Consumer spending on FMCG in China saw a 6.4% growth in value in the 12 weeks ended 9 August 2019, according to the latest data from Kantar.
It was mainly driven by increased basket value and frequency of sales.
Sun-Art Group maintained its position as the top retailer in China, with a 2.8% increase in sales value compared with the same period last year.
Growth Drivers
Lower-tier cities drove the retailer's recovery, which recorded both sales and penetration growth, the study noted.
The retailer also accelerated the convergence of its two banners at the end of 2018, enabling Auchan to leverage services and technological capabilities from Sun-Art's infrastructure.
RT-Mart strengthened its online business and improved the efficiency of its physical stores as part of its digital transformation strategy.
It also restructured its offerings by strengthening the fresh food and imported products’ displays to meet the needs of middle to upper-tier consumers.
Online Sales
Around 58% of urban Chinese households purchased FMCG online during the period, boosting e-commerce sales by 36%.
More than 50% of the customers in lower-tier cities made their household purchases online in the 12 weeks to 9 August, corresponding to a 10 point year-on-year growth in market penetration for the channel.
Alibaba's online market penetration grew by more than 10 percentage points, particularly in lower-tier cities, the study pointed out.
It was mainly driven by initiatives taken by the e-commerce giant to cater to a broader base of users, like simpler interfaces for first-time or infrequent users from less developed areas.
Store Formats
Alibaba also focused on exploring different store formats to cater to the food consumption patterns of different consumer groups, such as Hema Mini for suburban citizens and Hema pick-and-go for office goers’ breakfast and snacking requirements.
Young families were found to shop in Hema at an average frequency of three times in the 12-week period, contributing to nearly 50% of its sales.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
