China's FMCG sector settles into low growth reality

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China’s fast moving consumer goods (FMCG) sector observed a moderate recovery in 2023 and in the first quarter of 2024, according to the 27th China Shopper Report [2024 Vol. 1] released today by Kantar Worldpanel and Bain & Company.

China’s FMCG market grew 2.4% in 2023, lagging GDP growth (5.2%) and total retail market growth (7.2%, excluding catering), due in part to recovering out-of-home consumption post pandemic. Volume continued to be the main driver of growth, with an increase of 2.4%, while average selling prices (ASP) remained relatively stable throughout the year.

In the first quarter of this year, China’s FMCG sector saw value growth of approximately 2.0%, a half percentage point higher than in Q1 2023, supported by a 3.5% increase in volume. While the volume increase illustrates a continued strong desire for consumption, the market experienced a deflation of 1.5% in ASP, down from the stable pricing trend observed in 2023.

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