---
title: "Kantar Worldpanel: Under Moderate Growth and Price Pressure, How Can FMCG Adapt to the New Reality of the Chinese Market?"
description: "At the 6th China FMCG Conference held in Shanghai from August 20-22, Kantar Worldpanel's China New Business Group Director Qin Yi shared insights on adapting to the new market reality under moderate growth and price pressure, providing accurate consumer behavior data for manufacturers and distributors."
author: "秦怡"
publisher: "New Distribution"
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published: "2024-08-28"
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# Kantar Worldpanel: Under Moderate Growth and Price Pressure, How Can FMCG Adapt to the New Reality of the Chinese Market?

> At the 6th China FMCG Conference held in Shanghai from August 20-22, Kantar Worldpanel's China New Business Group Director Qin Yi shared insights on adapting to the new market reality under moderate growth and price pressure, providing accurate consumer behavior data for manufacturers and distributors.

From August 20 to 22, the 6th China FMCG Conference, themed "Navigating the Era of Shrinking Volume," was held in Shanghai.
During the conference, over 100 guest speakers and more than 2,000 manufacturer representatives and FMCG professionals from across the country explored how distributors and brands can seek growth in the current environment.
Among them, Ms. Qin Yi, Director of the New Business Group at Kantar Worldpanel China, delivered a keynote titled **"How to Adapt to the New Reality of the Chinese Market Under Moderate Growth and Price Pressure?"** , providing accurate consumer behavior data for all manufacturers and enterprises.
**Moderate Market Growth**
Kantar Worldpanel is a company specializing in consumer behavior research, **monitoring all FMCG purchases from the consumer end, achieving full-channel monitoring of consumer purchase data from online to offline.** 
Therefore, Kantar Worldpanel is the only supplier in China providing both online and offline data. Based on specific consumer purchase behavior, it also integrates their consumption attitudes, media habits, etc., enabling 360-degree insights starting from the consumer.
Over 20 years of development in China, Kantar Worldpanel has helped over 100 FMCG companies grow in the market.
We see that China's GDP saw a moderate growth of 5% in the first half of this year. Although slower than the same period last year, it still maintained a certain level of growth.
Urban disposable income grew by 4.6%, and total urban consumer goods sales grew by 3.6%. Urban growth is quite good. Looking at the overall price index, it remained basically flat in the first half of the year, with CPI unchanged from the same period last year. In monitoring consumer purchases of FMCG, the entire FMCG market saw a 2.3% growth in the first half of this year.
Looking at different categories, including food, beverages, dairy, personal care, etc., only beverages maintained double-digit growth in the first half of the year, making it a promising track.
Is this growth due to consumers buying more volume or being willing to spend more money?
In fact, only beverages are a category with **"both volume and price rising."** Other categories like food, dairy, and personal care are mostly driven by volume, with average prices on a downward pressure channel.
**Optimizing Pricing Strategies**
Looking at different categories, functional drinks, packaged water, and traditional beverages performed well in the second quarter.
Although some categories did not perform well in the first half, categories like hand soap, soy milk, and carbonated drinks improved in the second quarter.
The current economic situation is not very good, and consumers are becoming increasingly rational. In such a rational state, should manufacturers and distributors only resort to price cuts and promotions? **The answer is no.** 
The average price growth rate for food and beverages in the first half was negative, and promotional activities did not show significant growth. Basically, for most categories, the promotion rate declined in the first half of this year.
Therefore, in such a rational state, catering to consumers with bigger promotions may not necessarily lead to growth.
Kantar Worldpanel's advice to brands: **To** **more optimally apply pricing strategies and launch corresponding solutions.** 
Help brands find out under what packaging forms consumers are willing to pay what price. In this price and packaging matrix, find a reasonable pricing strategy.
**Offline Retail Growth**
In the first half of this year, looking at overall consumer trends, only households with teenagers and mature households performed well. High-income households are less affected by economic shocks and are more willing to spend on FMCG.
This year's 6.18 was the most difficult ever. In such a situation, how to precisely target consumers becomes very important.
Data shows that during this year's 6.18, only three types of households spent more on FMCG than the same period last year: high-income households, young families with children, and young single couples.
For high-income households, categories like clothing textiles, bathroom cleaners, and oral care products are more likely to be purchased;
For young families, alcoholic beverages, fruit juice, and oral care products are more likely to appeal to them;
For families with children, they tend to spend more on fabric softeners, laundry products, and functional drinks.
Therefore, different categories had different performances during this year's 6.18.
In terms of channel growth, in the first half of 2024, Chinese consumers maintained a near-field shopping habit, with small supermarkets and convenience stores remaining the main growth channels in modern channels.
The offline channel is showing fragmentation. The top ten offline retailers held a 28.4% market share in the first half of 2023, which dropped by 1 percentage point by the same period in 2024.
Competition among top retailers is intensifying, and they are actively making changes and responses.
> For example, Gaoxin M Membership Store opened a store in Changshu, expanding to county-level cities; Sam's Club increased its market share by 0.6 percentage points in the second quarter;
>
> Hema NB Outlet achieved a growth of 190% in the second quarter.
These leading retailers are actively promoting different business formats to establish more connections with consumers.
Some regional retailers have also taken many actions, such as Shizu Group and Jiajiayue, which have developed different formats, making offline retail competition increasingly fierce.
Another format, snack stores, is also growing rapidly. Currently, nearly 20% of consumers visit snack stores to make purchases, and their purchase frequency and per-household spending have seen good growth compared to last year.
Looking at the consumer profile, it is mainly families with children who shop at snack stores more frequently.
**E-commerce and Out-of-Home Scene Growth**
E-commerce remained flat in the first half of this year, but different e-commerce platforms face different opportunities and growth.
Although consumer growth in e-commerce is basically flat, with a penetration rate of 75% reaching a mature state,
Different platforms have different situations. Taotian Group currently has the largest consumer base, while Douyin's rapid growth has surpassed Pinduoduo and JD.com, becoming the second-largest e-commerce platform by consumer base.
Currently, 38% of consumers purchase FMCG through Douyin, and the purchase frequency is increasing. Skincare products, paper products, solid drinks, and laundry products are preferred by consumers, with bathroom cleaners being particularly prominent.
With the easing of the pandemic, more consumers are going outdoors, and the growth opportunities in the out-of-home market are increasing. Since the first quarter of 2023, foot traffic has shown positive growth for basically five consecutive quarters, and purchase frequency has also seen good growth.
So it is certain that the growth opportunities in the out-of-home market have returned.
Which categories are consumers willing to buy in out-of-home scenarios? For example, ready-to-drink tea, chocolate, and fruit juice are popular both at home and out of home.
Looking at consumer shopping scenarios, in the first half of this year, all scenarios showed growth trends, with entertainment venues and sports venues showing significant foot traffic growth.
**How to establish connections with consumers through scenarios, making them think of the brand and purchase the brand in different scenarios, is the next growth opportunity for all brands.** 
To summarize the four key points shared today:
> First, the entire FMCG market is experiencing moderate growth, basically in a period of stable price pressure. How to respond to consumer demand in this moderately growing new market is particularly important. Second, as consumers become increasingly rational, there is a need for more optimized pricing strategies, providing corresponding products to consumers to help them make better choices. Third, different retail formats continue to differentiate. Under the rational consumption trend, the advantages of near-field formats, interest-based e-commerce, and bulk snack/discount stores are further highlighted.
>
> Fourth, the out-of-home scenario is a huge opportunity. How to seize the rapidly growing out-of-home opportunities, establish connections with consumers, and find new scenario growth spaces is a growth point that enterprises need to study in detail.
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 _Click **Read Original** to view_ _more about the 6th China FMCG Conference and the 3rd_ _China FMCG_ _Hard Discount Conference & the 3rd China FMCG Distributor Conference..._


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