China’s FMCG sector sees ‘soft recovery’: report 

The sector saw a 1% growth in the first nine months of 2023.

The fast-moving consumer goods (FMCG) in China reported a “soft recovery” in the first nine months of 2023 as consumers are most likely spending more on other categories such as dining and travel following the pandemic.

In a report, Bain & Company said the sector saw a 1% growth during the period and a 1.2% increase in volume transacted.

In the third quarter, the FMCG industry saw a slight decrease of 0.9% year-on-year coming from a high 2022 baseline which posted a 6% growth following the easing of the pandemic lockdowns. 

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“There are signs of hope. In the first four weeks post Q3, we saw a noteworthy increase of 5% in value, aided by a resurgence in consumer demand due to heightened holiday spending,” said Bruno Lannes, a partner at Bain & Company based in Shanghai.

“Although the increased expenditure during this period was not counted in our data, it suggests an overall continuing expansion of the FMCG market,” he added.

In terms of consumption, meanwhile, Chinese consumers are prioritising products that are “healthy, value-for-money, and exclusive.”

Categories such as chocolate, facial tissue and hair conditioner saw a premiumisation in average selling price, showing that consumers are prioritising better quality and experiences.

Organic, natural and functional foods are purchased more as they are healthier options. Bain & Company added that private-label brands and price promotions are gaining traction due to a preference for value-for-money options.