Festive sales driven by in-home consumption due to pandemic: NielsenIQ

MALAYSIA and Vietnam are the two top festive spenders this year within South-east Asia, with sales value growth in Malaysia up a whopping 32 per cent. Vietnam follows with a 15 per cent growth.

Unsurprisingly, China is up by 33 per cent, with strong consumer spending on fast moving consumer goods such as food, beverages, alcohol, personal care and household products.

According to NielsonIQ's senior vice-president of intelligent analytics in the Asia-Pacific and Eastern Europe, the Middle East and Africa, Didem Erodogan, spending habits will differ among consumers depending on the financial impact the pandemic has inflicted on them.

"We expect a rise in home cooking, for example, as families avoid crowded restaurants for the reunion dinner. Smaller-sized social gatherings may also impact the sale of alcoholic beverages - with consumers choosing quality over quantity, thereby favouring premium brands," she said.

In Malaysia for instance, where Chinese New Year is the biggest festive event by sales value, Nielsen data over the past three years shows an average 32.2 per cent increase in sales value during the festive period compared to non-festive seasons. 

This has traditionally been driven by items such as beer (up 28 per cent), soft drinks (up 18 per cent) and Asian drinks (up 18 per cent). This year however, gatherings are expected to be smaller in size due to inter-state and inter-district travel restrictions and limits on in-home gatherings. 

A NEWSLETTER FOR YOU

Friday, 8.30 am

Asean Business

Business insights centering on South-east Asia's fast-growing economies.

Sign Up

NielsonIQ's managing director of intelligent analytics in South-east Asia, Luca De Nard, said: “While we anticipate that categories such as beer, chocolates and biscuits may not experience the uplift seen in previous Lunar New Year periods, household cleaning products, hand sanitiser and personal care items should continue to perform well as people are extra cautious on health and cleanliness right now.” 

He added that the sale of gifting categories such as abalone, mushroom, birds nest, chicken essence and liquor will likely move online, and therefore manufacturers and retailers should ensure that they have the right online promotional strategies to capture Malaysia’s rising online shoppers. 

Singapore meanwhile has seen a surge in demand for certain festive products like canned abalone, with a boost in sales by more than 19 times, and chocolate, with a 93 per cent increase in demand.

Due to the pandemic restrictions put in place this year, celebrations will likely be smaller in scale.

With more than 40 per cent of consumers affected by the pandemic according to the Nielsen Global New Shopper Normal Study, more value-for money behaviour can be expected from Singaporeans, such as a preference towards products that offer better value, as well as variety packs.

Mr De Nard said: "It is important for industry players to go to the right stores with the right portfolio and adapt their promotion strategies to cater to consumers in the new normal and drive incremental growth."

With the pandemic affecting retail behaviour of the masses, retailers and manufacturers are rethinking their marketing strategies in order to capture the market during the Chinese New Year.

In Thailand for instance, retailers and manufacturers are taking the opportunity to launch specialised campaigns to promote festive products such as preserved vegetables, boiled poultry, red envelopes, tangerines and prayer candles. 

Sales growth during this festive period has been steadily increasing, with 6 per cent year-on-year growth in 2019, and 13 per cent year-on-year growth in 2020. Growth has been driven by food & beverage categories such as birds nest, spirits, whiskey, seasoned seaweed and chicken essence, as well as household products such as paper wipes.

Notably, the government has been proactively encouraging consumption and travel during this festive season. For instance, the government declared the Lunar New Year a new official public holiday for the first time this year. It also introduced a “Cost of Living Subsidy” for financially disadvantaged Thai citizens.