Foreign brands face squeeze in China

Foreign brands are facing a sales squeeze in China as market growth slows and local companies grow and establish their presence.

Research by Bain & Company and Kantar Worldpanel found that Chinese consumer goods companies are building market share at the expense of international brands. In particular, China’s market for soft drinks, packaged foods, personal care and other consumer staples has slowed by two-thirds since 2011, according to the research.

Six in 10 foreign brands report losing market share in 2013.

Market growth for non-durable consumer goods slowed to 4.6% in the first quarter of this year, down from 10% growth in 2012 and 15% growth three years ago.

Growth in annual spending per household dropped from 9% in 2012 to 4.6% last year, while the number of urban household grew 2.6% per year.

The research showed that overall, foreign brands lost share across the 26 categories of consumer goods studied.