China’s GDP growth rate has fallen to 6.0%, its lowest level in 27 years, yet that has not deterred Chinese consumers from buying fast-moving consumer goods, least of all imports, which now represent 18% of China’s total FMCG consumption.
This is according to Bain & Company, the international management consultancy, and consumer insights firm Kantar Worldpanel, whose joint China Shopper Report 2019 was released at the end of last week.
Based on a study of 106 FMCG categories purchased for home consumption in China, the report found that overall spending on FMCG grew by 4.9% in the first three quarters of 2019, not far below the 5.2% growth seen in 2018, although there were variations across categories.
Both the packaged food and beverage categories grew 2.3% in value, for example, while personal care (11%) and home care (7.8%) achieved far higher increases in value over the first three quarters.
And importantly for international brands, given the ongoing trade dispute between China and the US, the report found that imports accounted for 18% of China’s total FMCG consumption in the first six months of 2019 and that imports grew 10%, or close to twice the rate of overall FMCG growth.
This was driven mostly by online channels, with online sales of imports jumping 30% in the first half of the year and imports accounting for more than a third (35%) of all online sales in China.
Sales of American makeup in the 12 months ending in the second quarter of 2019 rose 54% from the same period in 2018, for example, while toothpaste sales from the Netherlands more than doubled over the same period.
Meanwhile, sales of nutritional supplements from South Korea increased by 35%, while those from Thailand rose 29%, and the value of biscuits from Singapore and Indonesia grew by 22% and 17% respectively.
“Even as homegrown products dominate their categories in China, consumers have an enduring desire for imports, especially in product categories where they can satisfy their aspirations for a more diversified lifestyle and quality of life,” the report said.
Sourced from Bain & Company, Kantar Worldpanel; additional content by WARC staff