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February 13, 2019

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FMCG spending steady in Q4, consumers turning on to online

China’s fast moving consumer goods spending rose 4.3 percent in the fourth quarter, a steady pace compared to a year earlier, as weak manufacturing activity and slower fixed-asset investment dampened performance, Kantar Worldpanel said in its latest report.

Western regions and provincial capital cities reported a more upbeat trend than the overall market.

The combined growth of sales through hypermarkets, supermarkets and convenience stores was relatively low at 2.1 percent, with the majority of sales coming from new retail channels such as online shopping sites.

Six of the 10 top retailers tracked by Kantar Worldpanel reported stronger performance in 2018, thanks to the opening of new stores, expansion of format portfolios and digital transformation.

Sun Art Group maintained its leading position with an 8.4 percent share of the market in modern shopping channels, excluding grocery stores in rural areas.

Vanguard Group and Walmart both lifted their market share by 0.2 percentage points thanks to better performance of supermarkets and convenience stores.

Walmart also diversified offerings with its Sam’s Club store and smaller convenience store formats.

Spending through e-commerce channels saw strong growth of 34 percent, with more households favoring online shopping and increasing their purchasing frequency.

In Beijing, Shanghai, Guangzhou and Chengdu, an average of 72 percent of households purchased FMCG online in the past year.

Smooth payment and delivery services also pushed up spending.

The average consumer shopped about nine times for daily necessities and household products through e-tailers.

Kantar Worldpanel also pointed out that retail formats will continue to converge as store operators seek to maximize their foot traffic to cater to shoppers’ demands.

For example, Walmart and RT-Mart are transforming their traditional hypermarkets to compact mode and adding in-store smart facilities so that they can better complete in the traditional territory of supermarkets and convenience stores.

Another trend in the coming year is that consumers are increasingly seeking superior shopping experiences.

Smart technology will continue to help store operators to win shoppers over.

And e-commerce in lower tier cities is a good way for brands to reach more consumers, the study suggests.


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