SHANGHAI: International retail brands are seeing their market share fall in China with stiffer competition from local rivals as the nation's retail landscape remains tough for all players, a new industry report has suggested.

According to the latest data from Kantar Worldpanel, the consumer insights firm, the market share held by international retailers fell to 13.5% in Q1 2015, down from 15.1% in the same period last year.

Their share eroded in their traditional stronghold of first and second tier cities as local retailers expanded their footprint while their development in lower tier cities has been relatively slow.

Local retailers rapidly extended their reach across all city tiers, the report said, with Sun Art Group taking the top spot with market share of 7.8% in Q1 2015, up from 7.3% in Q1 2014.

Taiwan-based RT-Mart, considered a local retailer by the report, took 6.6% market share during the first quarter on the back of a strong performance in lower tier cities, where it grabbed 8.5% market share.

Yonghui also fared well, growing its share to 2.2% and, with its recent acquisition of a 21% stake in the Lianhua supermarket chain, is expected to expand in relatively affluent eastern regions.

The outlook was less encouraging for global retail brands. Although French retailer Auchan maintained its 1.2% share from last year, fellow French chain Carrefour saw its share fall to 3.5% from 3.8%.

Meanwhile, Wal-Mart, the world's largest retailer, fell to 4.8% in Q1 2015 compared with 5.5% in the same quarter last year.

Overall spending in the Chinese FMCG market grew by 4.3% in the 12 weeks to March 20th, 2015,though this was a slower rate of growth year-on-year.

However, ecommerce continued to grow at a fast pace and the report found 37% of Chinese households went online to shop over the past 12 months.

With more and more retailers accelerating their ecommerce presence, the report predicted this would "make the fight" for the Chinese shopper more intense, especially in the more developed cities.

Data sourced from Kantar Worldpanel; additional content by Warc staff