ACNielsen’s 2005 China Market Information Digest: Fast Moving Consumer Goods |
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Integrating information from ACNielsen’s retail market monitoring, retail audit study and media measurement by Nielsen Media Research, the report is designed to help marketers identify key business opportunities by providing a comprehensive understanding about China’s FMCG market |
CHINA. China’s Fast Moving Consumer Goods (FMCG) sector recorded a +7% increase in sales value in 2004, with 20 out of 30 major categories showing positive growth and 10 of them experiencing double-digit growth, according to ACNielsen’s 2005 China Market Information Digest.
The study is an annual report on key statistics on the China retail market. Integrating information from ACNielsen’s retail market monitoring, retail audit study and media measurement by Nielsen Media Research, the report is designed to help marketers identify key business opportunities by providing a comprehensive understanding about China’s FMCG market.
“Consistent with strong economic performance and increased personal income — and fueled by the growth of modern trade — China’s FMCG sector has been on a fast track over the past several years,” said ACNielsen China Managing Director Glen Murphy.
According to ACNielsen, the 30 major categories tracked by the company on a national base in China , recorded an average +7% growth last year. The report also identified that 20 out of the 30 major categories experienced a positive growth, and 10 out of the 20 categories achieved a robust double-digit expansion. Among them, Yogurt/Yogurt Drink topped the fastest-growing list with a +38% value growth, followed by Hair Conditioners (33%) and Infant Milk Formula (23%).
“With consumers’ increasing preoccupation with personal health, health products are stealing the limelight from other categories these days. This explains why Yogurt/Yogurt Drink has become the fastest-growing category last year,” said Mr. Murphy.
Carbonated Soft Drink (CSD) products continued to dominate the food and beverage category with a sales value of RMB14.5 billion, followed by Instant Noodles, Yogurt/Yogurt Drink, Biscuit, and lnfant Milk Formula. In non-food categories, Shampoo, Skin Moisturizer, Laundry Detergent, Toothpaste and Sanitary Protection products appear to be the top five categories obtaining the largest share of sales value.
“Led by several fast-developing categories, China’s FMCG sector as a whole has been growing at fast rates over the past few years. Yet what we see today is still a developing and highly fragmented market, with different categories at varied stages of development.” |
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Glen Murphy, Managing Director, ACNielsen China |
The development of the modern trade* has been a strong growth driver for most FMCG categories, with a +30% increase in modern trade outlets and +18% growth in FMCG sales value recorded by ACNielsen last year.
Among the 30 categories identified by ACNielsen, the increasing importance of modern trade is best demonstrated by a heavy contribution on Hyper/Supermarket – for 21 out of 30 categories modern trade has contributed over half of the total sales. This trend is especially apparent in categories like Baby Cereal, Tonic Drinks, and Infant Milk Formula, Diaper and Facial Cleanser, where sales of Hyper/Supermarket contributed over 80% of category turnover respectively.
*ACNielsen’s definition of Modern Trade covers Hypermarket, Supermarket, Mini Market and Convenience Store.
“Led by several fast-developing categories, China’s FMCG sector as a whole has been growing at fast rates over the past few years”, said Murphy. “Yet what we see today is still a developing and highly fragmented market, with different categories at varied stages of development.”
However he cautioned: “One should guard against over-generalisation within the China FMCG sector, for fear of becoming intoxicated with these impressive market growth rates.”
ACNielsen’s study showed a great disparity between different FMCG sectors in terms of growth rate, price dynamics, trade distribution, as well as consumption patterns, Murphy pointed out.
“To capture the business opportunities and lead in this market, marketers must make decisions based on an in-depth understanding of the competitive environment and consumer demands in their own sector.”
About ACNielsen
ACNielsen, a VNU business, is the world’s leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behaviour. Clients rely on ACNielsen’s market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.
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