TAIPEI: Asian FMCG brands are able to outperform global ones thanks to their ability to react more quickly to changing consumer tastes and habits and to tap into shifts in local retail.
According to a new report from Kantar Worldpanel – Asia Brand Power: How Asia’s rising retailers are reshaping FMCG – “the main driver of growth in Asian FMCG markets has moved decisively”.
Spending at hypermarkets and supermarkets remains the same but there have been “dramatic growth figures” in FMCG sales posted by chains of minimarts and convenience stores.
“The rise of local Asian FMCG brands has taken place alongside an equally dramatic rise for local retailers,” noted Marcy Kou, Asia CEO, Kantar Worldpanel.
“The partnerships formed by these two types of Asian champion are fundamental to their success: they help to make local brands more mentally available than multinational rivals; and they support innovative retailer strategies that are both anticipating and responding to Asia’s changing shopping habits.”
In crowded Asian cities, many consumers don’t have the option of driving to a supermarket and loading up with groceries on the European or American model, meaning that modern trade has developed on a neighbourhood scale, where smaller stores have less shelf space and will usually offer less choice and reduced pack sizes.
Failing to develop a business model that fits this new breed of retailer is one reason why some multinational brands have struggled to protect their market share in Asia, the report observed.
Nor are such stores simply about convenience – they serve as community hubs where shoppers can pay utility bills, buy travel tickets, book concerts, and for social gatherings.
As smartphone penetration increases and e-commerce grows, they are also developing a role as delivery hubs for items bought online.
FMCG brands can consider a range of strategies, the report suggested, from sharing data and insight to local initiatives and activations.
They could also partner with local retailers across online and offline channels to, for example, distribute a new product via e-commerce channels on a trial basis.
Sourced from Kantar Worldpanel; additional content by WARC staff