Worldpanel's analysis of Taiwanese consumers' purchasing behaviour in 2023 has revealed 10 significant trends that are set to shape key FMCG categories and channels in 2024.
1. Food: Growth momentum will return as inflation subsides.
In 2023, as the pandemic eased, demand for FMCG food shrank. The resumption of overseas travel, coupled with the impact of inflation on purchase intentions, caused the performance of most categories to decline – but it remains higher than pre-pandemic levels. In 2024, the food market is expected to return to growth, mainly driven by new buyers.
2. Beverage: Health conscious consumers will drive up sales.
Worldpanel expects two factors to trigger a rebound in demand as the effect of price increases reduces. First, due to consumers' yearning for healthy products, functional milk drinks with a clear health offer will lead category growth. Second, as people go out more, consumption of packaged beverages from convenience stores will increase.
3. Health care: Demand continues to rise, with innovative formats capturing buyers.
Category performance in 2023 declined compared with the previous year, but is still better than before the pandemic. Penetration of health food across Taiwan stood at more than 50%, equivalent to half of all consumers buying the category in the past year. Among the many product formats available, jelly dominates, with a rise in annual sales volume of nearly 20%.
4. Beauty: Makeup, sunscreen, and perfume are lifting the category.
Taiwan's beauty market has continued to expand since the pandemic, with a 7% year-on-year increase in per capita spending and a rise in average purchases per person in the third quarter of 2023. Among the fastest-growing categories are makeup, sunscreen and fragrance, which have seen double-digit annual sales growth due to increased social gatherings.
5. Home care: Laundry capsules, dishwashing detergents and home fragrances stand out.
The overall household goods market stagnated after the pandemic, but some categories are standing out. Laundry capsules, which have the advantage of convenience, have increased their penetration by 250,000 households. Dishwashing detergent, which was hit by the recovery of eating out, has benefited from higher prices. The demand for home fragrance products for healing and stress relief increased during COVID and has continued to grow.
6. Baby: Premiumisation and the Year of the Dragon are boosting the market.
2024 is the Year of the Dragon, and with the pandemic having ended one year ago, the National Development Council estimates that the number of newborns will increase by 9%. According to Kantar's data for the third quarter of 2023, the average cost of baby diapers has increased by 17% compared with two years ago, while the purchase volume of baby milk powder has increased by 26%.
7. Pet food: The category is a hot topic, with one in every five households owning a pet.
With the change of Taiwan's demographic structure and the promotion of the status of cats and dogs from pets to family members, owners are more willing to invest money to protect the health of their furry children.
8. Offline channels: Footfall in physical stores will recover, especially for beauty.
Affected by the post-pandemic decline in FMCG food demand, growth in offline channels will remain flat in 2024. However, personal care stores will benefit from the bounce in demand for beauty products, and their year-to-year sales will grow.
9. E-commerce: Online shopping is shaping new habits cross all age groups.
Online shopping sales have continued to rise post-pandemic, with more and more consumers buying FMCG products online. The best performing channels include official websites, C2C e-commerce platforms, social online shopping and O2O home delivery.
10. Gifting: Shoppers seek to give health and happiness.
The Lunar New Year is the peak season for Taiwanese people to give gifts. In the first quarter of 2023, the sales of gifts such as chicken essence and bird's nest, which offer health and nutrition benefits, increased by nearly 60% compared with the same period the previous year. Sales of casual snacks, which are indispensable for the Chinese New Year, also increased by 50%.
After a year of post-pandemic recovery and inflationary pressure, Taiwanese consumers' daily lives have gradually returned to normal. However, their priorities have changed: they pay more attention to health, environmental friendliness, quality of life and convenience.
Understanding the changes in behaviour will enable FMCG manufacturers to direct their R&D activities and innovations to provide relevant and differentiated products and services. They should also emphasise health and quality in their communications with target customers.
For more insights into how to navigate the Taiwanese FMCG market, contact our experts.