China Shopper Report
Kantar Worldpanel and Bain & Company
FMCG categories vary significantly in recovery pace post pandemic
Trusted and Chinese brands display greater resilience
During the first quarter of 2020, when China locked down to contain the Covid-19 pandemic, FMCG spending declined 6.7 percent overall, with food and beverages down 7.7 percent and other categories down 4.6 percent, according to the China Shopper Report of Kantar Worldpanel and Bain & Company.
The intensity of the pandemic’s impact and the length of recovery varied for the 26 FMCG categories studied in the report. Spending for certain staples, like soy sauce, continued unabated. Other products, like household cleanser, boomed as people stocked up and then stabilized.
In a V-shape response, spending for a broad group of produces, including milk and skin care, initially plummeted but quickly recovered. Other socially-related categories—candy, make up, and wine—experienced a U-shape response.
Brand also influenced the severity of the lockdown impact. Across the 26 FMCG categories, the market value of sales declined less for trusted brands than for brands overall. Similarly, values sales declined less for Chinese brands than for foreign brands.
Covid-19 also accelerated several ongoing trends. The market value of online sales continued its strong growth, while offline sales value growth plummeted. And illustrating the pandemic-related concern with frugality, the market value of sales declined sharply for the premium sector and declined only modestly for the non-premium sector.
Among the takeaways for brands to successfully negotiate the post-pandemic “New Normal” are:
- Understand and prepare for both changing consumer behaviors, including concern with health and hygiene, and emerging consumption occasions, like home cooking.
- Anticipate how life will change for consumers and be ready with relevant innovative products and services.
- Serve both the premium and value segments. Concerned about household finances, post-pandemic Chinese consumers are looking for discounts and promotions. But they are still willing to pay a premium when it is merited.
- Reach consumers on the emerging channels, such as O2O and live streaming, where they increasingly shop.
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