FMCG reported moderate growth, with lockdown extended
According to Kantar Worldpanel, the fast-moving consumer goods (FMCG) market in China saw a year-on-year growth of 1.5% over the 12 weeks to 22nd May 2022. With the strict lockdown in Shanghai, as well as the emergence of COVID cases in Beijing and a few other cities, consumers stocked up on food categories whilst cutting back on beverage and personal care categories.
Although the lockdown and reduced mobility tilted demand toward stock-up buying, the shockwaves in key cities was not offset by more “home-based” consumption. This resulted in a year-on-year decline by 0.8% in sales value in key cities for the past twelve weeks. During the same period of time, provincial capital cities and prefecture level cities continued to report stronger growth values of 2.1% and 3.2% respectively.
Modern Trade Performance
Modern trade saw 2.1% growth in the latest 12 weeks compared with the same period last year, driven by the strong performance of smaller supermarkets and convenience stores, whereas hypermarkets saw 3.2% drop in sales. Amongst the key players, Sunart group reported 8.9% drop in sales as its store portfolio in the East region was more severely impacted by the forced closures. Yonghui, while focusing more on the West and South regions, reported a moderate growth of 4.7%. Walmart group continued to race ahead with 7.8% growth, thanks primarily to the strong gains made by Sam’s Club.
Ecommerce Channel
E-Commerce witnessed a moderate growth of 1.4% for the latest 12 weeks and 3.9% growth in the 4 weeks to May 22nd. JD continued to lead the growth, with an increase of 4.8% in sales and a steady year-on-year penetration lift of 1.2 percentage points. Alibaba and Pinduoduo maintained their market share and penetration. The short video platforms, Douyin and Kuaishou, managed to acquire additional penetration of 4.7 and 1.3 percentage points respectively in May, capitalizing on the increased consumption of short video contents during the lockdown period.
Source: Kantar Worldpanel
With restricted transportation affecting the delivery of mainstream Ecommerce players, online-to-offline (O2O) commerce saw further increases. Community Group Buy, Aggregator, and frontline fulfillment-based delivery companies all delivered outstanding performances in May. 34.7% of Chinese families used O2O to shop for groceries in the latest 12 weeks.