Asia Pulse: Q2 2023
During the second quarter of 2023, the FMCG sector in Asia displayed robust growth, registering a 2.6% value increase. Despite supply chain disruptions and uncertainties across all markets, the industry has shown remarkable resilience, charting a positive upward trajectory.
This latest report presents a comprehensive overview of the in-home FMCG sector in the Asia-Pacific region. Our analysis delves into individual markets, providing valuable insights into their performance. Discover the growth stories of each country, as we explore some of the highlights.
- Chinese Mainland
In the first half of 2023, e-commerce continued to develop steadily, with the highly competitive landscape undergoing accelerated changes. Traditional e-commerce platforms struggled to grow, while interest e-commerce remained in rapid growth.
As the pandemic subsided, out-of-home (OOH) food service grew substantially while the FMCG food category weakened. People resumed social activities, triggering greater demand for personal care, especially cosmetics – making the category FMCG’s main driver in Q2.
Consumers are shopping more frequently, with food and beverages driving the rise in trips. The increase in shopping occasions is being led by the e-commerce channel. As a result of making more trips, shoppers have started experimenting with brands, and their average pack sizes have shrunk.
- South Korea
Due to an uplift in average price, the FMCG market continued to show an increase in value along with a downturn in volume. Meanwhile, thanks to a weakening downtrend of shopping frequency, the decline in volume slowed in Q2 compared to MAT Q2’23.
- United Arab Emirates
A balanced interplay between costs and consumption, along with a thriving property market and growing demand in the non-oil sector – including FMCG – bodes well for the UAE’s economy.
The country’s strong and resilient economy is reflected in a slower inflation rate of 3.5%, combined with steady consumer confidence. FMCG growth during this year’s festive season was at its slowest for five years, but the uplift remained high.
Modern trade is growing strongly, mainly mini markets, which continue to attract shoppers due to their convenience and better pricing. The fastest-growing channel is drug and pharmacy, driven by an influx of shoppers.
Convenience stores continue to grow, as consumers shop for in-home FMCG through this channel due to its proximity, attractive promotions, and convenience. On the other hand, local channels experienced a decline due to the lack of government support programmes during COVID.
The Philippine economy remains in growth, but the pace is slower than the previous quarter, coinciding with higher inflation (7.6%) in March 2023. While the inflation rate is softening, shoppers are expected to remain cautious in their spending.
Although GDP growth picked up to 4.14% in Q2, the economy remains lacklustre. Inflation has cooled down; however, retail sales growth has slowed due to weakened domestic demand from the high proportion of consumers being impacted by rising living costs.
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Note: The Asia Pulse Q2 2023 report excludes Saudi Arabia due to local panel enhancement.