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

DELIVERING CONSUMER CL ARIT Y

U N D E R S TA N D I N G
I N D I A S F M C G
SHOPPER
A CLOSE LOOK AT WHAT MOTIVATES
PURCHASE OF FMCG PRODUCTS IN INDIA
BY: DOLLY JHA, EXECUTIVE DIRECTOR, NIELSEN INDIA

WORD-OF-MOUTH IS A KEY SOURCE OF

AWARENESS FOR 60% OF INDIAN SHOPPERS
ONE IN EVERY THREE MODERN TRADE
SHOPPER GOES ONLINE TO GET INFORMATION
BEFORE MAKING A PURCHASE
SHOPPERS BUY MORE THAN THEY PLAN TO
WHEN STORES FEATURE PROMOTIONS
The Indian economy has been fuelled to a large extent by the growth
of fast-moving consumer goods (FMCG), which form its fourth-largest
sector. While growth prospects are abundant for the FMCG sector, failing
to identify true demand may stem expansion. Changes in consumer
needs, weak consumer sentiment and inflation may further impact the
sectors chances of attracting and retaining customers. So with those
potential headwinds in mind, its important for brands and retailers to
listen to what shoppers have to say about their needs, preferences and
attitudes.

1
Copyright 2014 The Nielsen Company

MODERN TRADE: WATCH THIS SPACE

Over the last half a decade, Modern Trade has seen increased acceptance
with the proportion of urban shoppers regularly visiting Modern Trade
going up by 2.5 times to 44 percent today. Moreover, this channel
garners the maximum share of wallet for more than 1/4th of shoppers.
As a result, Modern Trade contributes to 10 percent of FMCG sales for
urban India and has grown at par with the overall market over the last
year.

MORE PEOPLE, MORE SPENDS AT MODERN TRADE

2007

2013

I VISITED MT IN LAST 1 MONTH

18

44

I SPEND MOST OF MY MONEY AT MT

12

27

Figs. in %
Source: Nielsen

TO BUY OR NOT TO BUY

A recent Nielsen study, conducted among urban affluent modern trade
shoppers, found that word-of-mouth still drives a significant percentage
of shopper decisions, especially among elders. Approximately three
in five shoppers say they become aware about products through
information spread by word-of-mouth. Shoppers not only asked about
the store they should visit, but they also sought input on the range of
products to buy.

FEATURED INSIGHTS | UNDERSTANDING INDIAS FMCG SHOPPER

ASPECTS CHECKED BEFORE GOING TO STORES

OVERALL

MALE

FEMALE

99

STORE TO VISIT

92

RANGE

PRICING/ OFFERS

86

NEW LAUNCHES

85

BASE

-6

-5

-7

485

228

Figs. in %

257
Numbers indicate difference from average

Source: Nielsen

Friends, colleagues and family members are the most important

sources of awareness about FMCG products among respondents of all
age groups, especially the older shoppers. Men seem to have more
touch points, the study indicated.

OVERALL

20-29 YRS

FRIENDS/ COLLEAGUES

46

FAMILY MEMBERS

42

NEWSPAPER

40

22

TV
LAUNCH ACTIVITY IN MALL

16

HOARDINGS/ BANNERS

16

INTERNET BROWSING

BASE

672

40 YRS & ABOVE

-1
1

10

-5

15

-1

0
3

35

MAGAZINES

SOCIAL MEDIA LIKE

FACEBOOK, TWITTER

-4

30-39 YRS

-2

1
0

-1
3

-1

-2

-1

0
-3

1
330

342

Figs. in %
Source: Nielsen

Copyright 2014 The Nielsen Company

Numbers indicate difference from average

RECOMMENDATION LEVELS
The study showed that one in every two shoppers across age groups
visit their regular stores to make grocery purchases. Women shoppers,
regardless of age, were found to be more loyal to the store they usually
visit. Recommendation for regular store was found to be higher
amongst older shoppers.
3.9

31

39

4.2

4.4

51

52

28

22
29

34

8
1

TOTAL

BASE: Visited Regular Store

3.8

326

23

35

25

20-29 YRS

13
1

30-39 YRS

40 YRS &
ABOVE

163

60

NOT AT ALL (1)

104

Figs. in %
Source: Nielsen

HIGHLY LIKELY (5)

GOING DIGITAL
We also found that one in every three shoppers goes online before they
go to a physical store and make an FMCG purchase. The study also
indicates that men are more likely to rely on the Internet for purchase
information.

RETAILERS SHOULD THINK BEYOND PROMOTIONS

AND SHOWCASE PREMIUMNESS/VARIET Y

FEATURED INSIGHTS | UNDERSTANDING INDIAS FMCG SHOPPER

PRE-PURCHASE ACTIVITIES
OVERALL

20-29 YRS

CHECK WITH FRIENDS/ COLLEAGUES

52

CHECK WITH FAMILY MEMBERS

48

-1

READ REVIEWS ON FACEBOOK

READ OTHER ONLINE REVIEWS

-4

23

LOOK FOR DEALS IN THE NEWSPAPER

40 YRS & ABOVE

-7

33

INTERNET SEARCH

30-39 YRS

21

-1

-2

-2
3

-2

1
0

-4
-1

Figs. in %
Numbers indicate difference from average

Source: Nielsen

VARIET Y MORE APPEALING

79

Premiumness and variety supersede promotions as key reason to visit

a store. Older shoppers seek assurance across key store parameters of
variety, promotion, new launches.

REASONS FOR SELECTING A STORE

OVERALL

20-29 YRS

51

GREATER VARIETY OF PRODUCTS

GOOD/ LOTS OF PROMOTIONS

40

LOCATION - CLOSE TO HOME

39

FIRST TO HAVE NEW PRODUCTS

37

GOOD LOYALTY REWARD PROGRAMME

18
9

GOOD CUSTOMER SERVICE

672

40 YRS & ABOVE

-7

17

-4

0
2

-5

13
6

-8
1

7
1

-2

-1

1
212

-5

-2

25

LOWEST PRICES

BASE

52

HIGH QUALITY, PREMIUM PRODUCTS

30-39 YRS

340

-3
3
-4
117

Figs. in %
Source: Nielsen

Copyright 2014 The Nielsen Company

Numbers indicate difference from average

TOPPING UP
So how much are consumers shopping? As it turns out, consumers
are doing slightly more top-up shopping than primary shopping.
The top-up shopping trips for FMCG could be combined with other
activities such as eating out or be done while getting back home from
work. On the other hand, consumers are less likely to combine primary
shopping trips with other activities. Some shoppers, however, said
theyve resorted to emergency shopping while going out for a meal.
We found that young shoppers help make emergency trips while elders
are more involved in bulk purchases.

THE TOP THREE REASONS FOR BUYING

MORE THAN THEY PLANNED ARE:
1.

THE CONSUMER REALISED

THAT HE NEEDED THE PRODUCT

WHEN HE SAW IT AT THE STORE

2. THE CONSUMER BOUGHT A BRAND

TO TRY IT OR DECIDED TO TRY A

NEW PRODUCT.

3. THE CONSUMER MADE A

IN-STORE TRIGGERS DRIVING

UNPL ANNED PURCHASES

PURCHASE BECAUSE THE

STORE OFFERED PROMOTIONS

OR DISCOUNTS.

The study revealed that almost 90 percent of shoppers bought more

than they had planned, with 1 in 4 shoppers stating promotions as the
trigger for the same.

CATEGORY BEHAVIOUR

FRESH

HOME
CARE

PERSONAL
CARE

PROCESSED
FOOD

STAPLES

% BOUGHT

92%

94%

89%

84%

87%

% BOUGHT MORE
THAN PLANNED

91%

87%

81%

82%

80%

Source: Nielsen

Discounts and promotions have led a large percentage of shoppers (over

50%) to experiment and buy a different product. Discounts had more of
an impact on older shoppers, the study findings suggested. Moreover,
men were found to be more likely to be swayed by promotions.
The Nielsen findings proved the need for companies to build their
brands online. They should also zero in on core shoppers. Additionally,
FMCG brands not only need to focus on making premium and quality
products, but also improve in-store experience. Effectively implementing
these would go a long way in helping brands differentiate in the crowded
Indian FMCG market.

KEY LEARNINGS:

DEVISE AN EFFECTIVE
BRAND BUILDING PLAN
ONLINE

MOVE FROM INCENTIVES

TO EXPERIENCES: MISTIME
YOUR PROMOTIONS

FOCUS ON YOUR OFFLINE

NETWORK AS WELL

FEATURED INSIGHTS | UNDERSTANDING INDIAS FMCG SHOPPER

ABOUT THE AUTHOR

DOLLY JHA,
EXECUTIVE DIRECTOR,
NIELSEN INDIA

Punit Mittal from the Nielsen Shopper team contributed to

this issue of Featured Insights.

ABOUT NIELSEN
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and
measurement company with leading market positions in marketing
and consumer information, television and other media measurement,
online intelligence and mobile measurement. Nielsen has a presence
in approximately 100 countries, with headquarters in New York, USA
and Diemen, the Netherlands.
For more information, visit www.nielsen.com.
Copyright 2014 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.

Copyright 2014 The Nielsen Company

FEATURED INSIGHTS | UNDERSTANDING INDIAS FMCG SHOPPER