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AGENDA
How are shoppers changing their behviour as growth slows down?
What is the impact of these trends on modern trade retailers?
What can be done to maximize growth in this changing environment?
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HOW ARE SHOPPERS CHANGING
THEIR BEHVIOUR AS GROWTH
SLOWS DOWN?
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The last 12 months has seen slower growth due to lower inflation rate and
shoppers reducing their basket size.
Source: Kantar Worldpanel, National Urban China, Data to 14 thJune 2013
+ 15%Value growth
of total FMCG
market
+ 9%Value growth
of total FMCG
market
Jun 2011 vs Jun 2012
Jun 2012 vs Jun 2013
No. of Shoppers No. of Trips Items per Trip Price per Pack
+13%
-1% +3%-2%
MAT Jun 2012 vs 2013 - Shopper KPIsTotal FMCG
+9%
-5% +3% +4%2012
2013
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Shoppers are becoming smarter
Fewer items but more volume
Visiting Different Channels to
seek better value
and choice
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Most FMCG categories are seeing shoppers upsizing and this is delivering
volume growth for many categories.
Average Pack Size Change
+20%-10%
+20%
-15%
AverageVolumePe
rBuyerChange 13% of categories
18% of categories
44% of categories
Source: Kantar Worldpanel, National Urban China, Data to 14 thJune 2013
28% of categories
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Some categories are more expandable than others so this needs to be
considered before pushing larger packs.
Expandibility(%)
UK Example- but principle true in China
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Shoppers are changing the way they shop
especially in key cities
Fewer TripsHypermarkets
Supermarkets
Traditional Grocery
More TripseCommerce
Personal Care Stores
Department StoresTV Shopping
Overseas Purchase
Drugstores
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Shoppers in the higher tier cities shop across more channels so it is
important to ensure good availability of products outside of modern trade.
6.957.73
7.21 7.10 6.876.23
National Key Cities A Cities B Cities C Cities D Cities
Average Number of Channels ShoppedMAT June 2013
Source: Kantar Worldpanel, National Urban China, Data to 28thDec 2012
Channels Covered: Hypermarkets, Supermarkets/Mini/CVS, Grocery, Department Stores, Free Mart,
Whole Sales, Work Unit, Gift, Direct Sales, Specialist Stores, Shopping On-Line, TV Shopping, Overseas
Purchase, Drugstores, Beauty Salon and Milk Store.
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eCommerce growth shows no sign of slowing and will soon reach 50% in key
cities. Still very personal care focused in lower tier cities.
16
27
Rolling MAT National China Penetration of eCommerce (% HHs)
54 46 40 36 31
5
3 2 2 2
42 51 57 62 67
4 KEY
CITIES
A CITIES B CITIES C CITIES D CITIES
FOOD HOUSEHOLD PERSONAL CARE
eCommerce Share of FMCG Sector (% value)
42
29 27 2619
4 KEY
CITIES
A CITIES B CITIES C CITIES D CITIES
eCommerce Penetration by City Tier
UK22%
South Korea55%
Source: Kantar Worldpanel, National Urban China, Data to 14 thJune 2013
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Chinese shoppers like to visit different stores but why?
The average household in Shanghai buys Shampoo around 5 times a year and will visit more than
3 storesto buy shampoo in the year.
Lian Hua Carrefour Watsons YiHaoDian
Channel Type Small Supermarket Hypermarket Personal Care Store eCommerce
Number of
Shampoo SKUs81 387 200 1023
Prices
(High/Medium/Low)Medium Low High
Medium (but heavy
discounts on large
trips)
Benefits Close to homeLow Price & Good
range
Specialist products
including PL, Expert
Advice, Loyalty Card
Huge range,
convenience of
delivery, attractive
promotions
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WHAT IS THE IMPACT OF THESE
TRENDS ON MODERN TRADE
RETAILERS?
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Penetration is a key driver of value share for retailers but retailers are seeing
less and less penetration as shoppers visit other channels.
R = 0.9328
0
5
10
15
20
25
30
10 20 30 40 50 60 70 80 90
Share(%
value)
Penetration (% HHs)
Wu-Mart Group
Auchan
Carrefour
Wal-Mart Group
Yonghui
Lotus
Lotte Mart Jinkelong
ChaoshifaShuntianfu
82
66
46
23 34 24 25 25 21 25 21 1812
83
64
45
32 31 24 23 23 21 19 19 15 12
WU-MART
GROUP
CARREFOUR JINGKELONG YONGHUI WAL-MART
GROUP
LOTTE MART AUCHAN CHAOSHIFA SHUNTIANFU BEIJING HUA
LIAN
TIANKELONG JIAN MART LOTUS
52 w/e 2012/06/15
52 w/e 2013/06/14
Value Share (%) vs Penetration of Key Retailers in Beijing
Year on Year Penetration
Source: Kantar Worldpanel, Beijing, Data to 14 thJune 2013
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Loyalty also plays a key role in driving retailers share and similarly to
penetration is declining across key modern trade retailers in Beijing.
R = 0.8792
0
5
10
15
20
25
30
4 6 8 10 12 14 16 18
Share(%
value)
Loyalty (% Value)
Wu-Mart Group
Auchan
Carrefour
Wal-Mart GroupYonghui
LotusLotte Mart
Jinkelong
ChaoshifaShuntianfu
17
12
911
9
6
9
7
8
57 7 5
17
11 109 9 9 8 7 7
7 7 64
WU-MART
GROUP
JINGKELONG CARREFOUR AUCHAN CHAOSHIFA YONGHUI SHUNTIANFU WAL-MART
GROUP
LOTTE MART LOTUS JIAN MART TIANKELONG BEIJING HUA
LIAN
52 w/e 2012/06/15
52 w/e 2013/06/14
Value Share (%) vs Loyalty of Key Retailers in Beijing
Year on Year Loyalty within All Channels
Beijing
Hua Lian
Source: Kantar Worldpanel, Beijing, Data to 14 thJune 2013
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Retailers in China see very low levels of loyalty due to the fragmentation of
the retail market. Key challenge is how to grow shopper loyalty.
10
42
25
543
11 Others
Grocery
eCommerce
Work Unit
Gift
Other MT Retailers
Carrefour
Carrefour Shoppers Spend in Other Channels
52 w/e Jun 2013 - Beijing
Carrefour shoppers in Beijing will visit 5
other modern trade retailers and 6
other channelsfor FMCG productsover the year.
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WHAT CAN BE DONE TO
MAXIMIZE GROWTH IN THIS
CHANGING ENVIRONMENT?
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How can retailers drive
Penetration
Open new stores
Have the right store locations
Above the line communication
Becoming more difficult in
current environment
Improve category management
Improve shopping experience
Offer incentive for repeat visits
How can retailers drive
Loyalty
Requires deeper understanding
of shopper behaviour
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3.6millionCarrefour Shoppers
Kantar Worldpanel can identify missed opportunity shoppers who visit the
retailer but do not purchase certain categories in the retailer.
3.2millionCarrefour Shoppers who Buy
Liquid Anywhere
904kCarrefour Shoppers who
Buy Liquid in Carrefour
Only 29%of Carrefour
shoppers who purchase
laundry liquid make theirpurchase in Carrefour. The
remaining 71%purchase from
other modern trade retailers
and is lost spend for Carrefour.
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Compared to other retailers Carrefours closure rate is quite low so there is a
need to convert more of their shoppers to buy laundry liquid in store.
46
31 30 29
54 69 70 71
WU-MART GROUP JINGKELONG AUCHAN CARREFOUR
Missed Opportunity Shoppers
Closed Shoppers
% Retailer Closed vs Missed Opportunity Laundry Liquid Shoppers
Beijing52 w/e Jun 2013
+10%
7 millionRMB size ofprize
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Summary
Insight
Shoppers are becoming smarter visiting
a wide range of channels and retailers
Maximise your distribution in emerging
channels such as eCommerce in order
to grow your brand
Implication
Penetration is a key driver of retailers
value share but this measure is
becoming more challenging to grow
Retaining shoppers and growing their
trip spend will be key to share growth
for modern trade retailers
Shoppers will visit different stores for
the same category meaning there are
missed opportunities for retailers
Use real shopper behaviour insights to
target missed opportunity shoppers and
grow the retailers business
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8/13/2019 How to Ride the Wave in China-s Rapidly Changing Retail Market En
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CatMan On-Line can help you to identify and quantify
opportunities for your brands across different retailers in China.
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Justin Cook