China’s FMCG market continued to show signs of recovery
Kantar Worldpanel’s latest figures for 12 weeks ending 15th May 2020 reveals that consumer spending on FMCG in China recorded value growth of 1.8% compared with the same period last year, suggesting a steady recovery post the outbreak of COVID-19. In the latest 4 weeks, the total FMCG market achieved a robust growth of 4.6% in value. All regions showed a similar recovery trend, though the East and West regions led the rebound. Home care categories continued their strong growth with the dairy and personal care sectors showing strongest recovery trends.
Modern trade (including hypermarkets, supermarkets, and convenience stores) fell by -1% in the latest 12 weeks compared with last year. RT-mart maintained its leading position, posting a market share of 7.2%. Despite a loss of shoppers over the past year, Wal-Mart started to show steady recovery on the back of opening of more smaller community stores which are more focused on fresh produce and delivery services. With a reduced range of 3,000 SKUS, Wal-Mart’s community stores expanded the share of pre-packaged fresh food to 50% across all ranges. Amongst the regional players, the Bubugao group achieved an unprecedented growth rate of 8.7% in the latest 12 weeks, driven by enlarging their buyer base. The retail group also fully leveraged their mini programs to attract more online traffic to help build their omni-channel offer.
E-commerce maintained its strong performance with a value growth rate of 42.0% in the last 12 weeks. The strong growth was contributed by consumers in both upper tier and lower tier cities.
Among the top E-commerce players, Alibaba and JD consolidated their leading position with more shoppers using their services. In the past 12 weeks, Alibaba reached a national penetration of 44.6%, 43% higher than last year. E-commerce players are gearing up for the 618 shopping festival and will be hoping to maximize their sales through aggressive promotions and livestreaming events which started at the beginning of June. It is worth noting that the penetration gap between JD and Pinduoduo has been continuously narrowing. Pinduoduo’s penetration in FMCG more than doubled in the last year, with more brands setting up stores on the platform to allow consumers to make group purchases at a discounted price.