‘Boom’ led to ‘substantial’ increase in household appliances, vehicles – Nielsen
View(s):A “boom in consumerism” locally has resulted in “substantial” increases in household appliance ownership and motor vehicle purchases in 2015, according to the “2015 Consumer and Retail Trends Sri Lanka” Report, issued by market research firm Nielsen at the end of March 2016.
In terms of cars and vans registered in 2015, there were almost 150,000 registrations, which was a two and a half times increase over 2014.
Further, the Nielsen report also concluded that the “opportunities for online communication and consumer engagement have increased with 3.5 million internet users, up 25 per cent from two years ago as a result of smartphone penetration”. It also emerged that, within the 15-60 age range, 27 per cent used in the Internet in 2015, an increase of 25 per cent from 2013, while 70 per cent of all Internet users were aged between 15 and 35 years old.
An additional conclusion was that the Fast Moving Consumer Goods (FMCG) sector, which encompasses products from toilet cleaners and kitchen washing liquid, to even personal care toothbrushes and deo sprays, etc., had a “likely” positive outlook for 2016 due to an increase in demand in premium brands. On the other hand, it was also revealed that a “gradual shift by FMCG consumers to considerably higher value large packs from medium sized packs could slow down price led revenue growth”. Elaborating even more, the report signalled that there was 11 per cent growth in premium segment, while low price segment was seen to be stagnant. It was also revealed that all FMCG growth was in general trade, with increases being volume driven rather than a result of higher prices.
Meanwhile, in terms of what is in store for this country in 2016, Nielsen opined that the “outlook appears to be mixed. Country downgrade by Fitch could impact interest rates for foreign borrowings, and higher VAT could dampen consumer spend. However, if inflation and interest rates remain low, and Sri Lanka’s balance of payments deficit improves (with the expected return of GSP+ and opportunities for tea exports to Iran, as well as increased foreign currency earnings from tourism growth), and a more stable Sri Lankan Rupee could well continue to sustain strong growth in consumerisation during 2016”. -(JH)