In the second volume of Keeping up with China’s Shoppers at Two Speeds, consultants Bain & Company and market research firm Kantar Worldpanel chart divergent trajectories for the personal/home care categories and the food and beverage categories.
Overall FMCG value growth has been flat, up just 2% in the first half of 2017 compared to a year earlier while volume sales dipped 0.3%.
The food and beverage sector, however, has experienced negative volume growth for the past two years, notwithstanding the performance of individual product sectors like yogurt and packaged water which play to consumers’ interest in health and wellness.
Sales of personal care products, by contrast, rose 8.4%, although this marked the slowest rate of growth in four years.
Beyond specific categories, Bain and Kantar found that, overall, shoppers are purchasing less frequently. As more people buy online, they tend to place bigger orders, forgoing the need to make trips to the hypermarket or supermarket.
The report also pointed to a decline in shopping frequency for the food and beverage categories that stems from a boom in food delivery services brought on by new digital technologies and rapidly changing meal habits for Chinese consumers.
But while e-commerce and tech has affected some consumer behaviours, others appear immune.
Bain and Kantar define each FMCG category as being either repertoire or loyalist and, since 2013, have noted that in repertoire categories, customers who shop more frequently tend to try more brands; in loyalist categories, however, shoppers repeatedly buy the same brands regardless of the increase in frequency.
“Our research shows that repertoire-loyalist categories still break down along the same lines as they did when we first began researching brand loyalty five years ago, said Bruno Lannes, partner in Bain’s Greater China Consumer Products Practice and co-author of the report.
“What’s changed is that we’re able to say with a good degree of certainty that category’s online penetration has minimal impact on where it lands on the repertoire-loyalist continuum.
“Similarly, loyalty patterns are not altered by shoppers’ movements between offline and online channels, which means that the imperative for brands to drive penetration to grow continues to be paramount.”
Sourced from Bain & Company; additional content by WARC staff