Evolving behaviors in a challenging environment
Penetration continued to be the key indicator of market share
This is the third year Bain & Company has partnered with Kantar Worldpanel to study the shopping behaviors
of 40,000 Chinese households. Our unconventional approach equipped research participants with barcode scanners to track what they purchased, as opposed to what they said they had purchased.
Our China Shopper Report 2014, Vol. 2 confirms the findings of prior reports, while shedding new light on key behavior patterns at a time when China’s consumer markets are rapidly changing. We studied 106 fast-moving consumer goods (FMCG) categories and analyzed in more detail the same 26 categories as in previous years spanning the four largest consumer goods sectors—personal care, home care, beverage and packaged food that account for more than 80% of China’s FMCG market in value.
These 26 categories are:
• Packaged food: Biscuits, chocolate, instant noodles, candy, chewing gum and infant formula
• Beverage: Milk, yogurt, juice, beer, ready-to-drink (RTD) tea, carbonated soft drink (CSD) and bottled water
• Personal care: Skin care, shampoo, personal wash, toothpaste, color cosmetics, hair conditioner, baby diapers and toothbrushes
• Home care: Toilet tissue, fabric detergent, facial tissue, kitchen cleaner and fabric softener
Our approach helped us gain valuable insights into how shoppers make purchases in these 26 important consumer goods categories and develop strategies for marketers to successfully win Chinese shoppers.
For the third year, we carried out identical analysis of the same 26 categories. On balance, shoppers demonstrated the same behaviors across these 26 categories and shopper trends remained consistent over the last three years,even as growth in China’s FMCG market continued to slow, while digital was developing rapidly.
Purchase frequency, the number of purchases per household per year, was similar by category for each of the three years, remaining low overall. The position of categories along the repertoire-loyalist continuum was also similar.
Penetration continued to be the key indicator of market share, ahead of purchase frequency and repurchase rate.
Overall shopper behavior remained stable over the past three years; not surprisingly, however, some category
leaders failed to sustain their position and lost it to others.
Generally, brand rankings changed dramatically among the top 10 brands in most categories. There were winners and losers. The winners adapted themselves to actual shopper behaviors, rather than try to change those behaviors.