Chinese FMCG brands assert their dominance at home

This report showcases the region’s most game-changing brands, and reveals the five growth drivers they all share.

Kantar Worldpanel/CTR launches its Asian Brand Power 2015 report in Beijing today. It is the first publication to chart the shift in the competitive landscape of Asia’s FMCG market, where local brands are now growing twice as fast as their global rivals. Covering nine countries, the report features exclusive interviews with CEOs of home-grown ‘giants’, including Vinda and Sanquan Food, and reveals the five ‘power levers’ driving their growth.

The research behind the report reveals that while the rise in FMCG consumption across Asian markets is slowing, Chinese consumers’ spend on local brands increased 7% in the last year, compared with 3% for global brands operating in China. Other highlights of Kantar Worldpanel’s analysis include:

In Asia:

• The pace of FMCG consumption growth has halved from 10% in 2012/13 to 4.6% in 2014/15. In China, growth has fallen by a third (from 15.8% to 5.4%) but the market is still responsible for 75% of total FMCG growth in Asia.
• Local brands attract 74% of Asian shoppers’ total FMCG spend, and are growing at twice the rate of global brands (8% compared with 4%) .

In China:

• 70% of local FMCG players are growing their sales, compared with 50% of the global brands operating in the market.
• Local brands account for around 70% of the value of the FMCG market, and are driving 82% of its growth.
• In terms of penetration, 44% of Chinese brands increased their shopper base in the last year, compared to 33% of global brands operating in China.

Kantar Worldpanel has also identified the Top 10 Chinese brands that have grown their shopper base within China the most within the last year*: These brands will each be presented with a Kantar Worldpanel ‘Asia Brand Power’ award at the launch event.

Brand Increase in shoppers during 2014 % penetration

*Panel covers households in national urban China

The five ‘power levers’ of growth that all the dominant Asian players featured in the report were found to have in common are:

1. They are masters of metamorphosis: Shifting from manufacturing-led to brand-led, evolving along with consumers and expanding beyond their country of origin.

2. They have a purpose, and play an active role in society: Respecting and caring for consumers, helping to improve lives and democratising categories.

3. World-class innovation with a local twist: Recognising that consumers want to move with the times, but without sacrificing traditions.

4. They digitise and humanise: Applying digital technologies both to create and sell products and to connect with consumers on an emotional level.

5. Data-led intuition: An instinctive understanding of what will work, combined with ongoing market research that provides unbiased, actionable consumer insights.

Jason Yu, Kantar Worldpanel/CTR´s General Manager, China, commented: “This report showcases the Asian FMCG brands that every marketer with global ambitions – and every global name with ambitions to succeed in Asia – should be aware of and inspired by. Local players are winning the game, and we’ve examined the journeys of those that have achieved the most significant growth in their respective markets. Many have already expanded internationally. These brands come from a variety of sectors and geographies, but all are exceptional and should be proud of what they’ve achieved.”

The Asian Brand Power report is a joint initiative between Kantar Worldpanel and Kantar Group in Asia. It combines insight from a number of sources – including purchase behaviour data from Kantar Worldpanel’s permanent panel, data on 5,200 Asian brands from Brand Footprint 2015, interviews with the CEOs of 10 leading Asian brands and white papers from Kantar companies in Asia.