FMCG Maintained Stable Growth During Q2
According to Kantar Worldpanel (a CTR service in China), sales in China's fast-moving consumer goods (FMCG) market in the second quarter of 2022 increased by 2.8% year-on-year, the same level as the first quarter.
COVID heavily reassigned the weight of each growth driver and reshaped the landscape of the outlook for FMCG. Food and homecare led the trend through Q2 by a growth of 9.5% and 5.7% respectively, while beverages slowed down with a mild growth of 1.2%. Since many consumers spent more time at home, due to several lockdowns across the country, personal care was the most impacted, declining by 4.4%.
Although total retail sales of consumer goods of the first half in 2022 mildly declined by 0.7%, compared to 2021, purchases on daily necessities increased, especially via ecommerce-based channels. As Shanghai and Beijing came out of the lockdown the FMCG market quickly recovered and reached a 5.2% year on year growth for the month of June. With productions and social activities restored, beverage and personal care categories regained their growth momentums.
Although June’s market rebounded significantly, lockdowns in Shanghai and Beijing incurred shockwaves that slowed down the growth across the East and North regions in Q2. Comparatively, the South and West regions earned an advantage and delivered greater a market value by 4.4% and 2.8% compared to last year, which is mostly attributed to higher purchase frequency. The divergence among channels was further amplified. Many CVS and Small/Mini Supermarkets were able to continue operations and meet the demand of convenience which led to a sales lift of 13.8% and 11.4% respectively, whereas hypermarkets bore the blunt of the lockdown experiencing a decline of 3.3%, which was an acceleration of the 0.7% decline seen in Q1.
Competition in Modern Trade Heats Up as Yonghui and SPAR Post Eye-Catching Performances
Competition has been heating up for modern trade retailers since offline shopping has faced greater challenges resulting from of COVID. As hypermarket in the East staggered, Sun-Art lost 0.8 percentage points in market share, whereas Yonghui stepped up and took 0.1 percentage points. Due to its successful transition into the small supermarket format, Bravo Yonghui seized a 7.4% lift in value sales. This narrowed the gap further and shows that shopping habits have developed in the direction of faster, closer, and lighter occasions.
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