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Growth eases in Chinese fast-moving consumer goods industry

Growth slowed in the Chinese fast-moving consumer goods industry in the first half of this year, according to a report on Chinese shopping habits.
The report, the second volume of Bain & Company and Kantar Worldpanel’s annual China shopper report Local Insurgents Shake Up China’s ‘Two-Speed’ Market, showed urban shoppers have increased their spending by only 3.3 per cent during the period following a decline in Chinese New Year gifting and pre-stocking year-end purchases.
Despite the low figure, the growth rate is still significantly higher than those for matching periods in the years previous, confirming the strong recovery in the sector reported for the second half of last year.
The report on the Chinese fast-moving consumer goods industry is considered further testament to observations showing the country’s trajectory as “two-speed”, as personal and home care spending grows faster than food and beverage. It also emphasises the play of “local insurgent brands” gaining share against both local and foreign brands. But the authors did not identify those brands.
Kantar Worldpanel Greater China MD & report co-author Jason Yu said: “We are seeing local insurgent brands continue to grow in China, and it demonstrates just how unique and fascinating the landscape is, as well as how challenging it is to navigate effectively.”
Most of the insurgent brands are relatively small and growing twice as fast as others in their category, contributing disproportionately to measurements of growth in their category by almost 15 per cent.
Bain’s Greater China consumer products practice partner and report co-author Bruno Lannes said local insurgent brands are taking increasing share from global brands.
“These insurgents demonstrate an entrepreneurial mission, Chinese consumers’ focused innovations, and more speed and agile operating models, which are giving them an advantage in this ever changing market. If foreign brands want to compete, they need to adopt a more distinctly Chinese insurgent approach.”

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