Tag Archives: online grocery in china

Is eCommerce Disrupting the Consumer Packaged Goods Market in China?

Global Consumer Goods Brands Disrupted by eCommerce in China

The findings of Kantar’s Worldpanel Brand Footprint Ranking surprised me last year, when I was just starting to learn about Global Consumer Packaged Goods brands. In my blog for Clavis Insight I described my experience learning about the significance of the brand Maggi for the first time. I wrote in June 2013: “The #1 status of Maggi reflects the world economy, where China is the world’s most populous country with the fastest growing economy. China’s ecommerce sales grew 65% between 2011 and 2012 and it is set to overtake America’s according to a recent report by the China Internet Information Center (reported in TechCrunch).”

These were foreboding statements. First of all, China has overtaken the US in eCommerce sales; secondly populations in China and the continent of Asia are indeed growing, and increasing their spending both offline and online – but they’re actually spending more on regional brands than ever before.

Kantar Worldpanel’s Brand Footprint Ranking 2014 report states: “For global food and drink brands…achieving …local domination in Asia is difficult. Local Asian brands in the Brand Footprint ranking grew at 3.1%, faster than the growth for global brands in the region (2.6%) and ahead of Latin America (1.2%). Globally, the world’s most chosen FMCG brands grew their footprint by 1.7%.”

The 10 Most Chosen Brands in Asia revealed by Kantar Worldpanel’s Brand Footprint study, followed by their consumer reach points in millions, are:
1. Colgate 2,111
2 Mi Sedaap 1,902
3 Indomie 1,820
4 Lifebuoy 1,652
5 Nescafé 1,328
6 Pantene 1,022
7 Kapal Api 944
8 Maggi 940
9 Surf 922
10 Lux 913

The Kantar study continues: “In China, foreign brands lost share in 15 out of 26 categories, notably in oral care, cosmetics and juice. As Chinese businesses become more market-oriented they are leveraging their extensive knowledge of consumers’ lives and acting boldly in response to local trends to establish a strong brand affinity.”

What I speculate here is that eCommerce could be a factor in this loss of market share. Kantar briefly discusses digital in its report, predicting that online consumer packaged goods sales will rise to 5.2% of the market by 2016 in the UK, France, US, China, Spain, Taiwan and South Korea. There is simply no research  – or at least egrocers and eCommerce sites have not released it yet – on exactly what percentage of their consumer packaged goods sales are online Globally. (Note: Tesco is an exception, they are one of the first egrocers to have released their online grocery sales.) If Kantar had those numbers they might learn that eCommerce may be disrupting the growth of Global consumer packaged goods brands. Why?

Take a look at my brief report “Online Grocery Shopping in Asia” – on slide 14 in bold print I write “Most eCommerce occurs on digital marketplaces.” Consumers are buying consumer packaged goods at those digital marketplaces, and this is most likely aiding in the 3.1% growth of local Asian brands.  No one has the exact numbers right now, but the evidence is right there. John Fang of the China market research group describes the current scenario: “Worries about pollution may be making consumers shift to online shopping even faster. So brands absolutely need an online presence to reach their customers where they are looking to buy.”

A Super Quick Look At Online Grocery in Asia

Online Grocery in Asia

A quick walk through the business section of a fairly reputable bookstore left me empty handed this past week. (Yes, I still read books, it’s a nice break from the screen I look at most of my waking hours.) I was looking for a book or books on China or Asia, specifically on the way people in China interact with the web (specifically digital presentation) and how it differs from Americans or Europeans. I found lots of books about digital marketing, but nothing specifically about China or Asia. Just like writing about online grocery, ecommerce in emerging markets is still a relatively new field.

A quick Google search brought up a few statistics and case studies about online grocery in Asia – which I have compiled into a short presentation. You can see the presentation at my Slideshare page here.