Gabey Goh
Oct 16, 2015

Growth slows but Asian FMCG brands gain on home ground

SHANGHAI - The rise in FMCG consumption across Asian markets is slowing, halving from 10 per cent in 2012/13 to 4.6 per cent in 2014/15, but local brands have gained more consumers on their home turf.

Growth slows but Asian FMCG brands gain on home ground

According to Kantar Worldpanel's Asia Brand Power 2015 report, local brands now attract 74 per cent of total FMCG spend, and grew their sales 8 per cent in the last year, compared with 4 per cent for global brands.

The brands that grew gained on average 685,000 new shoppers over the year, while the brands with declining sales lost 628,000 shoppers, indicating that increasing reach and penetration has a direct impact on sales growth.

Marcy Kou, Kantar Worldpanel’s chief executive for Asia, said the report showcases the Asian players that every ambitious brand should be aware of and inspired by.

“Local players are currently winning the game, and we’ve examined the journeys of those that have achieved the most significant sales growth and household penetration in their respective markets,” she said.

“Many have already expanded internationally. These brands come from a variety of sectors, but all are exceptional and should be proud of what they’ve achieved,” she added.

Kou pointed out that there are 4.4 billion consumers in Asia and the more of them brands can win as customers, the closer they’ll get to winning the battle for dominance in the FMCG market. 

Kantar Worldpanel has also identified the 10 Asian brands that grew their penetration the most within their home market in the last year, gaining an average of 5.4 million new shoppers*:

  Brand name Country of origin Owned by Category New shoppers
gained in 2014
1 Bluemoon China Blue Moon Fabric detergent 10.2m
2 Garuda Indonesia Garuda Food Snacks, biscuits 8.9m
3 Teh Pucuk Harum Indonesia Pt. Mayora Indah Tbk Ready-to-drink tea 7.6m
4 Teh Gelas Indonesia Orang Tua Ready-to-drink tea 6.6m
5 Nihar India Marico Hair care 5.5m
6 Sun Kara Indonesia Sambu Group Coconut cream 5.5m
7 Bright China Bright Group Dairy products 5.4m
8 Space 7 China Heng An Group Sanitary protection 4.9m
9 Tata India Tata Salt, tea, spices 4.7m
10 Vinda China Vinda Paper products 4.6m

*Analysis of the top 50 most-chosen brands in each of the nine Asian countries covered in the report

Other highlights of Kantar Worldpanel’s analysis include:

  • The power of local brands is strongest in food and beverages categories, where they have claimed 85 per cent of the Asian market through their ability to cater to the local palate.
  • In Korea, local brands claim 92 per cent of the FMCG market—the highest in all of Asia.
  • Asia’s FMCG slowdown has been felt most acutely in China, where growth declined by a third from 15.8 per cent in 2011/12 to 5.4 per cent today. China is still responsible for 75 per cent of total FMCG growth in Asia, however.
  • In China, consumers’ spending on local brands increased 7 per cent in the last year, compared with 3 per cent for global brands. 70 per cent of local FMCG players are growing their sales, compared with 50 per cent of the global brands operating in China. In terms of penetration, 44 per cent of Chinese brands increased their shopper base in the last year, compared to 33 per cent of global brands operating in the market.

Kantar Worldpanel has also identified the Top 10 Chinese brands that have grown their shopper base within China the most within the last year:*

*Panel covers households in national urban China

In addition, the research firm found that the all dominant Asian players featured in the report have five ‘power levers’ of growth in common:

  • They are masters of metamorphosis: Shifting from manufacturing-led to brand-led, evolving along with consumers and expanding beyond their country of origin.
  • They have a purpose, and play an active role in society: Respecting and caring for consumers, helping to improve lives and democratising categories.
  • World-class innovation with a local twist: Recognising that consumers want to move with the times, but without sacrificing traditions.
  • They digitise and humanise: Applying digital technologies both to create and sell products and to connect with consumers on an emotional level.
  • Data-led intuition: An instinctive understanding of what will work combined with ongoing market research that provides unbiased, actionable consumer insights.

The Asian Brand Power report is a joint initiative between Kantar Worldpanel and Kantar in Asia. It combines insight from a number of sources, including purchase behaviour data from Kantar Worldpanel’s permanent panel, data on 5,200 Asian brands from the Brand Footprint 2015 database, interviews with the CEOs of 11 leading Asian brands and white papers from Kantar companies in Asia.

 

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