BEIJING: The hitherto rapid growth in consumption of FMCG products across Asia is slowing, but a new study says local brands are growing twice as fast as global ones.
The Asia Brand Power 2015 report from Kantar Worldpanel combines insight from a number of sources, including purchase behaviour data from its own permanent panel, data on 5,200 FMCG brands in Asia from its Brand Footprint 2015 database, interviews with the CEOs of 11 leading Asian companies and white papers from Kantar companies in Asia.
Overall, it said, the pace of growth in the FMCG category across the region has halved, from 10% in 2012/13 to 4.6% in 2014/15.
The downward trend was even steeper in China, as growth slowed from 15.8% to 5.4% over the same period, but Kantar noted that this market alone was responsible for 75% of total FMCG growth in Asia.
Within the FMCG market, local brands are attracting around three quarters of Asian shoppers' category spending, and these are growing at twice the rate of global brands (8% compared with 4%).
The differential was slightly more in China, where spending on local brands rose 7% last year compared to the 3% registered by global brands.
Further, 70% of local FMCG players in China were growing their sales, compared with 50% of the global brands operating in the market.
And they were achieving this, in part, through increased penetration: 44% of Chinese brands increased their shopper base in the last year, compared to 33% of global brands operating in China.
"Local players are winning the game, and we've examined the journeys of those that have achieved the most significant growth in their respective markets," said Jason Yu, General Manager of Kantar Worldpanel China.
"Many have already expanded internationally," he added. "These brands come from a variety of sectors and geographies, but all are exceptional and should be proud of what they've achieved."
Kantar Worldpanel identified five 'power levers' of growth common to leading Asian brands, including an ability to shift focus and evolve along with consumers while playing an active role in society.
They are also able to innovate while keeping hold of traditions and to apply digital technologies while still connecting with consumers on an emotional level.
Data sourced from Kantar Worldpanel; additional content by Warc staff