China Insights

Rapid demographic change reshapes shopping in Asia

Jason Yu

Greater China General Manager

Retail 19.01.2018 / 17:00

2018 ABP 2 col

How retailers respond to consumers’ changing needs brought by ageing populations, shrinking households.

Kantar Worldpanel recently launched its second annual Asian Brand Power report, zeroing in on the powerful retailer partners behind Asian FMCG brands’ success, responding and tailoring to consumers’ changing needs, driving and reshaping the FMCG market in Asia. Rapid demographic change is a defining feature of the retail landscape in Asia. Ageing populations and urbanisation are combining to reshape the rhythms of shopping.

As the average age of populations increases, the average size of households tends to decrease. In Korea, for example, the proportion of single-person households is growing at between 4% and 5% per year and currently stands at 27.9% of all households. And it’s not just a changing age problem that is shrinking the size of Asian households. Across the region, rapid urbanisation is drawing young people to cities, and from extended family homes to smaller living spaces either occupied alone or shared with a partner and young family.

CN Asian Brand Power Single Family

Smaller households shop differently and for different reasons. Where wives and mothers once planned around a weekly or monthly shopping event, smaller households prefer to buy what they need, when they need it. When all members of the household are working, cooking and eating habits quickly start to change. Eating out is an affordable luxury that’s increasingly important to young, urban populations and represents a growing share of food consumption. Meals are less likely to be planned and shopped for in advance; more likely to take the form of ready meals picked up on the way to and from work. Fresh food, picked up to be cooked and eaten on the same day, is increasingly important to retailers looking to increase footfall at their stores.

Leading local retailers in various Asian countries have already responded to these changes.

In China, the fresh food supermarket Yonghui has innovated in response to these trends by diversifying its stores to fit different types of eating habits. Its new formats include stores that combine restaurants with supermarkets, neighbourhood convenience stores that offer fresh ingredients for the evening meal within walking distance, and an app-based delivery service that promises to deliver fruit, vegetables and chilled products to customers’ doorsteps within 30 minutes.

In South Korea, meanwhile, ready meals are playing a key role in the rapid growth of neighbourhood convenience stores such as CU, GS25 and 7-Eleven, which supply quick and convenient food options for workers stepping out of the once at lunchtime – or popping into a store on their way home. Average sales growth for lunch box type ready meals increased 166% at CU, GS25 and 7-Eleven during 2016.

Retailers respond to these demographic changes by understanding how to cope the needs of the ageing populations and shrinking households at the same time – less meal planning, prefer to buy what they need, when they need it. One of the most important trends reshaping the retail landscape in Asia is the move towards buying and selling products in smaller, single-use packages. There are many upsides of single-use packages. They encourage appetites for experimentation, allowing shopper to try new products and brands.

To know more details of Kantar Worldpanel’s Asian Brand Power report, please contact us.

Source: Kantar Worldpanel

Editor's notes

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