China's FMCG Market Shows Sustained Resilience

Core Insights - The fast-moving consumer goods (FMCG) market in urban China showed a 2% year-on-year sales growth in the first three quarters of 2025, with beverages leading the growth while dairy products faced challenges [1] - Final consumption expenditure contributed 53.5% to economic growth, driving GDP growth by 2.8 percentage points [2] - Online channels experienced a 7% year-on-year sales growth, with major e-commerce platforms like Douyin and JD.com showing positive performance [10][12] Group 1: FMCG Market Performance - Urban China's FMCG market achieved a 2% year-on-year sales growth in the first three quarters of 2025, with beverages leading the growth [1] - Dairy products faced significant challenges, with declines in both purchase frequency and spend per trip [1] - Lower-tier cities remained key growth engines, with sales in town and county markets growing by 4.1% and 3.6% respectively [1] Group 2: Retailer Performance - Walmart Group's market share increased by 1 percentage point, driven by Sam's Club and community store formats [6] - Hema's overall share increased by 0.4 percentage points, with its ChaoHesuan format driving growth through value-for-money offerings [6] - The SPAR Group achieved significant growth in the East region, with its discount store model becoming a key growth driver [6] Group 3: Discount Store Format - The penetration of discount snack stores exceeded 31% in the first three quarters of 2025, with a notable increase in the West region [7] - Comprehensive discount stores saw a 2.3 percentage points year-on-year increase in penetration, driven by major players expanding their offerings [8] - Wumart Group accelerated its transition to a hard discount format, leveraging its existing store network [9] Group 4: Online Channels - Online channels demonstrated steady performance with a 7% year-on-year sales growth [10] - Douyin's penetration increased by 5.1 percentage points, reaching close to 50%, with significant growth in town-level markets [12] - Xiaohongshu's penetration reached 1.7%, reflecting its unique content community platform's effectiveness [13] Group 5: Private Label Development - Over 48% of Chinese urban households purchased private label products, an increase of 10 percentage points year-on-year [17] - Retailers are enhancing control over product supply chains to optimize costs and improve price advantages for private labels [17] - Traditional supermarkets and online platforms are actively promoting private label development to strengthen consumer loyalty [18]