For a long time, instant noodles and beer were consumers' favorites. However, even the 'ever-victorious generals' can fall into a quagmire. A recent report by Bain & Company and Kantar Worldpanel, 'The China Shopper Report', points out that in 2015, the sales growth of China's FMCG market was only 3.5%, the lowest in five years.
Are instant noodles and beer no longer popular because of a decline in the working population?
The report points out that products targeting blue-collar workers have been hit the hardest. In terms of sales volume, instant noodle sales fell by 12.5%, and beer sales fell by 3.6%. 'Value beer' sales declined more than premium beer. However, other categories continued to grow strongly. For example, cosmetics sales grew by 15.5%, and skincare products grew by 13.2%.
The report believes that the main reason for the decline in instant noodle and beer sales is the decline in the working population. The report also mentions another reason: low-end manufacturing jobs have been transferred to lower-cost regions such as Bangladesh and Vietnam.
In fact, the decline in sales is also due to changes in people's lifestyles and values. The vast majority of people choose to eat instant noodles because they are cheap and convenient. Now, with the rapid rise of online food delivery, several major players have rapidly expanded across the country, and users can order via apps and receive their food quickly. To some extent, this has eroded the instant noodle market.
Moreover, as people's material living standards generally improve, the pursuit of health naturally increases. The image of instant noodles as 'nutritious' and 'healthy' has gradually been magnified. A 2015 AC Nielsen survey found that three-quarters of Chinese respondents said they were willing to pay a higher price for foods considered 'healthy'.
Regarding the report's analysis of the reasons for the decline in beer sales, financial commentator Yu Fenghui disagrees, believing it to be biased.
Yu Fenghui: First, it can be said that the unemployment rate among the blue-collar class may be rising due to the downturn in manufacturing, but this cannot be reflected through these two consumer goods. Apart from premium beer, the prospects for the beer industry were not good to begin with, and ordinary people's consumption of beer is also very strong. This statement is at least somewhat biased.
China's consumption is transforming and upgrading, pursuing appearance and willing to spend more
The report points out that in 2015, the sales growth of China's FMCG market only reached 3.5%. Although the growth rate was not satisfactory, the growth of cosmetics was still commendable. Among them, skincare product sales grew by 13.2%, and color cosmetics sales grew by 15.5%.
Yu Fenghui believes that compared with the sales growth of cosmetics and skincare products, the decline in instant noodle and beer sales precisely indicates the improvement in the quality of Chinese consumers' consumption, which is an important manifestation of China's consumption transformation and upgrading.
Yu Fenghui stated that as income increases and the level of enjoyment rises, consumption of basic-level items like beer and instant noodles will decline. In the past, we only needed to eat and drink well to maintain basic survival needs, but now it's different. Now we pursue enjoyment items, good personal image, and high appearance. The demand for cosmetics will definitely increase.
Healthy foods perform well, packaged food sales decline
In addition, the report also shows that as consumers pay more attention to health, healthy foods perform well.
In 2015, packaged food sales showed a continuous downward trend. Sales of pastries, candies, and ice cream all fell by more than 11%, partly because Chinese consumers are more concerned about health.
At the same time, healthy foods performed very well. Yogurt sales grew by 20.6%, and functional drinks increased by 6%.
Where did the money go? Non-FMCG categories are more attractive
FMCG sales growth fell to a five-year low, so where did consumers' money go? The report believes that Chinese consumers with spending power have begun to shift their consumption focus to non-FMCG categories.
Audience waiting to watch a movie at a cinema.
As China's economy matures, the share of FMCG in total household expenditure continues to shrink, gradually approaching the level of developed countries. On the other hand, industries related to health, quality of life, tourism, and entertainment have all achieved double-digit growth. From 2011 to 2015, cinema revenue grew at an average annual rate of 35.4%, outbound tourism grew by 28%, and water purifier sales grew by more than 50%.
At the request of our distributor friends, the third phase of our B-end e-commerce inspection class will be held from July 9-12 to inspect three platforms: Wanshang Yizhan, Yunbao Shangmeng, and Weijie Chengpei. Distributor friends interested in transformation can join us for on-site inspections:
Organization format
- Company visit
- Actual market case visit
- On-site explanation
- One-on-one communication
Participating distributor friends only need to pay a registration fee of 200 yuan. Time: July 9-12, 2016. Location: Changsha, Xiamen.
Interested distributor friends can register by long-pressing the QR code below.
When adding friends, please reply 'Phase 3 registration'.
Previous inspection company cases:
Yishang Logistics Model Inspection (Second phase B-end e-commerce inspection team at Yishang Logistics)
Caiba Model Inspection
Jinhuobao Model Inspection
Beiquan Model On-site Inspection
Piduoduo Model On-site Inspection
-END-
The best FMCG distributor learning platform in China Dedicated to providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly
The most professional and practical knowledge base in the FMCG industry
Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base
| 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | 016 Distributor B2B transformation |
[Long press QR code to follow]