China consumer

By Bruno Lannes, Wei Yu and Jason Ding, Bain

Yoghurt is flying off the shelves in China. The value of yoghurt sold in 2015 grew by more than 20 per cent. Meanwhile, instant noodles are suffering a slump. Consumers in China bought 12.5 per cent fewer containers of instant noodles in 2015 than they did a year earlier.

It seems that China’s market for fast-moving consumer goods (FMCG) now operates at two distinct speeds: slow and fast.

The engine behind two-speed China is the government’s official “new normal” policy, which is managing GDP growth at 6.5 per cent to 7 per cent, shifting focus from manufacturing to services and consumption, and pushing for innovation-led growth over investment-led growth. Read more

News that Ikea is rolling out an online shopping platform in China – its first in the Asia-Pacific region – could be a sign that Western retailers are at last reacting to rising costs and shifts in consumer shopping behaviour. But what has taken them so long?

Despite operating online models successfully in the UK and other parts of Northern Europe, it has taken Ikea seven years to get to a similar point in China. With stores in major cities including Shanghai and Beijing, Ikea has followed a similar strategy to many other Western retailers; investing in bricks and mortar outlets in China’s thriving tier 1 and 2 cities.

However, consumer demand has been growing right across China and while rising costs remain an issue, Western retailers urgently need a strategy to develop this market potential. Read more