Consumer goods sales growing fast online

Sales of fast moving consumer goods (FMCG) in urban China grew by 5.3 percent in 2019, compared with 5.1 percent the year before, Kantar Worldpanel said in its latest report. 

Packaged food for indoor consumption continues to slow with growth of 2.5 percent in 2019. 

Home care categories and personal care sectors maintained a strong performance with 8 percent and 11.5 percent annual growth. 

The growth pace of FMCG sales through outlets such as hypermarkets, supermarkets and convenience stores slowed to just 1.1 percent as spending switched to online channels.

E-commerce saw a 36.2 percent annual growth in FMCG spending, with 78 percent of Chinese urban families buying such goods online at least once with an average frequency of 14.5 times in the past year.

Sun Art Group, Vanguard Group and Walmart Group remained the top three FMCG retailers nationwide in terms of grocery sales share.  

Hypermarket chains will continue to embrace digital transformation and adopt new store formats amid reduced footfall and remodel stores to add more functions to attract shoppers, the report suggests. 

The delivery service will be dominated by a handful of giants such as JD.com, Ele.me, Meituan and third-party players such as Dmall as consumers buy groceries using mobile devices.   

Smaller store formats will see more competition as established supermarket chains offer more compact store formats squeezed by rising rents and labor costs, the report says. 

China’s less-developed areas will also become a major focus for the e-commerce giants to drive further growth with lower-tier cities seeing a pickup in FMCG spending through online channels.