RT-Mart gained strength in 2010 while Carrefour faces...
The Walmart Group remains that largest modern trade retailer in the latest quarter taking a share of 7.5% and reaching 18.4% of Chinese households.
Kantar Worldpanel, the global market leader in consumer purchasing and usage insights, reported 16% growth for the FMCG (Fast Moving Consumer Goods) market for the full year of 2010 compared to 2009, driven by a mixture of consumption growth and price inflation. As modern trade continues to evolve and shoppers are visiting international retailers such as Carrefour and Walmart more regularly, RT-Mart, a Taiwan-based hypermarket chain operator, emerged as a winner in 2010, reporting 6.1% value share* within modern trade (hypermarket and supermarket combined) over 40 weeks to Dec 31st, 2010.
Walmart group remains in front, while Carrefour struggles
The Walmart Group remains that largest modern trade retailer in the latest quarter taking a share of 7.5% and reaching 18.4% of Chinese households. With Walmart and Trust-mart combined, the group holds an advantage over CR Vanguard at 6.7% in the latest quarter but this leadership position has been eroded down from pervious quarters. When split between the two banners it is clear that the Walmart branded stores have remained consistent, outperforming the modern trade sector over the last three quarters and the challenges with integrating Trust-Mart is the key area where share was being lost. Trust-Mart saw its share drop from 3% to 2.2% from Q3 to Q4.
The French retail giant Carrefour continued to struggle with its performance in 2010, showing stagnant share trend in the last three quarters, according to Kantar Worldpanel China. Faced with intensified local competition, Carrefour started to retrench in some cities by closing poorer performing stores.
RT-Mart keeps expanding its foothold in lower tier cities, but will face growing competition from its rivals
At an individual fascia level, RT-Mart is the biggest retailer in China with a share of 6.2% in Q4 2010. Traditionally strong in lower tier cities, RT-Mart continues to strengthen its leadership position within Prefecture and County level cities. In January 2011 alone, 7 out of the 10 new stores opened by RT-Mart are located in prefecture level cities or county level cities.
However as the market attention shifts inland and towards these untapped city tiers, both local and multi-national retailers have begun to aggressively focus resources on these territories. Whilst RT-Mart holds a clear advantage as number 1, the fragmented nature of the market still offers clear opportunities for competitors to enter without the challenge of a significantly dominant retailer, a situation that is reflected in a lot of western markets.
CR-Vanguard and Zhongbai outperformed other local players
CR-Vanguard, while continuing its expansion into the high-end sector with its Ole premium brand in key cities, maintained its strength in the mass market by opening more than 400 stores across the country in 2010. Zhongbai, another key local player based in Hubei, also reported 0.3% share point gain in Q4 by accelerating its store opening in Hubei and nearby provinces. Both benefited from their aggressive low tier city expansion strategies.
The Kantar Worldpanel Retailer Flash, which provides quarterly analysis of key retailers by region and city tiers in China, is now available for subscription. The report, based on continuous tracking of consumer grocery purchases by 40,000 representative households in urban China, allows FMCG manufacturers to closely monitor market movement and formulate fact-based key account strategy.
Notes to the Editor:
Kantar Wordpanel China continuously measures household purchases over 100 product categories including cosmetics, food and beverages and the toiletry/household sector. Its national urban panel covers 20 provinces and four municipality cities (Beijing, Tianjin, Shanghai and Chongqing).