FMCG growth remains soft during Chinese New Year
Kantar Worldpanel’s latest figures, for 12 weeks ending 24th February 2017 in China, show consumer spending on FMCG only grew by 1.4% compared to the same period last year. Modern trade dropped by -0.3% whilst ecommerce grew by 36.1% for the same time period.
Sun-Art and CRV Group’s national share declined slightly, -0.1pt, driven by a fall in shopper traffic. Despite the challenging environment, Walmart and Yonghui Group grew at 1.9% and 13.2% respectively . Elsewhere, local retailers are seeing a softening in their growth performance. But they were still able to capture the Chinese New Year (CNY) opportunity and continued to grow share during this important period for offline retailers.
Ecommerce showed resilience. Many ecommerce retailers are trying to overcome this traditional ‘low’ period and many started to build their delivery capacity during CNY season, especially JD, but also Tmall. They are also doing more promotions during the CNY period, such as the CNY grocer festival and non-stop logistic service in a bid to steal sales from traditional modern trade retailers. With all those efforts, the eCommerce channel maintained penetration at a higher level than previous year’s pre 11-11. In the past 12 weeks, covering CNY), more than one third of Chinese urban households purchased FMCG online, which is 11.2pt higher than same period of 2015.
Local retailers saw a softening growth but were still able to capture well the CNY opportunity.