The following is the China’s FMCG market will grow by 0.5% in 2020 From CTR recommended by recordtrend.com. And this article belongs to the classification: CTR.
The latest report of the Kay consumer index (CTR in China) shows that sales of FMCG in China’s city increased by 0.5% in 2020 under the influence of COVID-19.
Although the market has recovered steadily since the second quarter, the annual growth rate is still far lower than that of previous years. The latest data from the National Bureau of statistics also shows that the total retail sales of social consumer goods in 2020 dropped by 3.9% year on year.
In 2020, the per capita disposable income of urban residents in China will increase by 1.2% in real terms. The slowdown of consumption power growth will make consumers more rational. The “two speed growth” trend of pursuing high-end and cost performance will continue in the future.
From the performance of different categories, driven by disinfection and cleaning products, the family care category increased by 7.9% year-on-year, with the strongest momentum. Food categories rose by 2.7% year on year, among which instant noodles and frozen food showed explosive growth driven by the housing economy. Due to the decrease of social scenes, mask economy and other factors, cosmetics and beverages are still recovering from the epidemic.
2、 Channel performance
From the perspective of channel performance, in the context of the epidemic, overseas tourism and gathering of relatives and friends are limited, resulting in the most direct impact on overseas shopping and gift giving, with a year-on-year decrease of 59% and 19% respectively in 2020. The purchase of FMCG tends to be localized, digital and near-field. In the physical channels, the performance of hypermarkets and supermarkets was low, down 7% and 6% respectively compared with last year, while e-commerce channels (+ 35%) and small supermarkets (+ 9%) were booming.
In 2020, the performance of major retailers continued to differentiate. Yonghui group surpassed Wal Mart and became the third largest retailer, reaching a new high in the fourth quarter. On December 19, 2020, Yonghui officially entered the era of thousands of stores. Through the nationwide layout, it deeply cultivated the core areas, consolidated the regional advantages of Fujian, Chongqing, Sichuan, Beijing and other provinces and cities, and actively penetrated into the sinking market. Gaoxin retail group has maintained its leading position in the market. With the exploration of digital transformation and new formats, its annual market share has increased slightly compared with that in 2019. Under the background of normalization of epidemic prevention and control, regional retailers such as Wumart, spar and Bubugao actively promote the in-depth construction of o2o business, member operation system and supply chain through rapid digital transformation, and increase the exploration of the national market, and their shares have increased significantly.
Market Research of CCTV in 2021
Data source: Kaidu consumer index, Suning group includes Carrefour and Suning stores.
In the face of the repeated sporadic epidemic and the change of consumer shopping behavior pattern at the beginning of this year, China’s retail market is still facing great uncertainty and challenges. In the first quarter of this year, the sharp drop in passenger flow during the local Spring Festival and Spring Festival transportation will make “home consumption” and “community business” become the key words of growth again. Consumers’ demand for e-commerce and o2o plus services, especially high-quality, safe and healthy food and fresh products, will continue to increase.
3、 Prospects for retail market in 2021
1. Home consumption scenario is still the theme of growth
The epidemic has caused heavy damage to restaurants outside the home. According to the data released by the National Bureau of statistics, in 2020, the national food and beverage income dropped by 16.6% year on year. The user survey of the Kaidu consumer index also showed that nearly 90% of consumers prefer to eat at home after the epidemic, “home” life has become normal. Although the market outside the home will gradually recover in the second half of 2020, the sporadic outbreaks in various places and the decline of consumer mobility around the lunar new year will make “home” still the most important consumption scenario in 2021. Chinese consumers will be more adaptable to the “home” life, help consumers improve the quality of “home” life, and meet the life / work / entertainment / leisure scenes of different members of the family. The products and services will have sustained strong demand and huge growth potential.
2. The e-commerce platform is committed to experience upgrading, and live broadcasting with goods has entered the track of rational development
According to the research of Kaidu consumer index, e-commerce in the FMCG market will grow by 35% year on year in 2020, and maintain a high-speed growth against the trend. In the face of new demand and new social e-commerce competition, Alibaba, Jingdong and other head e-commerce platforms actively gain incremental through innovation. On the one hand, the competition between e-commerce giants returns to the essence, optimizing the convenience of shopping and improving the shopping experience. On the other hand, the normalization of e-commerce promotion and the extension of promotion cycle also make the needs of consumers more stable and sustainable.
In 2020, the “live broadcast + e-commerce” mode with high interactivity and price advantage will usher in explosive growth under the stimulation of “residential economy”, and become the biggest outlet for the development of e-commerce. Tiktok, short hand video and other short video platforms are entering the Kwai Chung electric business, which is the driving force for the market. At present, e-commerce live broadcasting is still the mainstream of online celebrities, but store self broadcasting and store live broadcasting will gradually become a new driving force to impress consumers through products and services, cultivate consumers’ loyalty, and turn audiences into long-term fans. Strong commodity supply chain capability and after-sales service capability will also promote the live delivery into the track of healthy and rational development and long-term operation.
3. Different retail formats build a complete community ecosystem
Close to meet the needs of residents’ daily life has become the focus of attention after the outbreak of the epidemic, which brings huge opportunities for community commerce that can solve the 24-hour living needs of consumers. Fresh supermarket, convenience store, community group buying and other near-field formats of the community are emerging. Since 2020, many retail enterprises have put more emphasis on the layout of community ecology. Among them, there are many leading retailers who used to take hypermarkets as their core business. For example, RT Mart launched its first community fresh supermarket “little RT Mart” in July last year, which will enter into large-scale expansion this year. In September, the medium-sized supermarket “big RT Mart super” has made meticulous efforts in categories, returned to just need, and focused on consumption The demand for three meals a day also improves the operation efficiency.
Community group buying is undoubtedly the most popular form of community business in 2020, which has played a significant role in solving the problem of buying vegetables during the epidemic period. According to the latest research of Kaidu consumer index, the monthly penetration rate of community group buying among users over 25 years old in China’s 1-3 tier cities reached more than 20% in December last year, with 7.6 purchases per capita. This new retail model relies on the owners (heads) of small shops in the community to build a highly social “acquaintance” business, and affordable prices are the primary driving factors for consumers to try. The Internet giants will leave the market one after another in 2020, opening a mixed battle mode. According to the prediction of Kaidu consulting, the scale of community group buying market will exceed 100 billion yuan this year. Under the guidance of new policies and regulations, community group buying will develop in the direction of standardization and order.
E-commerce has become the mainstream channel of China’s retail market, and community commerce is the most important battlefield for physical retailers. In the future, the development of community commerce will not only meet the needs of daily shopping, but also gradually expand into a wider community service ecosystem. At the same time, the online and offline layout, the establishment of community ecological matrix, fine operation, will become a huge opportunity for retail growth.
4. O2o intra city retail will enter the era of multi category and high frequency
Another hot track in 2020 is o2o intra city retail, which is more large-scale than community group buying, whose profit model is not clear. According to the Kaidu consumer index, nearly 60% of Chinese urban consumers will purchase FMCG through o2o distribution platform in 2020. Throughout the year, the penetration rate in the first quarter was the highest, more than 40%. The epidemic has cultivated a large number of new users, and the retention rate of these new customers can reach more than 50%. Compared with the low price and sinking of community group buying, o2o intra city retail meets more consumers’ immediate needs, and the price sensitivity of target users is low, and the scope and frequency of purchasing categories are gradually expanding.
In 2020, Internet platforms such as tmall supermarket, e-mall and meituan will increase their investment in retail business in the same city. At the same time, the entity supermarkets represented by RT mart, Yonghui and Wal Mart also speed up the development of o2o business, with both self operated and third-party platforms. Combined with the logistics performance ability of the platform and the abundant commodity supply of supermarkets, intra city retail will continue to prosper and become a more frequent retail service mode.
5. Regional retailers try to expand the whole country cautiously
In 2020, under the haze of the epidemic situation, the number of stores opened by physical supermarkets will drop sharply compared with the previous year, the new retail mode of supermarket + catering will cool down, and some leading retail brands will rise against the trend, either by opening new stores or by purchasing to expand their market share and achieve sustainable growth. Yonghui has entered Yunnan, Jiangxi, Guangxi and other provinces and cities since 2020. Jiayue, a leading entrepreneur in Shandong Province, expanded its business mainly by “buying” and entered Hebei, Anhui, Jiangsu, Inner Mongolia and other markets one after another. Compared with the full coverage of Yonghui’s 29 provinces, jiajiayue’s expansion features tend to a high-density layout. At present, it covers five provinces, steadily opening up a space for long-term growth.
The national expansion of retail brands must be based on a strong supply chain system and operational efficiency, and effectively and accurately grasp the differences of consumption habits in different regions, so as to meet the changes of consumers through the updating and iteration of different business brands and store models. The era of “horse racing and land enclosure” driven by capital is gone forever, and it may be a new shortcut for Jingdong Qixian to open local market with the mode of light assets in combination with regional giants. In 2021, excellent regional retailers will seek more expansion through different ways while further consolidating regional concentration, and seize more new market space based on the output of supply chain and brand advantages.
CTR: Research Report on user behavior trend of mobile banking in China in 2018 (with download) CTR: Research on 5g application scenarios in 2021 (with download) CTR: white paper on short video full link marketing in 2020 (with download) CTR: Trend of China’s media market in 2020 (with download) CTR: China’s advertising market and advertising in the first half of 2020 Main marketing trend (with download) CTR: April 2020 TV advertising case cost decreased by 31.6% year on year CTR: March 2020 TV advertising case cost decreased by 37.0% year on year CTR: 2019 China media market trend (with download) CTR: 2019 China advertising market trend (with download) CTR: 2019 Q2 FMCG market sales increased by 6.9% year on year CTR: review and Prospect of China’s advertising market from 2018 to 2019 (download attached) CTR: in November 2018, China’s advertising market revenue decreased by 9.7% year on year; CTR: in February 2020, traditional outdoor advertising expenditure decreased by 16.9% year on year
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