Our latest figures for the 12 weeks ending 14th August 2020 shows consumer spending on FMCG in China grew 4.1% in value, thanks to increased frequency. Lower-tier cities outpaced top-tier cities, while the East region continued to lead the market’s growth. Meanwhile, with the easing of the pandemic and arrival of the hot weather, the reduction in out-of-home consumption began to show signs of bottoming out in upper-tier cites.
Modern trade (including hypermarkets, supermarkets, and convenience stores) fell by 2.9% in the latest 12 weeks compared with last year. Small supermarkets continued their onward march with rapid growth of 7.3%, while hypermarkets suffered a more serious challenge with value decline of -7.1%.
Among the top players, RT-Mart maintained its leading position with 7.2% value share, recording an increase of 0.1 ppts compared to last year, driven by both larger basket sizes and increased shopping frequency. Lower-tier cities were their strong growth engine with a value growth of 4.7%. As well as the strong expansion of proximity stores, we have recently seen the first medium-sized store which opened in Changzhou. RT-Mart Super is aiming to deliver more daily fresh products and offer an improved shopping experience, such as free cooking recipes and a service bell on the shelf to differentiate it from other formats.
Another of the biggest brands, Younghui, maintained its double-digit growth over the last three months. According to the latest financial report, Yonghui’s revenue increased by 22.7% in the first half of 2020. Among the regional players, the Spar group showed the most outstanding growth, reaching 17.9%.
Ecommerce continued its prominent value growth of 43.5%, as Chinese consumers become even more accustomed to shopping online since lockdown. Over the last 12 weeks, 72.3% of households in urban China purchased FMCG online, which is a significant uplift in the shopper base. Alibaba remained on the front foot with a 45.8% online market share (+1.7 ppts), while JD showed a slight decline of -0.2 ppts. Among the top players, the Alibaba group showed the strongest penetration growth at 13.9 ppts, followed by Pinduoduo at 8.8 ppts. Pinduoduo recently launched its new community group-buying project, Duoduo Maicai, the aim of which is to increase MAU (monthly active users) through fresh food, which has high demand paired with high consumption frequency.
