That gurgling is the sound of mouthwash at the top of China’s list of must-buy consumer items
Mouthwash ranked top among 106 consumer goods in sales growth during the first half, according to market research company Kantar Worldpanel
Mouthwash stood out as the fastest growing consumer good in China, reflecting how the needs of middle-class consumers are reshaping the retail landscape in the world’s second largest economy.
In the first half of this year, sales of mouthwash in mainland China surged 70 per cent, becoming the front runner in sales among 106 consumer goods monitored by consumer market research company Kantar Worldpanel.
In the six month period, two-thirds of the 106 categories recorded sales growth on year, including ice cream, hand wash, ready-to-drink coffee, bottled water, cheese, kitchen tissues, cosmetics and facial masks.
“The incremental rise of mouthwash reflected the gentrifying need of middle-class families in a ‘go upscale’ trend of consumer goods,” said Jason Yu, general manager of Kantar Worldpanel in Greater China. “Niche products, new products and the growing middle-class are the key drivers of consumer goods sales growth in China.”
Outlays on consumer goods by middle-class families, or those households with a monthly salary above 9,000 yuan (US$1,381), was 14 per cent higher than the average of less affluent households in the first half.
The “go upscale” trend is also reflected by bottled water, where products like sparkling water, are becoming new lifestyle symbols.
For instance, sales of Evian mineral water, the French premium bottled water, gained 29 per cent on year, according to data from Kantar Worldpanel.
However, Chinese consumers are not that brand loyal. The likelihood they will switch brands at their next purchase is as high as 67 per cent.
In the first half of this year, nearly 80,000 new consumer products were launched in China, or 62 per cent of last year’s total new products.
In the first half of this year, fast moving consumer goods sales inched up 2.6 per cent, while household purchasing frequency dropped 3.3 per cent. It implied that consumers are paying more for premium products while cutting back in other areas of their consumption.
“Looking ahead, the go premium trend will plough on in the new retail era,” Yu said. “I expect total consumer goods sales to keep growing at similar low single-digit growth in the rest of this year.”
Nomura Research analyst Shi Jialong said he expected more e-commerce giants to expand their presence in the brick-and-mortar retailing segment, as it provides an efficient way to reach new consumers.
In the new retail era, the lines between online and offline sales are becoming blurred, as retailers integrate both models to maximise synergies, he said.