Wal-Martís share growth accelerates in China
The consumer spending on FMCG grew by 2.4% in China, experiencing further slowdown.
Kantar Worldpanel’s latest figures for China in the 52-weeks ending 20 May 2016 show that consumer spending on FMCG grew by 2.4%. When considered against the growth of FMCG in China for the previous year, which was 5.1%, it is clear that the FMCG market is experiencing further slowdown.
Despite this, the West region continues to gain importance. Its share has increased from 16.0% for the 52-weeks to 15 May 2015 to 16.8% for the 52-weeks to 20 May 2016. Its gains have mainly squeezed the share of the East region, which dropped from 28.6% to 28.0% for the same time periods.
Growth in the West region is mainly driven by increased spend per trip and urbanization. The spend per trip for shoppers in the West region grew by 4.8% in the 52-weeks to 20th May 2016, and was even faster than the growth recorded in the previous year. However, there remains much more room for growth for trip spending in the West region. The 104 RMB per trip is still much lower than the East (123 RMB per trip) and the South (112 RMB per trip) regions. Retailers in the West also benefitted from faster urbanization, which accelerated the growth in this region.
Wal-mart and Yonghui are growing relatively strongly in the West region. Wal-Mart further strengthened its leading position, with its share growing from 5.7% in 2015 to 6.4% in the 52-weeks to 20 May 2016. While Yonghui is catching up fast and overtook Vanguard to become the number two retailer in the West region. Yonghui’s share grew to 4.9% in the 52-weeks to 20 May 2016, compared with 3.6% last year.
The performance of Sun-Art Group has been stable in the most recent months, while its performance in the East region has been outstanding. Spending in the East region grew 10.4% in the 52-weeks to 20 May 2016, while total FMCG in the East region grew 0.3% in the same period. Sun-Art also managed to grow penetration at a National level. While other retailers have struggled and had to close stores, RT-Mart has managed to keep all its existing stores whilst also opening new ones.
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