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P&G tops FMCG reach in China

News, 27 November 2015

SHANGHAI: Procter & Gamble (P&G) maintained its lead in the consumer goods market in China over the past year after achieving 95.5% penetration of urban households, a new report has revealed.

According to Kantar Worldpanel, the American FMCG giant reached 153 million Chinese urban households in the year to October 9, 2015, representing steady growth of 2.1% since last year.

Its Anglo-Dutch rival, Unilever, slipped -0.5% over the same period to 129 million urban households (80.7% penetration) while US food giant Mondelēz fell by the same proportion to 119 million (74.3%).

Meanwhile, Swiss food group Nestlé remained unchanged at 86.6 million urban households after registering zero growth over the year.

There are now 21 FMCG companies reaching more than 100 million urban Chinese households compared with just 15 in 2012 and the report said more of them are growing their customer base either through growth or mergers and acquisitions.

However, heavy marketing investment in TV sponsorship and in-store promotions brought significant gains for Chinese dairy brands Yili and Mengniu, which now vie with P&G for the top slot.

After successfully promoting their premium ambient yoghurt and protein drink brands, Yili and Mengniu attracted 23.5 million and 17.2 million new households respectively.

Second-placed Yili increased its reach by 3.0% over the year to 141 million urban households (88.5% penetration) while Mengniu grew its urban customer base by 2.7% to 88.2 million households. A total of 11 Chinese companies are now included among the largest FMCG firms in the country.

"Aside from mergers and acquisitions, we continued to witness some Chinese companies successfully growing their consumer base organically, by either expanding into new categories and new geographies, or leveraging emerging sales channels," said Jason Yu, general manager of Kantar Worldpanel.

In other advice for FMCG brands, the report urged them to concentrate on supermarkets and convenience stores rather than hypermarkets while also making the most of ecommerce channels.

With 6.8% penetration, P&G still leads on reach across ecommerce channels, but the report noted that Chinese companies Liby, Dali Group and Haday are growing fast.

Data sourced from Kantar Worldpanel; additional content by Warc staff