International brands in China are losing market share to domestic companies in everyday items ranging from fruit juice and make-up to toothbrushes, according to a large-scale survey released on Tuesday, as multinationals struggle to adapt to changing tastes in the world’s largest consumer market.
White-collar Chinese consumers with rising incomes are switching to pricier premium brands in categories of fast moving consumer goods from bottled water to shampoo. The trend has even reached toilet tissue, where there has been a switch from two- to three-ply.
But domestic companies have been quicker to capture the premium market, with brands owned by multinationals such as Nestlé, Procter & Gamble and Unileverlosing market share in 18 of 26 FMCG categories last year, and gaining in just four, according to a survey of 40,000 households by Bain and Kantar Worldpanel.
While China’s urban FMCG market grew 3 per cent in 2016 to about $190bn, Chinese companies expanded their sales more than 8 per cent while foreign brands grew just 1.5 per cent. “Multinational brands are moving backwards while local brands are jumping on the premiumisation wagon quite well,” said Jason Yu, general manager of Kantar Worldpanel China.