Consumer brands continue expansion into urban Chinese markets
A total of 22 companies tracked by research firm Kantar Worldpanel have acquired Chinese consumer bases in excess of 100 million urban households, according to the company's latest report.
Specifically, YST Group, Haday and the Coca-Cola Company recorded the fastest gains in consumers during the one-year period ending in early October.
China Resources also entered Kantar's ranking for the first time, thanks to the strength of brands such as Snow and C’estbon, and its takeover of Jiangzhong Pharmaceutical Group.
The ranking is based on tracking household consumption behavior across more than 100 product categories in 20 provinces and four municipalities.
“Amid economic uncertainty, big FMCG (fast-moving consumer goods) companies continue to launch new products to win consumers who are more in favor of brands that promise to improve their health and lifestyle,” said Jason Yu, general manager of Kantar Worldpanel China.
Yu suggests there is still room for existing brands to acquire shoppers by extending into relevant categories or through acquisitions.
However, product innovation is difficult as consumers become more sophisticated thanks to a vast array of brands to choose from. Many leading players successfully grew their user bases either by launching more premium products to attract young middle-class shoppers or by expanding into new territories.
YST Group, for example, has expanded beyond its Nongfu Spring bottled-water brand to add vitamin water and even masks and facial moisturizers to capitalize on the booming beauty sector.
Online channels are also indispensable to retain consumer. Market leaders such as P&G, Yili and Mengniu are all enjoying strong shopper growth through online sales as they try to make their products more accessible to Chinese consumers.