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Maggie Zhang

Domestic brands continued to gain ground in China’s fast-moving consumer goods market as overall sales by foreign rivals shrank last year, an industry report said on Tuesday.
Chinese companies won a greater market share in 16 out of 26 categories of fast-moving consumer goods (FMCG), Bain & Co and Kantar Worldpanel said in a joint report.
They made the biggest ­advances in skincare products, baby diapers, ­toothpaste, and shampoos and ­conditioners.
Foreign companies gained ground in seven categories, bolstering their shares the most in fabric ­softeners, infant milk formula, instant noodles and beer.
Market shares in three ­categories – sweets, juices and toothbrushes – remained ­unchanged.
The 26 categories covered by the survey represent more than 80 per cent of FMCG sales.
“In many cases, multi­nationals are gaining ground either through investing heavily in ­marketing or as the result of food safety concerns with local products,” the report said.

The sales of local brands of FMCG products grew by 7.8 per cent in 2015, while foreign brands’ sales shrank 1.4 per cent, eroding the industry’s overall growth, the report said.
Local brands stood out for their focus on Chinese ­consumers, faster response to local needs, ­better use of online sales channels and heavier investment in ­branding via social and traditional media.
Meanwhile, brands in ­categories that cater to blue-collar workers, such as instant noodles and inexpensive beer, are ­suffering as manufacturing jobs move to ­Bangladesh, Vietnam and other lower-cost countries around China.
That worsening sales ­performance is intensified by a decline in the worker population, which peaked in 2012, ­resulting in an increase in the number of retirees on limited ­incomes.
In contrast, strong growth has been recorded in categories that are more targeted to white-collar workers and the growing middle class.
With the rise of the services sector and its better paid jobs, the performance of brands in categories such as yogurt and pet food remains robust.
Those consumers also ­boosted their spending in non-FMCG areas such as travel and entertainment.
“China’s economy is evolving to adapt to slower growth, a shift in focus from manufacturing to services and a push for ­innovation-led growth over the investment-propelled model,” said Jason Yu, general manager of Kantar Worldpanel China.
“We see the distinct effects that these shifts are having on consumption patterns.”


Chinese brands gain ground against foreign rivals in everyday product sales

A shopper browses goods at a supermarket in Shanghai. Photo: Xinhua

***ONE TIME USE ONLY***--FILE--Bags of Anerle infant diapers of Hengan International Group are displayed at a fair in Fuzhou city, southeast Chinas Fujian province, 30 May 2014. From toothpaste to ice cream to disposable nappies, modern Chinese life has been transformed by imports. But many of those erstwhile alien products now bear Chinese brand names. More and more mainlanders are brushing their teeth with Yunnan Baiyao toothpaste, eating Yili ice cream or putting nappies made by Hengan on their babies. Multinationals still have a strong sometimes dominant presence in these markets, but mainland brands are exploiting local knowhow and speed to market. Disposable nappies are a case in point: many Chinese grannies did not use them to raise the current generation, but today's urban mainland mums rely on them. The market in China is highly concentrated, with 10 brands capturing 85 per cent of sales. Only one local brand has significant share: Hengan with 9 per cent, compared with 10 per

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China

Money & Wealth

Customer-centric approach boosts Chinese firms’ market share in 16 out of 26 product categories
