SunTzu Recruit, a leading headhunter in China, observes that the fast-moving consumer goods (FMCG) industry boasts a vast and complex supply chain, encompassing various stages from raw material sourcing to after-sales services. The diversity of raw materials directly affects product quality and costs. Manufacturing relies on large-scale automated production lines to ensure rapid production and supply. Distribution is a key link in the industry chain, involving logistics, warehousing, and distribution, crucial for product circulation speed and cost control. As the final link in the industry chain, retail directly caters to consumers, including supermarkets, convenience stores, and e-commerce channels. For certain FMCG products like electronics, after-sales service is equally important, covering product maintenance and return services.
Current Situation and Future Trends
In 2024, the FMCG industry market in China is expected to continue rapid growth, albeit with fiercer competition. Changes in consumer demands, such as preferences for health and environmentally friendly products, as well as increased demand for personalization and customization, are driving the market towards healthier and more environmentally friendly products. The diversification of sales channels, particularly the rise of e-commerce platforms, makes online sales an undeniable force. With intense market competition, numerous brands, and serious product homogenization, companies need to continuously innovate in quality, price, and service.
Emphasizing quality and experiential aspects will be critical in the market, as consumers pay more attention to aspects such as raw materials, production processes, and packaging. Digital transformation, including the development of smart home products and the emphasis on social media and online marketing, will be new growth points for companies. Environmental protection and sustainability are also important trends in the market, requiring companies to focus on environmental protection and sustainability in product design, production, and packaging. Market strategies focusing on segmentation and personalization, as well as the integration of online and offline business models, will be key for companies to adapt to market changes and meet consumer demands.
Market Overview in 2024
China’s urban FMCG market saw a moderate recovery in the first quarter of 2024, with sales growing by 2.6% year-on-year. The eastern region showed more positive growth, increasing by 7%. Lower-tier markets continue to be the engine of China’s consumer market, with sales in town-level markets growing by 3.9% year-on-year. In terms of modern channels, sales at hypermarkets declined slightly, while large and small supermarkets and convenience stores maintained growth. Membership stores performed well, with sales increasing by over 20% year-on-year.
Online Channels and Discount Store Formats
The penetration rate of the Douyin platform in Chinese urban households for purchasing FMCG exceeded 28% in the first quarter of 2024, showing significant improvement. Discount store formats also accelerated their expansion, with 5.9% of Chinese urban households purchasing FMCG from discount snack shops in the first quarter of 2024, indicating development potential in offline cities.
Food and Beverage, Health, Beauty, and Pet Markets
The food and beverage market overall rebounded, with sales reaching 1884.5 billion yuan in 2024 Q1, a growth of 14.4%. In the health sector, online sales of health foods saw a slight increase of 2% year-on-year, with overall sales surpassing 25 billion yuan. The beauty market rebounded, with sales reaching 983.3 billion yuan, a slight increase of 1.3% year-on-year. The pet market saw sales of 17.04 billion yuan, a slight increase of 0.4%.
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