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Imported goods outgrows market by 6 times

Martin Guo

Editor-in-Chief, Kantar China Insights

Shoppers 23.11.2016 / 10:20

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In the past year, 93% of Chinese urban families have bought imported goods, or equivalent to an increase of 5.12 million more families.

History doesn’t repeat itself, but it often rhymes.

More than 30 years ago, when China just opened up to the world, the label of “imported” stood for high quality, good taste and luxury. Imported goods automatically jumped onto the top of every Chinese consumers’ wish list back then.

Fast forward to today’s China, we hear more news about global multinational companies being defeated by home-grown Chinese giants than the other way round. However, that’s not the full story.

The overall fast moving consumer goods market has entered a long period of simmering growth: the growth for Q3, 2016 was only 3.6% from a year ago, compared with over 15% in Q3, 2011. But imported FMCG is one of the few remaining bright stars:

In the 12 months ending June, 2016, 93.3% of urban Chinese families have bought or received imported FMCG goods as gifts, 3.1 percentage points higher than in the same period of 2014, which equivalent to 5.12 million new urban families. In the 12-month period, sales/consumption of imported goods also grew 18% than in 2015, 6 times faster than market average.

“According to Kantar Worldpanel, this was not only driven by imported milk, but also categories such as coffee (+32%), instant noodles (+29%), snack (+26%), etc.,” said Jason Yu, General Manager of Kantar Worldpanel China. “In the non-food categories, hair care, personal wash and cosmetics also had significantly strong growth.”

Kantar Worldpanel China continuously measures household purchases over 100 product categories including cosmetics, food and beverages and the toiletry/household sector through its 40,000 sample families. Its national urban panel covers 20 provinces and four municipality cities (Beijing, Tianjin, Shanghai and Chongqing). The channels within its monitoring scope modern trade (supermarket, hypermarket, convenient stores), traditional trade (grocery, free market, whole sale), e-commerce, overseas shopping, direct sale, work unit/gifting etc.

Despite the growth of important products across all channels, e-commerce and work unit/gift reported particularly strong performances. Imported goods sales through e-commerce grew by 60% from a year ago, while gift channel accounts for almost one third of the import food Chinese consumers bought/got. 

“Chinese consumers like to buy imported products as gifts when they visit families and friends, because it demonstrate good will and hospitality,” Jason said.

Over the past few years, Kantar Worldpanel also observed stronger growth of imported food not only in tier 1 and 2 cities, but also in lower tier cities, as those products are increasingly accessible to consumers there through different channels, especially e-commerce. We believe the development of cross-border e-commerce as well as key platforms such as Tmall.hk, JD etc. are fueling the rapid expansion.

The strong growth of imported brands was a result of Chinese consumers’ desire to buy more high quality premium products. But for brands, it also means that in the domestic market are facing even more competition from abroad.

Source: Kantar Worldpanel

Editor's notes

* Tier 1, 2 cities: Beijing, Shanghai, Guangzhou, Chengdu and provincial capitals; Tier 3, 4 cities: prefecture-level and county-level cities as well as counties;

* To reach the author, or to know more information, data and analysis of China's FMCG market, please contact us.

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