30-04-2017, 08:03 AM
Literature review of demonetisation effect on FMCG
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literature review of demonetisation effect on FMCG
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Literature review of demonetisation effect on FMCG
01-05-2017, 04:01 PM
Demonetization has had a severe impact on the consumer goods industry. And, his hope for a recovery after a good monsoon seems unlikely today.
The fast moving consumer goods (FMCG) sector is expected to fully recover from the blow that was taken after demonetization at the end of this fiscal year, Vivek Gambhir, MD, of Godrej Consumer Products Ltd (GCPL), said on Wednesday.
"We are pleasantly surprised by how things are recovering. Our expectation is that in 4-6 weeks the industy FMCG should return to full normal. At the end of the fourth quarter there will be full recovery," Gambir said in an interview with BTVi.
"As many of us saw that posting the demonetization announcement, a few weeks after November 8 were very bad, but the pace of normalcy was positive in December. Things are in the right direction," he added.
In December, the company postponed spending, but aims to increase it in the fourth quarter to support all its products, Gambhir said.
"The biggest slowdown has been in the rural sector, hoping for a recovery in rural demand, which has derailed due to demonetization, but we hope that it will soon recover," he added.
As a positive effect of demonetization, there is a movement towards the formal economy and organized national actors, Gambir said.
"The regional actors, who are not organized, will find themselves increasingly challenged and with the Goods and Services Tax (GST) they will find it more difficult to avoid indirect taxes," he added.
Generally speaking, when consumers are limited by cash, it affects demand. "But the recovery in demand is beginning to have a positive impact, and we hope we can see the benefits sooner," Gambir said.
He said that although modern trade has done well after demonetization, but can not compensate for the wholesale channel that is nourished cash.
The south and west of India have been tougher, but the impact is more in East India, which is driven by money-driven major, he said.
"But for the wholesale also the expectation is that things should return to normal in 4-6 weeks. For us 40 percent dependence is on wholesale traders," he added.
In GST, he said that although the April 1, 2017, deadline seems difficult at this stage, hopes are that it will be passed on September 16 of next year.
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