Hit by the COVID-19 pandemic, the traditional format of the Fast-Moving Consumer Goods (FMCG) trade in metros has lost around seven percent market share to modern retail and e-commerce in a year, according to a study of a market research firm. The traditional trade has a 65% of the Rs 4 lakh crore FMCG market during the April-June period of 2020, down by 7.2% from 72.2% in the year-ago period, the Nielsen FMCG Snapshot Q2 2020 said.
The traditional trade involves a network of small retailers, dealers, stockists and wholesalers and distributors and serves localised customer demand, while modern trade is large format stores and chains. According to the study, the modern trade, which had a 21.8% market share in the April-June period of 2019, now has 26.4% by end of the corresponding quarter this year.
The e-commerce segment, which had a share of six percent of total FMCG sales in the quarter, has gained to 8.6%, it said.
Maintaining physical distancing norms and technology adoption will be the biggest challenge, the report said. Reliance's Jio Mart aims at empowering local shops with technology, experts said.
Meanwhile, Prime Minister Narendra Modi on Thursday held a brainstorming session with financial sector regulators and discussed various measures to revive the economy, which was hit hard by the COVID-19 crisis. According to sources, the meeting discussed various steps that regulators, especially the Reserve Bank of India (RBI), can take to push economic growth staring at the risk of contraction.
The economy is expected to contract by 4.5% during the current fiscal, as per the International Monetary Fund's (IMF) latest projection. The meeting also discussed preparedness to deal with the post-COVID world and regulatory measures to help achieve the objective of 'Atmanirbhar Bharat'.