Click "Read the original text" for details According to the latest report from Kantar Worldpanel, although the COVID-19 pandemic brought huge challenges to the consumer goods industry in 2020, 22 leading FMCG companies in the Chinese market still won favor from more consumers, with their consumer households increasing by a total of 82 million. This fully proves that large enterprises trusted by consumers are more capable of turning crises into opportunities and consolidating their competitive advantages. The report points out that in the 52 weeks ending October 9, 2020, 22 FMCG companies in China attracted more than 100 million urban Chinese households to purchase their products. Yili Group, P&G China, and Mengniu Group attracted purchases from more than 160 million urban households. In the past year, 92.2% of urban Chinese households chose products from Yili Group, propelling Yili to the top spot for the first time. In terms of customer acquisition growth rate, Shuanghui, Haitian, PepsiCo, Master Kong, and Yihai Kerry were the five fastest-growing companies in 2020. FMCG companies covering over 100 million urban Chinese households "Although the COVID-19 pandemic brought huge challenges to FMCG companies, we are also pleased to see that 19 of the top 22 FMCG companies expanded their consumer base in 2020, indicating that even the largest companies still have ample room for consumer growth," said Jason Yu, General Manager of Kantar Worldpanel Greater China. "The impact of the pandemic affected various categories to different degrees, and companies that successfully won consumers were always able to respond quickly to changes in consumer demand and shopping behavior, continuing to maintain high-speed growth." -01- Seizing New Opportunities in the "New Normal" The COVID-19 pandemic was undoubtedly the biggest black swan event in 2020, and the current new normal of epidemic prevention has also profoundly affected the development of the FMCG market. The public's continued attention to health and immunity has led to a surge in demand for dairy products rich in nutrients. As a result, the consumer bases of Yili Group and Mengniu Group continued to grow significantly. Consumers reduced outings and spent more time at home, developing new living habits, and the consumption scenario of cooking at home also increased significantly. These changes greatly promoted the vigorous development of condiment/grain and oil enterprises, typically represented by Haitian and Yihai Kerry. Driven by both stockpiling demand and convenience, convenience food manufacturers such as Shuanghui, Master Kong, and Uni-President saw significant growth in consumer numbers. Consumers' increased awareness of hygiene and cleanliness triggered them to buy more cleaning-related products, leading to a shortage of epidemic prevention products such as hand sanitizers and antibacterial wipes. This trend also drove consumer growth for daily chemical companies such as Hengan and Nice Group. -02- O2O Accelerates Digital Transformation of Offline Retail During the outbreak and the first half of 2020 after it, 41% of urban Chinese households purchased FMCG products through O2O home delivery services, which to some extent compensated for the significant decline in foot traffic in offline channels. Although O2O penetration declined in the third quarter, this convenient and efficient shopping method still attracted 31% of urban Chinese households to continue using it. It is worth noting that O2O not only compensated for the traffic lost by offline stores, but its digital business model is also continuously innovating and evolving. Leading consumer goods companies, led by Yili, Mengniu, and P&G, have actively cooperated with O2O retailers and platforms in the past 12 months, entering the fast lane of digital retail and creating incremental growth by meeting consumer needs instantly. -03- E-commerce Continues to Help Brands Attract New Consumers E-commerce (excluding O2O) remains the most important growth driver for China's FMCG market. In the past 12 months, 85% of urban Chinese households purchased FMCG products online, an increase of nearly 20 percentage points compared to last year. The latest research from Kantar Worldpanel shows that major companies can achieve customer acquisition by expanding their e-commerce platform layout more broadly and deeply. At the same time, offline channels still have room for growth. Data shows that traditional food company Shuanghui attracted 4.6 million new consumer households through e-commerce platforms and 8.9 million new consumer households through offline channels, totaling an increase of 10.1 million households after deduplication, indicating that consumer growth from offline channels is far from saturated. To reach more consumers, market leaders such as Yili, P&G, and Mengniu have actively increased investment in e-commerce platforms to expand their consumer base. While enjoying the growth dividends of e-commerce platforms, manufacturers need to establish effective omni-channel strategies to maximize consumer growth. -04- Deeply Tapping the Consumption Potential of Lower-Tier Markets The impact of the pandemic on the overall consumer market has made the growth potential of lower-tier cities more prominent. The rapid spread of short videos and the sinking of e-commerce have brought more growth opportunities for enterprises in lower-tier markets. In the 52 weeks ending October 9, 2020, the sales growth rate of the FMCG market in third- to fifth-tier cities was nearly 3 percentage points faster than that in first- and second-tier cities. Among the top 22 manufacturers with over 100 million households, new consumers from lower-tier markets contributed more than 75%. Although Master Kong's penetration rate has exceeded 80%, it still attracted more lower-tier market consumers in 2020, consolidating and strengthening its leading position. Master Kong added a total of 9.1 million urban consumer households, with new consumers from county towns being particularly noteworthy. Similarly, in the recent 52 weeks, Shuanghui also added 7.4 million consumer households from lower-tier markets. Notes:
- Kantar China Consumer Index can continuously monitor household purchases of more than 100 categories including food/beverages, cosmetics, and cleaning products. Its urban sample covers 20 provinces and four municipalities (Beijing, Tianjin, Shanghai, and Chongqing) in Chinese cities;
- First- and second-tier cities/upper-tier cities: Beijing/Shanghai/Guangzhou/Chengdu + provincial capitals;
- Lower-tier cities: prefecture-level cities + county-level cities + county towns;
- Mengniu Group includes Yashili and Bimyo;
- Nestlé Group includes Yinlu, Hsu Fu Chi, Wyeth, and Totole;
- Mars Group includes Mars and Wrigley;
- Colgate Group includes Colgate and Darlie;
- China Resources Group includes Jiangzhong Group, excluding Vanguard and Pacific Coffee. Source: Kantar (ID: KantarGroup)