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FMCG giants grow in China
BEIJING: Some 15 companies in the FMCG sector now reach over 100m households in China, a group including local players such as COFCO and Master Kong, as well as foreign firms like Nestlé and Coca-Cola.
Kantar Worldpanel, the insights provider,
that goods made by Procter & Gamble, the FMCG giant, were bought by 156m urban Chinese households during the year to October 5, 2012, up from 151m over the previous 12 months.
The US multinational now has a penetration of 97% across the 162m urban homes in China, based on Kantar's data from 20 provinces and the cities of Beijing, Chongqing, Shanghai and Tianjin.
Jason Yu, the general manager of Kantar Worldpanel China, said: "The key to successful growth for manufacturers in the complex China market is closely tied to the success of attracting buyers to their brands more than anything else."
COFCO, a Chinese firm trading in sectors from packaged food and snacks to beverages and dairy, delivered a 93% reach, equating to 150m residences, a 5m jump on an annual basis.
Master Kong, also known as Tingyi, enjoyed a similar level of improvement, taking it to 147m households. It makes a popular range of noodles, alongside baked goods and soft drinks.
Nestlé, the Swiss packaged food manufacturer, attracted new buyers from 8m homes, to hit a total to 145m. Yili, the dairy specialist, gained a presence in an additional 6m residences, on 139m.
Unilever, the food group, was on 137m, beating Coca-Cola, the beverage giant, on 136m. Mars, the confectioner, was next on 125m, the same score as Colgate, the dental care expert. Liby, the household goods firm, made up the top ten on 123m.
Also passing the 100m-benchmark were Want Want, which makes rice cakes and milk drinks, on 123m, Wahaha, a major domestic beverage manufacturer, on 119m, and Uni-President, from the food sector, on 115m.
PepsiCo, the US conglomerate, posted a figure of 115m here, just ahead of Mondelez International – which recently separated from Kraft Foods – on 114m, a gain of 13m households year on year.
The report suggested Mondelez International was an example of how innovation can drive growth, with localised extensions of Oreo and Chips Ahoy, and smaller pack sizes of Eclairs, showing this in action.
Moreover, Mondelez has tapped new markets, with over 50% of buyer growth coming from the lowest tier cities and counties, while 45% of Uni-President's growth, or 4.5m people, also came from this source.
Acquisitions are equally crucial. COFCO's takeover of dairy firm Mengniu gave it access to 50m more homes, while Nestlé's purchase of Xufuji and Yinlu boosted its customer base by 29m households.
Data sourced from Kantar Worldpanel; additional content by Warc staff, 22 November 2012
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