China retail market has been growing rapidly attributes to the booming economy and the increasing demand for consumption goods. China’s FMCG market is evolving quickly; the overall market continues to decelerate across all sectors and all city tiers; channel dynamics changed substantially with more challenges in offline channels facing the growing popularity of online shopping in China according to Kantar Worldpanel report.
Chinese shoppers demonstrate very low engagement with brands for most of the 26 categories Kantar studied. The average purchase frequency for the top brands among the categories is less than one purchase every four months—a very low purchase rate.
Low-frequency shoppers represent a significant percentage of each brand’s shopper base and contribute a significant share of its revenues. Kantar Worldpanel also found that the majority of shoppers left the brands they studied after two years. In order to compensate for losses, Kantar recommends brands continuously recruit shoppers.
Kantar Worldpanel reported 5.7% value growth for China’s FMCG market for the latest 52 weeks up to Sep 5th 2014 which remains low in comparison to historic levels. FMCG growth recovered to 6.9% in Q3 2014, higher than both Q2 (4.7%) and Q1 (4.6%).