(Reporter Liu Yusong) According to the recently released "China Shopper Report 2022, Series I" by Bain & Company and Cato Consumer Index, the overall sales of China's FMCG market grew by 3.1% in 2021.

The report notes that in 2021, consumers increased their shopping frequency as the new crown pneumonia outbreak was effectively prevented and controlled, driving sales growth of 4.1%. The increase in sales was also driven by bulk purchases made during the "Double 11" and "Double 12" promotions in the fourth quarter; however, the holiday sales also contributed to a 0.9% decline in average selling prices. 2021 FMCG sales grew by 10.6% in the first quarter and declined by 1% in the third quarter, making it a roller-coaster year for the industry.

Against this backdrop, e-commerce was the only channel to maintain growth in 2021, although the growth rate has dropped to 15% from around 30% in previous years. E-commerce platforms are also gradually diverging, with Poundland and interest-based e-commerce platforms including Jitterbug and Racer winning the hearts and minds of more and more consumers.

The FMCG development trend at the end of 2021 also continued into this year, but the situation started to change in March and April. According to the aforementioned report, in the four weeks from March 26 to April 22 this year, FMCG sales increased by 5.6% year-on-year and the average selling price fell by 5.7%, the biggest price drop in recent years, reflecting consumers' increasing price sensitivity.

"Against the backdrop of ongoing uncertainty from the epidemic, consumers are showing some new patterns of thinking and different consumer behavior." While the market is showing signs of recovery, consumers are also becoming more cautious and price-sensitive," said Bruno, senior global partner at Bain & Company. Brands must work harder to connect with consumers and highlight their value proposition."

In terms of future consumer trends, Bain & Company believes that the long-term fundamentals of the Chinese market remain solid and there is reason to be optimistic about the market's return to healthy growth. "Inflation in China is low compared to Western countries; meanwhile, the Chinese government is taking multiple steps to work on balancing dynamic clearing and economic development; and some of the first-mover FMCG companies are ready to do both." The report said.

Translated with www.DeepL.com/Translator (free version)