Import fever on the rise in China's FMCG market: report

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Spending on China's fast-moving consumer goods (FMCG) consumption grew steadily against downward economic pressure in the first three quarters of this year, with imports accounting for 18 percent of all FMCG sales, said a report released Thursday.

Total FMCG sales increased by 2.7 percent, 6.9 percent and 5.7 percent, respectively, in the first three quarters, maintaining the same pace as 2018, according to the China Shopper Report from global management consulting firm Bain & Company and shopper behavior observer Kantar Worldpanel.

In the first six months of 2019, imports rose by 10 percent, close to twice the rate of overall FMCG growth. In many categories, imports remarkably outpaced category growth, with imported carbonated soft drinks growing nearly four times faster than the category average and imported toothpaste three times the category average.

"Even as homegrown products dominate most of their categories in China, consumers have an enduring desire for imports," said Bruno Lannes, a Bain & Company partner in Shanghai and co-author of the report.

"This is especially true for product categories where consumers perceive foreign goods as higher quality than those produced domestically, such as fragrance, wine and milk powder," he said.

The sales of American makeup in the 12 months ending in the second quarter of 2019 rose 54 percent from the same period in 2018, and toothpaste sales from the Netherlands doubled in that time frame.

The import growth was driven mostly by online sales, which jumped by 30 percent in the first half of 2019 and accounted for 35 percent of all online sales in China during this time.

"By concentrating on selling online, foreign FMCG companies gain traction in China without the need to build a complex physical route to market model," said Jason Yu, general manager of Kantar Worldpanel Greater China and co-author of the report.

The report also said as urban consumers' incomes rise, so does their pursuit of better health and a better quality of life. 

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