As reported in ASIA Pulse 2021 #1, FMCG value sales grew strongly in most Asian markets during 2020, but shopping dynamics differed from one market to another. In this section we provide a snapshot of how consumers’ lifestyles, priorities, needs and purchasing habits have evolved across the eight markets we research for the Brand Footprint study, not including Japan, India, Bangladesh and Sri Lanka.
Nelson Woo, Senior Director, Commercial, Asia, Worldpanel Division, Kantar
As our Managing Director Marcy Kou explained in her introduction, COVID-19 has accelerated some key behaviour changes that we were already witnessing among Asian consumers. The impact of the pandemic will continue to reshape how they shop in the near future – setting the context for brands, and directing how they grow their footprint in the region.
Lower frequency shops and bigger baskets Global consumers made 1.6 billion fewer grocery trips in 2020, as they limited the number of times they left their homes to reduce the risk of catching the virus. While purchase frequency reduced by -2%, spend per trip rose +11%. In Asia, FMCG purchase frequency also reduced by -2%; however spend per trip (+1%) didn’t increase as much as the global average. This is because basket sizes in Chinese Mainland remained stable in 2020, due to COVID-19 having a limited impact on behaviour, together with the rapid development of ecommerce to ensure accessibility to products. Outside of Chinese Mainland, where we observed more stocking up of products, spend per trip rose +6%.
The quest for all-round health Prioritising health was a key trend in Asia even before the pandemic. COVID-19 reinforced its importance, and drove it to further evolve into a desire for holistic overall wellness for individuals and their families. Unsurprisingly, brands which launched innovations that tapped into consumers’ need for everyday safety and protection thrived.
Rationalised budgets The economic downturn and concerns around income led consumers to prioritise essentials and trade down to mainstream brands. They also opted for larger pack sizes, which helped them to save money while stocking up to fulfil the family’s needs while they spent more time at home.
In Indonesia, this resulted in a +10% growth in volume per shopping trip. Big packs gained new buyers: for example, large packs of liquid bodywash were bought by 3.8 million more households in 2020, while drinking water sold by the gallon was bought by 4.5 million additional households.
Cautious spending had an impact on total FMCG value sales in some markets, including Chinese Mainland, where consumers shifted more towards mainstream products after years of premiumisation. This led to an average price drop of -2.1%, which in turn drove value down -0.1% between 2019 and 2020 compared with a +5.5% rise the previous year.
A surge in in-home occasions Lockdowns and restrictions on movement led to a big change in consumers’ lifestyles and how they spent their time. Categories such as cooking ingredients benefited hugely.
In Indonesia, the leading seasoning brands achieved penetration gains of up to +2%, while sales of kitchen staples were up +15% and snacks +8% in sales value. Growth was even higher in Malaysia, with sales of kitchen staples rising +20% and snacks +17%. Convenience in meal preparation was king in Chinese Mainland, and frozen food, quick soups and instant noodles were all among the categories that enjoyed double-digit growth.
Safety and availability shaped the channel landscape. The need to stay safe while still being able to access FMCG products drove an exponential growth in ecommerce across Asia. It also led to increased purchasing from local stores as people shopped close to home.
Ecommerce is growing at different rates across the region. In north Asia Chinese Mainland and South Korea have the highest penetration, while Malaysia and Vietnam are outpacing other markets in south-east Asia, and closing in on Taiwan. O2O continues to expand in Chinese Mainland, with a reach that now extends to almost two-thirds of China’s population. The channel’s share of total FMCG value has risen from 4.6% in 2019 to 7.1% in 2020, with greater opportunities in food than non-food.
