Market research agency Nielsen is to continue with its stand of not providing services to financial analysts.It was a year ago that Nielsen had suspended services to the analyst community following an uproar by companies over inaccurate reporting of market share data.
The plan was to resume services in a year's time. That has clearly not happened.
Nielsen declined to comment on the issue.
FMCG companies make the bulk of Nielsen's subscribers. While not all brokerages are subscribers to Nielsen's data, the few who are influential. These include Morgan Stanley, DSP Merrill Lynch, Nomura, Kotak Securities and ICICI Securities.
These brokerage firms chose not to comment on the issue. But persons in the know say with no data, most of these firms have had to depend on companies' versions of market shares for a year now. This will continue.
"By no means can we independently verify the data we get from the companies," said an analyst from one of the brokerages.
Companies, in turn, say the move to suspend providing market share data was important given the process of overhaul at Nielsen.
"Analysts benchmark companies based on the data they get from Nielsen. If the data are not positive, the report is unlikely to be positive. This obviously impacts the company under review because people base their judgment on what they read," said an executive with an FMCG company.
Analysts say it is this fear that has led to the present outcome. "I don't see why else data should not be
shared," said another analyst.
Companies for long have been accusing Nielsen of under-reportage and inconsistency in the data it provides and the former's own internal assessment of sales.
The matter reached a head a year-and-a-half ago when companies such as Dabur openly criticised Nielsen, saying there was a huge disconnect between what it was reporting in categories such as hair oils and fruit juices, and their own assessment of sales.
Dabur subsequently discontinued subscribing to Nielsen's data in the above-mentioned categories, as well as in home care. That continues to this day.
"We have seen no change in the last year-and-a-half, which is why we have not revoked our decision in this matter," said a Dabur executive.
Nielsen's retail audit earlier obtained data from roughly 17,000 stores out of a universe of 7.5 million stores. This has now been increased to 24,000 stores of a universe of 8.4 million.
Nielsen has also attempted to include different types of stores such as road-side tea stalls, paanwallas and army canteens besides kirana stores and modern trade outlets, which were being covered by it.
Despite this, pain points remain. A Mahendran, managing director, Godrej Consumer Products said: "While there are no problems with Nielsen's coverage of mature categories such as soaps and detergents, it is with emerging categories such as hair colour that there are issues.
"The reporting accuracy in these categories is dismal. In fact, Nielsen has been open about it that they cannot guarantee reporting accuracy in categories that have less than a 500,000-outlet penetration."
