The latest consumer trend is 'affordable, high-quality products'
The 9.9-yuan (US$1.4) shower gel that Fatty WJ bought at an outlet of supermarket chain Aldi in Shanghai has won her 5,000 "likes" on social site Xiaohongshu (Red).
A Shanghai resident loving to share lives, she was surprised to see the warm feedback after she uploaded the purchases, which also received over 1,000 comments on how to find the best deals on daily necessities.
"It's such a bargain for an average wage earner like me in Shanghai!" she said.
Others reported purchasing sanitary pads and other hygiene products under Aldi's private label, which typically cost between 5 and 10 yuan and are said to be 50 percent cheaper than comparable products from popular consumer brands.
Affordable prices have become a key factor for consumers buying daily necessities.
"Retailers with moderately priced products and fairly excellent quality are winning over buyers," claimed Jason Yu, managing director of Kantar Worldpanel China.
The latest China Shopper Report by Bain & Company and Kantar Worldpanel showed a shift toward value-for-money options such as private label brands and price promotions.
Aldi's 500-gram shower gel and facial washing cream for 9.9 yuan (US$1.4) have sparked discussions online.
Yu said that many retailers recognize they require specialized services and solutions to guarantee the customer experience, such as membership-exclusive store delivery and tighter supply chain integration.
The report reveals a post-pandemic shift in consumer interests toward dining out and tourism, amid a mild FMCG recovery.
Aldi's current "Essential" product line includes moisturizing cream, shampoo, personal care, and home hygiene products, as well as dairy, snacks, fruit juice, and personal hygiene products.
"High quality affordably priced" was its new slogan to attract shoppers, and it focused on co-developing with local suppliers for smaller packages of fresh food and dairy products for small households instead of bulk-buying from big-box retailers and membership exclusive stores.
Shoppers also take into account the convenience of buying fresh food.
Retailers said shoppers want high-quality and convenient shopping while being cautious and spending responsibly.
Aldi offers around 80 percent locally created or sourced products, and it expects home brands to represent nearly 90 percent of its total offerings in the near future.
Aldi offers around 80 percent locally created or sourced products and expects house brands to represent 90 percent of its offerings in the future.
Local and multinational retailers have noticed the trend, with large supermarket chains emphasizing value for money, especially for their own products.
Alibaba's Freshippo supermarket chain announced price cuts for over 1,000 products last month exclusively for in-store purchases to boost foot traffic.
Its largest single-entity investment was a Pudong New Area supply chain hub for frozen food, ready-to-cook dishes, and logistics in July.
It expects to expand its product offering for its home brand of pre-cooked meals in the Shanghai and around Yangtze River Delta Region.
Comparison of Sam's Club, Freshippo and Aldi
Freshippo opened its largest supply chain operations center in the Pudong New Area to boost home brand supply and delivery of pre-cooked dishes.
To deliver value-for-money products over the long run, industry experts suggest spending more on merchandising and supply chain flexibility and robustness rather than compromising quality by cutting pricing or asking suppliers to lower costs.
Chen Liping, a professor at Capital University of Economics and Business School of Business Administration, specializes in retail models and discount stores worldwide.
Discount stores in China are still in their infancy and slash prices by cutting supplier costs. Chen said cost cutting will lead to inferior quality and hurt product creation, development and distribution.
He pointed out that as customers become more cautious about everyday consumables, demand for reasonably priced, high-quality food has skyrocketed, giving value-for-money businesses enormous growth potential.
Future efforts will focus on co-developing new recipes, ingredients, and product formats rather than selling existing products.
