FMCG Consumption is Back To Growth under Stay Put call
According to Kantar Worldpanel, in the latest 12 weeks ending on February 26, 2021, sales in China's fast-moving consumer goods (FMCG) market increased by 8.1% year-on-year. Even when compared with the same period in 2019 (before the outbreak of the COVID-19), the FMCG market achieved 4.0% growth, indicating that China's FMCG market has recovered well.
Although there were fewer social gatherings over the Spring Festival this year compared to normal, due to advise from the government to ‘stay put’, the overall market remained unabated. Many categories have resumed their growth trend, driven by the rising needs for quality and enjoyment from the people who did not travel. For example, beverage and dairy products have achieved double-digit growth in the past 12 weeks.
Fewer people travelling to their hometowns during the Spring Festival meant that the population outflow from Key & A cities decreased and this resulted in the value of the FMCG market in Key & A Cities increasing by 7.7% in the past 12 weeks.
The sales value of modern trade (including hypermarkets, supermarkets and convenience stores) in the last 12 weeks was very stable compared to last year with an increase of 0.1%, and has decreased by 2.6% compared with the same period in 2019. Among them, the sales of hypermarkets and large supermarkets fell by 2.4% year-on-year, while small supermarkets and convenience stores continued to grow at 7.3% and 10.7% respectively. The habits of shopping close to home, which many consumers formed during the pandemic, have continued this year.
Among the top retailers, Sun Art Group still ranks the first with a market share of 9.0%. Driven by the dual growth of traffic and trip spend, its market share in the past 12 weeks has increased by 0.6pt. compared to last year.
Data source: Kantar Worldpanel China.
In addition to transforming its offline stores, RT-Mart's online business also contributed significantly to its sales growth. According to the announcement issued by Sun Art Group in February this year, starting from May 2020, the average daily orders of its online platform exceeded 1,000.
On the other hand, Yonghui Group has also grown rapidly. In the past 12 weeks, its share has increased by 0.5pt. year-on-year. The group has accelerated its pace of expansion, consolidating its lead position in the western region with a growth of 1.5pt.
Among the regional retailers, Wu-mart group, Bubugao group, and SPAR Group continued to grow their share, all achieving double-digit growth.
E-commerce has continued to maintain a rapid growth of 35.4% in the past 12 weeks, and the habit of online shopping did not diminish even with the pandemic under control. In lower-tier cities in China, 71% of households have now purchased FMCG through e-commerce during the past 12 weeks, which is a significant increase in the scale of this channel.
Among the top e-commerce platforms, Alibaba (Taobao+Tmall) is still the largest platform with a market share of 44.6% (a year-on-year increase of 1.1pt.).
It is also worth highlighting the penetration of Pinduoduo in the last 12 weeks which has reached 25.5%, which means that just over a quarter of urban households in China have purchased FMCG on Pinduoduo, demonstrating strong growth momentum. According to the 2020 financial report just published by Pinduoduo, by the end of 2020, the number of annual active buyers of Pinduoduo has reached 788.4 million, a year-on-year increase of 35%, meaning that is has become the e-commerce platform with the largest user base in China.
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