---
title: "FMCG Sales Seem to Have Stalled: Only 2% Growth in Q1"
description: "In Q1, FMCG sales grew only 2.0% year-on-year, far below the GDP growth of 6.7%. Sales through modern trade (hypermarkets, supermarkets, and convenience stores) declined by 0.5%, while e-commerce continued to surge with 48% growth."
author: "凯度消费者指数"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-05-07"
language: "en"
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---

# FMCG Sales Seem to Have Stalled: Only 2% Growth in Q1

> In Q1, FMCG sales grew only 2.0% year-on-year, far below the GDP growth of 6.7%. Sales through modern trade (hypermarkets, supermarkets, and convenience stores) declined by 0.5%, while e-commerce continued to surge with 48% growth.

In the first quarter, FMCG sales grew only 2.0% year-on-year, far below the GDP growth of 6.7% during the same period. Sales through hypermarkets, supermarkets, and convenience stores declined by 0.5%, but e-commerce channels continued to grow strongly at 48%.

According to the latest report from Kantar Worldpanel, the FMCG market remained in a downturn in Q1, with sales increasing only 2.0% compared to the same period last year, significantly lagging behind the GDP growth of 6.7%. Modern trade (hypermarkets, supermarkets, and convenience stores) saw a slight decline of 0.5%, as customers continued to shift to other retail channels, such as e-commerce.

From a regional perspective, modern trade maintained healthy growth in the western region, driven by hypermarkets, with sales up 4.6% year-on-year.

**International Retailers' Decline Stabilizes; RT-Mart Leads**

Entering 2016, international retailers' market share fell to 13.2% in Q1. However, the decline has narrowed, showing signs of recovery (compared to Q1 2015, the drop was only 0.3 percentage points, the smallest decline in recent years). Walmart Group's market share has rebounded over the past 12 months, reaching 5% in Q1 this year, up 0.2 percentage points from Q1 2015. The western region is a key driver of Walmart's overall growth. In the west, Walmart's market share reached 6.4%, up 0.7 percentage points year-on-year.

Local retailers performed well in Q1. RT-Mart's market share reached 8.3%, benefiting from its strong performance in lower-tier cities.

Major Retailer Shares in Modern Trade - Urban China

**Regional Retailers Continue to Accelerate**

Yonghui maintained steady growth, with a 0.4 percentage point increase year-on-year in Q1, reaching a national market share of 2.6%. Yonghui entered the top ten in the competitive eastern region with a 1.5% market share.

In the southern region, Wushang Group achieved a 6.5% market share in Q1 by continuously attracting new customers. If it realizes its expansion plan of opening over 100 new stores this year and benefits from its strategic cooperation with Yonghui, Wushang Group is expected to narrow the gap with Walmart, the leading retailer in the region.

Sichuan's Hongqi Supermarket attracted attention last year for its acquisition of Huhui. However, by Q1 this year, the acquisition had not yet translated into improved market position, with its share remaining at 1.3%.

**E-commerce Channels Remain Thriving**

In contrast to the slight contraction in modern trade, China's e-commerce channels remain thriving, with sales growing 48.1% in Q1. More and more consumers are trying to purchase FMCG products through e-commerce, with channel penetration increasing by 33.7%. This growth is particularly evident in lower-tier cities – with county towns growing fastest, driven by large-scale logistics construction and offline promotions, penetration increased by 48.9% year-on-year.

Competition among e-commerce giants is also intensifying. Tmall, following its "Beijing-Hangzhou dual home" strategy, has attracted more consumers through price promotions, especially in the weaker first-tier markets.

**Disclaimer: This article has been authorized; please contact the author for reprints.**

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