featured insights - nielsen · 2019. 5. 29. · 15 w3215 w3315 w3415 w3515 w3615 w3715 w3815 w3915...

1Copyright © 2017 The Nielsen Company

1

F E AT U R E D I N S I G H T S

B I G E V E N T S – W H AT ’S I N I T F O R R E TA I L E R S ? UNVEILING THE NEXT GROWTH OPPORTUNITIES FOR RETAILER BIG EVENTS

• South—onceasaturatedmoderntrademarket—isnowseenasthelargestvaluedriver.

• SuratisanupcomingcitywithalargespendingappetiteduringBigdays.

• Inaslowingeconomy,‘BigEvents’spurthetight-f istedconsumertoloosenthepursestringsbyofferinggreatersavingsonessentials.

• Festival-led events brings a cheer to both shopper as well asretailers; the former gains by splurging on a wide range of frillcategories while the latter benef its by not entirely depending onpricepromotionstodriverevenue.

• Promotion strategy needs to move away from a one-size-f its-allapproachtobeingtailor-madeforeacheventkeepinginmindtheshopperaudience.

Traditionally, customers in India used to wait for the festive season to

make bulk purchases and indulge in premium purchases. Today however,

shoppers are not limiting their enthusiasm to festivals alone but are also

making bulk purchases at events created by retailers around national

holidays like Republic Day, Labour Day and Independence Day—we are

calling them ‘Big Events.’ Such events are attracting new shoppers and

ensuring that organised retail remains firmly entrenched in the minds

of the urban shoppers.

Indian consumer packaged goods (CPG) market for the year ending

June 2016 grew at 7%. However, Q2’16 witnessed the slowest CPG

growth for traditional trade while modern trade has seen a revival.

DELIVERING CONSUMER CLARITY

2 FEATURED INSIGHTS | BIG EVENTS – WHAT’S IN IT FOR ETAILERS?

Modern trade, unlike traditional trade, has the advantage of running big

events/sales that entice and spur consumer spending especially during

slowdowns. The greatest benefit along with being a one-stop-shop is

the fact that modern trade is able to give better offers across categories

that aid customers in their everyday lives. In tight economies, where

saving is critical and the consumer seeks greater value at a lower or

same price, modern trade comes to the rescue through such big events.

BIG EVENTS: A SHOT IN THE ARM FOR RETAILERS

BIG EVENTS DAYS

3.4 5.5

3.4 2.9 4.2 3.9

4.8

5.9 7.4

9.5 10.4 11.7

10.3

7.2 7.4

4.3

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0

54000 56000 58000 60000 62000 64000 66000 68000

Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216

VALU

E RS

. CRO

RE

FIG

IN %

TOTAL FMCG VALUE TT+MT MT VAL GROWTH % TT VAL GROWTH%

Source: Nielsen

Year Ending

MAY’15Year Ending

MAY’16+8%886Cr 955CrINCREASE IN SALES DURING EVENTS

Source: Nielsen


Today, event sales contribute to 955 crore in modern trade (for the

year ending May 2016), accounting for nearly 17% of total fast-moving

consumer goods (FMCG) sales. We also see an 8% growth in sales

during events as compared to previous year.

While festivals and holidays occur throughout the year in India, the

second half of the year is widely considered the festive sales period,

as it fits in nicely with a lot of celebrated holidays. The retailer created

week-long Independence sale event which is designed around the

Indian Independence date of 15th August, makes around INR 190 Cr in

sales compared to an average event sale of INR 142 Cr, designating it as

the biggest sale event for the year.

The slower growth in the first half of 2016 results from the decline we

see during the Labour Day event. So in a tough economy, shoppers are

seen focusing on essentials with greater discount offerings. The second

half of 2015 witnessed higher growth, which can be attributed mainly

to the purchase of frill categories like ghee, dry fruits, chocolates etc.,

during cultural festivals like Diwali.

BIG EVENTS: WHAT RAKES IN THE MOST?

YR ENDING MAY’15 YR ENDING MAY’16

REPUBLIC DAY(JAN)

LABOUR DAY(MAY)

INDEPENDENCE DAY (AUG)

DIWALI(OCT/NOV)

GANDHI JAYANTI(OCT)

120127

119114

174193

119148

115132 +16%

+25%

+11%

-4%

+5%

Figures in Rs. CrSource: Nielsen

Growth (%)


Big events in the first half of the year are mostly focused on price

promotions. The chart below highlights the prominence of price

promotions during non-festive events. Over the last year, we have seen

a drop in average price, driving a peak in sales during big events. This

is also supported by the Nielsen’s Shopper Trends Study where 38% of

shoppers claim to be actively seeking products at discounted prices as

against 35% in 2015. Shoppers are consciously seeking deals; hence

effective promo communication at the point of purchase becomes

extremely important for retailers.

PRICE PROMOTIONS PEAK SALES DURING EVENTS

38

2015 2016

Actively look for and buy products on special/discounted prices

Take advantage of a special o�er or promotion

Shop for special occasions

2015 2016 2015 2016

711

4 9

35

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250

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WEEKS

VOLU

ME

(IN K

G/L

TR)

VALU

E (IN

Rs.C

R.)

Aver

age P

rice

(Rs.

per 1

00

Gm

s/ml/N

o.)

AVERAGEPRICE

INR 13.6

W51

15

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6 W

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1816

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1916

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2016

W

2116

VALUE (RS.CR.) VOLUME (TON) AVG PRICE

Source: Nielsen


The top six metros of India continue to dominate the retail landscape

with higher presence and greater business. Also, higher density of

population and rising purchasing power of consumers in these cities

leads to greater sales during events.

Event sales in the top six metros – Delhi, Mumbai, Pune, Hyderabad,

Bangalore and Chennai – contribute to 91% of total sales. Retailers,

therefore, have an opportunity to capitalise on the spending power in

these markets not only during big days but to build relationships with

shoppers to earn their purchases during non-event periods as well.

GROWTH DRIVERS FOR BIG EVENTS

We have broadly identified three key questions retailers must ask

themselves to help them in their growth path. Chances of success are

greater if they continue to leverage this path.

1. WHERE – Which markets to tap into having higher growth potential?

2. WHAT – What categories to focus on during Big Events?

3. HOW – How to scale up revenues by maximizing on volume?

1. WHERE - MARKETS TO FOCUS ON?

Modern Trade was first established in the south of India. Over time, this

region was regarded as a saturated market for modern trade. However,

today, the southern market for modern trade is reviving—reflected in its

growth contribution towards big events. Today, 43% of total event sales

come from South, and this includes sales from cites like Bangalore,

Chennai, Hyderabad, Kochi, Visakhapatnam and Vijayawada. However,

it’s also important to note that 71% of the total event growth comes

from this region. This trend is reflected even during regular times where

South is driving growth. Hence, is Souththenewphoenixoftheretailmarket?

29%

71%

INCREMENTAL SALES

REST OF THE MARKETS

+4%SOUTH MARKETS

+14%

Source: Nielsen Scantrack Data

6 FEATURED INSIGHTS | BIG EVENTS – WHAT’S IN IT FOR ETAILERS? Copyright © 2017 The Nielsen Company

MAT’16EVENT SALES IN

TOP 6 CITIES

868 Cr

+8%

SMALL CITIESTOP 6 CITIES

%CONT TO TOTAL EVENT SALES 91% 9%

Surat is a part of the new metro cities list of India, currently it is ranked

8th in India with a GDP of $40 billion. Keeping in line with this, we have

seen good sales growth coming from this city during the big events.

This is also reflective of how Surat’s economy has been progressing in

the last 10 years, with an annualized GDP growth rate of 11.5 per cent

over the past seven fiscal years.

In Urban India, while an average event contributes to 17.5% of total

sales for a year, Surat was the only market where the sales contribution

during events rose to 24.3%. Clearly, opportunities abound for retailers

who capitalise on non-event periods too in this city. This diamond city

can truly become the next dream city for retailers.

2. WHAT – CATEGORIES TO FOCUS ON?

Foods which include packaged foods, staples and beverages generally

make up 65% of urban India’s annual retail modern trade sales. This

contribution remains the same during festivals like Diwali, where we

see almost two-third of the sales coming from this segment. Packaged

foods and staples are the largest contributors to the food segment.

Source: Nielsen

DELHI

MUMBAIPUNE HYDERABAD

CHENNAIBANGALORE


Within the food categories, soft drinks observe a peak in sales during

the Labour Day event, which can also be a byproduct of the change

in seasons, summer in this case. However, this category performed

brilliantly during the Independence Day event, a non-season time, due

to the multitude of offers. Thelearning,therefore,isthatanon-seasonalpushispossiblewhenyoucrafttherightpromotionmechanismbehindcertaincategories.

22%

22%

29%

14%

16%

STAPLES

PERSONAL CARE

PACKAGED FOODS

HOME CARE

BEVERAGES (+8%)

(+14%)

(+7%)

(+10%)

(+2%)

YEAR ENDING MAY’16

OVERALL EVENT SALES CONTRIBUTION%

6.8

4.3

4.5

8.4

6.6

4.5

4.7 5.2

5.7

7.2

6.2

6.7 7.1

8.4 8.6

8.6

7.9

14.3

9.0 8.9

10.6

9.4 9.1

8.1 6.6 6.8

7.6 6.9

7.4 6.5

7.0 7.4

15.3

6.2 6.2 6.5

6.4 6.4 6.7

8.8

8.5

8.7

8.2 7.6

8.2 7.4

4.6

5.3 5.7

5.4

5.3

6.6 7.2

SOFT DRINKS SALES IN CR

WEEKS

VALU

E (IN

Rs.C

R.)

Source: Nielsen

Source: Nielsen


Packaged foods’ contribution during all big events is 29%, but during

Diwali, we see it go up to 35%. Categories like ghee, salty snacks and

chocolates peak in sales during Diwali, and this increased contribution

does not completely hinge on price promotions. This reiterates that the

average price for such frill categories does not observe a drop during

Diwali unlike what we have seen earlier where the overall price drops

during non-festive events.

Shoppers seem to be price inelastic for certain categories duringfestivals like Diwali. Hence, the retail paradox of price versus valueneedstobeevaluatedateveryevent;thereisnoone-size-f its-allschemeinthisspace.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

W2215

W2315

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W1016

W1

116

W1216

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W2016

W2116

AVERAGE PRICE 2015 Total Diwali

CHOCOLATE 84.5 113.4 PACKAGED PURE

GHEE 40.0 40.2

SALTY SNACKS 23.3 24.9

CHOCOLATE

PACKAGED PURE GHEE

SALTY SNACKS

SKIN CREAMS

WEEKS

VALU

E (IN

Rs.C

R.)

3. HOW – BULKING UP THE SHOPPER’S BASKET?

Gift packs for chocolates and banded salty snacks are normally big

selling items during festivals like Diwali. What is interesting to note is

that bulk packs for non-food categories like diapers, washing powder

and deodorants sell heavily during big events. Shoppers are increasingly

becoming deal seekers with the objective of maximizing their savings.

Bulkpackswith largediscounts tickall the relevantboxesonsaving,valueanddiscountfortheshopper.

BULK PACKS (%Cont to Category)

DIAPERS (>=50 pads)

PACKAGED RICE (>=5 Kg)PACKAGED TEA (>=800 Gms)

WASHING POWDER (>=3 Kg)

BIG EVENTSDAYS

49% 39%

72% 63%

40% 23%

40% 27%

REGULAR DAYS

DEODORANTS (Banded) 21% 12%

BUY IN BULK TO GET LOWER PRICES

44

2015 2016

57

Source: Nielsen


CONCLUSION

Why is it important to focus on big events? Today, almost 50% of

shoppers visit modern trade, resulting in a 13% increase in store visits.

We also see a significant overlap between a traditional trade and modern

trade shopper; nearly half of traditional trade shoppers also visit a

modern trade store today. Increasing personal disposable incomes, the

rising levels of women in the workforce has also led to more families

opting to shop in modern trade which offers greater savings on their

entire shopping basket.

In addition, the shoppers sitting at the lower end of the economic

spectrum have started coming into modern trade. Termed as LIVE

(Low Income Value Explorers), these shoppers on an average spend

around $120 million on FMCG products in a modern trade store, and

one in two visit a modern trade outlet in a year. This consumer segment

has shed its diffidence in terms of its buying habits. Forshoppersseizedbyaspirationand insecureabout theirwell-being,modern trade isanindulgencethatimpartsasenseofprogress.

The retail environment today sees constant and intense competition.

Every retailer wants a high share of the customer’s wallet because it

will ultimately impact their valuations. Nobody, wants to be seen as

losing market share to a competitor. For retailers, big events represent a

big sales surge; therefore, accessing the shopper spend becomes most

important as it will bring a jump in the GMV (Gross Market Value) and

enable higher customer acquisitions.

While the economy continues to be sluggish, the impact is felt more in

general trade where growth is tapering whereas we see a revival of sorts

in modern trade. The edge that modern trade has over general trade at

this point in terms of convenience, proximity and promotions needs to

be leveraged to ensure that greater business and growths can be juiced

for this format in the future as well. Big events are an ace in the modern

trade retailer’s pack, which they need to harness better to truly stand

apart from the crowded general trade market.

FOR SHOPPERS SEIZED BY ASPIRATION AND INSECURE ABOUT THEIR WELL-BEING, MODERN TRADE IS AN INDULGENCE THAT IMPARTS A SENSE OF PROGRESS.

ABOUTTHESTUDY

The findings for the Big Events paper are based on the Modern Trade Scantrack data, which is conducted across 12 key

cities namely Mumbai, Delhi, Chennai, Bangalore, Pune, Hyderabad, Indore, Kochi, Surat, Vadodara, Vijayawada and

Visakhapatnam. Scantrack data for the past two years during Republic Day, Independence Day, Labour Day, Gandhi

Jayanti and Diwali was analysed to arrive at the findings. The time period taken into consideration is from June 2014 to

May 2016.

ABOUTSCANTRACK

Scantrack® enables manufacturers and retailers to examine key business trends by product, category and market using

scanner-based sales information gathered weekly from key modern trade chains.


BANUPRIYA SUDHAKAR

DIRECTOR

NIELSEN INDIA

PALLAVI SURESH

ASSOCIATE DIRECTOR

NIELSEN INDIA

ABOUT THE AUTHORS

ABOUT NIELSENNielsen Holdings plc (NYSE: NLSN) is a global performance management

company that provides a comprehensive understanding of what consumers

watch and buy. Nielsen’s Watch segment provides media and advertising

clients with Total Audience measurement services for all devices on which

content — video, audio and text — is consumed. The Buy segment offers

consumer packaged goods manufacturers and retailers the industry’s only

global view of retail performance measurement. By integrating information

from its Watch and Buy segments and other data sources, Nielsen also

provides its clients with analytics that help improve performance. Nielsen, an

S&P 500 company, has operations in over 100 countries, covering more than

90% of the world’s population.

For more information, visit www.nielsen.com.

Copyright © 2017 The Nielsen Company. All rights reserved. Nielsen and

the Nielsen logo are trademarks or registered trademarks of CZT/ACN

Trademarks, L.L.C. Other product and service names are trademarks or

registered trademarks of their respective companies.

Abbie Paul from the Nielsen Retailer Vertical contributed to this issue

of Featured Insights.

featured insights - nielsen · 2019. 5. 29. · 15 w3215 w3315 w3415 w3515 w3615 w3715 w3815 w3915...

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