Key retailers enhanced small store type in China
Kantar Worldpanel’s latest figures for 12 weeks ending 19th April 2019 shows FMCG market in China kept a steady performance with non-food category being the main growing engine. Categories related to health, convenience, lifestyle and personal appearance are attracting more buyers. Modern trade (including hypermarkets, supermarkets, and convenience stores) reports lukewarm performance with flat growth, whilst e-commerce continued to outshine with double digit growth of 37%. In terms of regions, China’s West regions enjoyed a healthy growth at 4.2%, whilst growth in the North remainined sluggish.
Small store type serving for residential community has been highlighted in 2019 business plan of many key retailers. Walmart is shifting resource to open more Huisafe which offers value-for-money goods and targets community residents. Yonghui accelerates testing the mini store which features fresh food and frozen food and partners with JD O2O services, as well as providing a wide range of community services such as taking parcel delivery and laundry. The latest Kantar Worldpanel figures confirmed that small supermarket maintained a robust growth of 9.3% and improved both penetration and frequency in the last quarter.
E-commerce’s growth remained at a high level with online penetration reaching 51.8% in the latest 12 weeks, up by 10 points compared to the same period last year. JD announced to sign a new three-year contract with Tencent who promised to support driving traffic through WeChat and deepen cooperation in membership program. In the latest three months, JD showed an improvement in penetration compared with last year.