FMCG off to a good start in China
Kantar Worldpanel’s latest figures for 12 weeks ending 25st January 2019 reveals that consumer spending on FMCG in China made a good start to the year. There was a value growth rate of 7.7% compared with the same period in the previous year, which was positive on the run-up to Chinese New Year. E-commerce maintained robust development after the Singles’ Day shopping festival in November, while modern trade also showed signs of recovery with growth of 4.7%.
Among the top five modern trade retailers, Yonghui outshone its peers and achieved a fast growth rate of 18.2%, driven by enlarging its buyer base and encouraging bigger shopping baskets. In December 2018, Yonghui opened its Mini Concept store in Fuzhou to tap into the opportunities of selling fresh produce and other basic staples usually stocked by community stores. This featured a partnership with JD to deliver to homes within 30 minutes. The new store format is expected to expand to more cities in 2019.
E-commerce players aggressively showcased their strengths in merchandise and online to offline delivery to fulfil shoppers’ needs to stock up before CNY. In the past 12 weeks, 57% of urban Chinese families bought FMCG online. It is noteworthy that lower tier cities showed a great improvement in e-commerce penetration from 45% to 54% thanks to the continuous education by the key e-commerce giants. The latest results show that Alibaba group progressed fastest in winning new shoppers.