Asia Pulse #2: Q1 2021
The economy continued to recover across Asia during the first part of 2021, with growth witnessed in many markets. FMCG spend in the APAC region was up 5.0% in the first quarter, which is higher than the increase of 3.4% we saw in Q1 of last year.
The food sector continues to lead market growth, doubling its value gain from 3.1% in Q1 2020 to 6% in 2021. The dairy category has seen a particularly strong upward movement in its growth rate during the first quarter, up 5.1% from 2.4% the previous year. In line with the positive performance of the overall FMCG market, the beverages sector has experienced a rebound, achieving value growth of 3.5% compared to a drop of -0.1% the year before. In contrast, a slowdown in growth was observed across the non-food sectors.
Reviewing the performance of each market in depth, the report reveals some key insights:
- Chinese Mainland: The National Bureau of Statistics has released year-on-year GDP growth figures of 18.3% for the first quarter of 2021. With the pandemic under effective control and the economy getting stronger, the FMCG market here has been recovering very well.
- Taiwan: In Q1 of this year ecommerce powered up to become the channel with the third highest FMCG value share in the market, with spend growing 13% thanks to a double-digit increase in the total number of online shops. This indicates that Taiwanese shoppers are getting used to purchasing FMCG products online.
- South Korea: COVID-19 has had a noticeable impact on consumers’ FMCG baskets. Shoppers have spent more on home-cooking categories, such as cooking oil and sesame oil, with major growth coming from the online channel. In contrast, the cosmetics market is declining, mainly driven by the decrease in both frequency and volume per trip as people wear less make-up.
- Indonesia: Shoppers are rationalising their FMCG spend, while maintaining the same number of shopping trips. With continued restrictions on outdoor activity, households are opting for higher in-home consumption and bigger packs to manage their budgets.
- Malaysia: Online and supermarkets have been the biggest winners during the pandemic. But while online gained spend from an increase in number of trips and penetration, supermarkets mainly benefited from higher spend per trip, in addition to increased penetration.
- Thailand: Since the last quarter of 2020 the government has launched various subsidy programmes designed to provide Thai shoppers with more financial support. This is encouraging them to spend more, which helped the take-home FMCG market to grow by 2.9% in Q1 of this year.
- Philippines: The country’s GDP is still contracting, which indicates that recovery might prove to be more challenging than originally expected. Filipinos continue to reduce their in-home FMCG spending, however, the food sector remains resilient as shoppers’ top priority.
- Vietnam: Economic growth has recovered during Q1 of 2021, and this trend is coupled with an improvement in consumer confidence. The online channel is increasing its share of retail value, outstripping more established channels in both urban and rural areas.