Click 'Read Original' for details. In 2018, China's personal care market continued to grow, reaching 261.9 billion yuan. Domestic brands (such as Shanghai Jahwa) showed impressive revenue growth, while some international brands (such as Unilever) experienced negative revenue growth. In China's home care products, fabric care products accounted for 63.3%. Market concentration is relatively high, with the top 10 companies holding over 60% market share, among which Liby and Nice Group occupy the first and second positions with significant advantages. In 2018, the retail sales growth of tobacco and alcohol products slowed. From January to November 2018, China's tobacco and alcohol sales reached 350.23 billion yuan. Among alcoholic products, mid-to-high-end baijiu, imported beer, and imported wine saw sales increases of 22.0%, 15.0%, and 5.0% year-on-year, respectively. China's snack food market continues to expand, expected to approach 3 trillion yuan by 2020. In terms of sales channels, e-commerce's share of sales continues to rise, In 2018, the online market size of snack foods grew 23.4% year-on-year. In 2018, China's beverage industry remained sluggish, with beverage production declining 13.1% year-on-year. However, health-oriented beverages such as low-sugar/sugar-free, fermented drinks, and dietary fiber drinks are increasingly popular among consumers. With rising living standards and increased willingness to purchase high-end FMCG products, the scale of China's FMCG industry will continue to grow steadily in the future. Core Views Excerpts from the Report
FMCG covers a wide range of categories Fast Moving Consumer Goods (FMCG) refer to daily necessities with short usage cycles and high consumption frequency. Product characteristics of FMCG The convenience, visual appeal, fluidity, and homogeneity of FMCG products lead consumers to have simple, rapid, impulsive, and emotional consumption behaviors. Drivers of China's FMCG industry development environment Social demand: Total retail sales of consumer goods continued to rise in 2018 In 2018, China's online retail sales of physical goods reached 7 trillion yuan In 2018, retail sales of all FMCG subcategories continued to grow In 2018, retail sales of all FMCG subcategories continued to grow: grain, oil, and food increased 10.2% year-on-year; beverages increased 9.0%; tobacco and alcohol increased 7.4%; and daily necessities increased 13.7%. In 2018, China's FMCG sales growth rate reached 5.2% FMCG is the largest consumer expenditure item for residents In 2018, in the per capita consumption expenditure structure of national residents, food, tobacco, and alcohol were the largest expenditure items, accounting for 28.4% of per capita consumption expenditure. Including food, tobacco, alcohol, and daily necessities as FMCG categories, FMCG consumption accounted for approximately 34.6% of residents' consumption in 2018, making it the largest item in residents' consumption expenditure. Capital enthusiasm for FMCG has significantly cooled According to the latest data, in 2018, there were 238 major capital events in China's FMCG sector, an increase of 10.2% compared to 2017; however, the amount involved was 247.61 billion yuan, a year-on-year decrease of 52.1%, indicating a cooling of capital enthusiasm for FMCG. FMCG mergers and acquisitions show characteristics such as strengthening omni-channel layouts and cross-industry collaborations. Favorable factors for FMCG industry development Main unfavorable factors for industry development China's personal care market has diversified derivative categories In terms of the composition of China's personal care market, skincare, hair care, oral care, color cosmetics, and bath products are the top five categories, contributing 91.0% of market sales. With improved consumer hygiene habits and the popularity of mass daily chemical products, basic daily chemical products such as hair care, bath, and oral care have entered a stable development phase. Future competition will focus more on market share battles and challenges to existing leading brands. China's personal care market retail scale continues to expand China's hair care product market grows steadily In 2018, China's oral care product market grew 5.4% Domestic brands show impressive revenue growth, while some international brands experience negative revenue growth China's home care product market continues to grow steadily Over 60% of China's home care products are fabric care products Among China's home care products, fabric care products account for 63.3%, which is 10.4 percentage points higher than the global proportion. In contrast, surface care, air care, and bleach products have lower proportions than global levels. Domestic enterprises' market share exceeds international daily chemical giants Compared to personal care, China's home care market has relatively higher enterprise concentration, with the top 10 companies holding over 60% market share. Among them, Liby and Nice Group occupy the first and second positions with significant advantages. Among the top 10 companies in the home care industry, 6 are local enterprises. In 2018, retail sales growth of tobacco and alcohol products slowed In 2018, mid-to-high-end baijiu, imported beer, and imported wine grew rapidly In 2018, China's online retail sales of edible physical goods grew 33.8% In 2018, China's beverage production declined 13.1% year-on-year In 2017, China's beverage production began to decline, from the peak of 183.452 million tons in 2016 to 180.512 million tons, a year-on-year decrease of 1.6%. In 2018, beverage production was 156.792 million tons, with a larger decline of 13.1% year-on-year, indicating a persistently sluggish market. Health-related beverages are highly sought after Typical listed FMCG companies in China in 2019 Yili: Market share advantage continues to consolidate, industry landscape becomes clearer According to the latest data, Yili's operating revenue in 2018 approached 80 billion yuan, and the gap with its biggest competitor, Mengniu, expanded from 3 billion to 8 billion to 10 billion. C&S Paper: High-end products account for over 60% of sales Development trends of China's FMCG industry in 2019 China's FMCG market size will steadily rise Analysts at iiMedia Consulting believe that with rising living standards and increased willingness to purchase high-end FMCG products, the scale of China's FMCG industry will continue to grow steadily in the future. In 2018, FMCG consumption accounted for approximately 34.6% of residents' consumption, making it the largest item in residents' consumption expenditure, highlighting the important position of FMCG in residents' consumption. In 2018, China's total retail sales of consumer goods reached 38.1 trillion yuan, with FMCG sales growth rate reaching 5.2%, among which personal care grew fastest at 10.3%. The share of e-commerce channels in China's FMCG industry will continue to grow Analysts at iiMedia Consulting believe that with the continuous improvement of residents' consumption levels, the deepening of consumers' online shopping habits, and the increasingly standardized operations of FMCG companies on e-commerce platforms, the sales share of e-commerce channels in all FMCG channels will maintain rapid growth in 2019. In 2018, China's total retail sales of consumer goods reached 38.1 trillion yuan, of which online retail sales of physical goods reached 7 trillion yuan, a year-on-year increase of 28.1%. Online sales of edible goods increased 33.8% year-on-year, and online sales of daily necessities increased 25.9% year-on-year, maintaining high growth of 25% for three consecutive years. It is expected that the online FMCG market will continue to expand in the future.