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New Retail Transformation Enabled growth in China



New Retail Transformation Enabled growth in China

Kantar Worldpanel’s latest figures for 12 weeks ending 9th August 2019 shows consumer spending on FMCG in China reported a robust growth of 6.4% in value, thanks to increased frequency and basket value. eCommerce continued to outstrip total FMCG growth, while modern trade also rebounded slightly by 1.9% in sales value. Lower tiers cities outpaced top tier cities, with over half of the households shopping online in the past 12 weeks, up 10 points in penetration compared with last year.0923-en.png

Sun-Art Group maintained its leading position and grew by 2.8% in sales value compared with same period last year. Lower city tier was its strong recovery engine and recorded both sales and penetration growth.  With its transformation empowered by Alibaba, including digitalization of its stores and fulfillment systems, and Taoxianda O2O service, RT-mart has strengthened its online business and improved the efficiency of physical stores. RT-Mart also restructured their offerings by strengthening fresh foods and imported products display to meet the needs of middle-to upper-tier consumers. In addition, Sun-Art accelerated the convergence of its two banners at the end of 2018, where the Auchan brand is also able to leverage services and technology capabilities from the broader Sun-art infrastructure.

The eCommerce channel continued to deliver robust growth of 36%, with 58% of households in urban China purchasing FMCG online over the last 12 weeks. Alibaba made great progress and increased over 10 ppts in penetration, especially in lower tier cities. It demonstrated the success of their initiatives to cater to a broader base of users, such as using simpler interfaces for first-time or less frequent user from less developed areas. In addition, Alibaba is dedicated to explore different store formats to cover all the food consumption scenes, such as Hema Mini to target suburban citizens and Hema pick’n go to target white collars’ breakfast and snacking occasions. Kantar worldpanel reported that young family contributed nearly 50% of Hema’s sales and they shopped in Hema at an average frequency of 3 times in past 12 weeks.

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Managing Director, Great China


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