to make small payments. In addition, penetration of digital/e-wallets is expected to increase on the back of supporting government reforms.