Upgrading need to lift consumer products
Print Edition
DESPITE growth deceleration in China’s fast-moving consumer goods market, customers’ desire to upgrade to premium products is set to be the sector’s driving force, consumer insight company Kantar Worldpanel said in a report yesterday.
Fast-moving consumer goods refer to food and non-food daily consumer products that are sold quickly and at relatively low cost.
Data showed that following China’s economic slowdown, the rise in volume and value of fast-moving consumer goods both dropped.
But value will outgrow volume by between 8 and 9 percent this year because Chinese consumers are increasingly inclined to buy premium products, the report said.
Among milk products, premium goods — those sold for more than 16 yuan (US$2.58) per liter — accounted for only 26 percent of total sales in 2011. But they rose to 38 percent in 2013.
Premium toothpaste, which refers to over 16 yuan per 100 gram, contributed to 20 percent of total toothpaste sales in 2011 and grew to 26 percent in 2013.
In the biscuits category, premium products — costing over 80 yuan per kilogram — jumped from 15 percent in 2011 to 23 percent in 2013.
This phenomenon is most apparent in dairy product categories where Chinese customers have not fully recovered their confidence in milk, formula, yogurt and butter made in China, Kantar said in a statement.
The fast growth of premium dairy products is mostly contributed by imported UHT milk. They were first introduced in China via foreign supermarkets. The B2C (business to consumer) websites then launched marketing campaigns to sell the imported milk and won customers.
In future, domestic dairy companies — now strong in distributing — will have to compete with imported brands on availability and marketing.
Chinese consumers definitely want to drink better and safer milk and they believe expensive products are better products, according to Kantar.
E-commerce has played an active role in introducing premium products, and it will play a bigger role in the future.
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