Growth in consumer FMCG spend in emerging markets has slowed significantly, according to new data from Kantar Worldpanel.
The new report highlighted how spend was down from 8.8 per cent in the year to June 2013, to 7.5 per cent in the corresponding period to June of this year.
This is quivalent to €6.6bn ($8.3bn) of lost growth, demonstrating the effect of a cooling in the global economy.
The research also forecasts a further reduction to 7 per cent by June 2015.
The drop is largely driven by a slowdown of consumption in Asia where FMCG growth is now at 5.2 per cent, down 3.6 percentage points compared with last year – around €12bn ($15bn).
The contraction was felt acutely in China where FMCG growth has fallen by one-third in the past two years while Latin America is now growing at 13 per cent, compared to 8.7 per cent last year.
Although still performing strongly compared with mature markets in Europe and North America, the reduction in emerging market growth is significant.
Jason Yu, general manager at Kantar Worldpanel China, commented: “Slowing economic growth across many emerging economies has led to shoppers reining in their spending on everyday goods. We now face a new reality where FMCG growth is more moderate. Competition will become fiercer as the size of the prize shrinks."
Brands will need to be even smarter when deciding which markets to target and when developing their approach within each country, he said.
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