The fast-moving consumer goods (FMCG) industry boosted sales more than profits in China last year in a context of rapid expansion, sources with the China Chain Store and Franchise Association said on Thursday.
They added that Chinese enterprises still lag behind their foreign-funded peers in terms of management and profitability.
Statistics compiled by the association for 100 major FMCG enterprises which mainly run supermarkets, malls and convenience stores show that these firms garnered 530 billion yuan (US$69 billion) in sales income last year, up 20 percent on the previous year. This represents almost 7 percent of China's total annual retail sales, 1 percentage point higher than the year-earlier level.
The enterprises operated 54,575 stores, up a massive 81 percent, sources with the association added. Their profit ratio averaged 2.2 percent, up from 2 percent in 2005.
The 16 foreign-funded enterprises in the 100 examined, which run 3,005 malls and supermarkets, recorded 168.8 billion yuan (US$21.9 billion) in sales volume, or 32 percent of the total. Their sales volume increased by an average of 27 percent year-on-year, and the number of stores they operated was up 13 percent. Sales growth was based largely on improved efficiency, the sources said.
The 84 domestic FMCG enterprises realized 360.8 billion yuan (US$46.9 billion) in sales, up 17 percent. But their profits were hit by the costs of opening a huge number of new outlets, the sources added.
Fast-moving consumer goods (FMCG), also known as consumer packaged goods, are products that have a quick turnover and relatively low cost such as yogurt and toothpaste. Consumers generally put less thought into the purchase of FMCG than they do for other products. FMCG are sold mainly at grocery stores, convenience stores, supermarkets, hypermarkets and specialty stores. They may also include pharmaceuticals and consumer electronics.
(Xinhua News Agency March 30, 2007)