The latest Asia Pacific FMCG growth figures released today by Nielsen indicate consumer spending is increasing across the region, with total FMCG value growth up 6.5% year-on-year in the third quarter, compared to 4.9% in the previous quarter. Average FMCG prices increased by 2.1% in the same period, compared to 2% in the previous quarter, and volume growth in the region reached 4.4% compared to 2.9% in the previous quarter.
The Q3 2018 Nielsen Quarter by Numbers report, which looks at the overall FMCG landscape across 65 markets globally along with changing economic trends and consumer sentiments, reported India, Philippines and China posted the region’s highest year-on-year value growth in the third quarter (16.5%, 8.4% and 7.3% respectively).
Asia Pacific consumer confidence was marginally up in the third quarter (up 2 pts to 114), buoyed by increasing optimism about local job prospects, personal finances and spending intentions. Malaysia posted the region’s strongest uplift in consumer confidence (up 10 pts to 127), followed by Thailand (up 10 pts to 112) and Vietnam (up 9 pts to 129).
“Domestic consumption continues to hold enormous potential in Asia Pacific, along with export opportunities,” observes Laura McCullough, Marketing and Sales Effectiveness, Nielsen. “Overall strong GDP growth, double digit average wage growth and an expanding consumer class that is looking to improve their quality of life will push consumption into new product categories in FMCG, and help to drive growth for the industry overall.”
In Hong Kong, the local Consumer Confidence index remains steady with a marginal 1-point increment to 106 in the third quarter this year, compared to the previous quarter. However, differed from the positive momentum of job prospect observed across the Asia Pacific region, Hong Kong experienced a noticeable drop to 51 points from 59 points reported in the last quarter. The drop indicates that Hong Kong residents currently have less confidence towards in the local job market, and it might have been caused by the economic uncertainties like the China-US trade war. For the time being, it has not affected the sentiments of personal finance (61) and immediate spending intentions (53), where both figures remained steady compared the previous quarter (they were 61 and 54 respectively).
The Hong Kong economy continued to grow steadily at a slower pace, as the GDP grew by 2.9% in Q3 whilst the inflation rate is 2.7%. The GDP growth in Q3 has been driven by a strong local economy as private consumption expenditure was resilient at 5.2% growth versus year ago. Total retail sales increased by more than 12% in Q3 compared to last year as day-trip visitors to Hong Kong rose by 22%. “For FMCG, the overall market continued to grow at a slower pace, with an increment of 2.9% in Q3, compared to 5.8% in Q2 2018, thanks to the sustained tourist inflow. Small to mid-sized players experienced strong growth owing to tourist shopping as well, and it had especially boosted the sales of skin care and beauty products,” said Michael Lee, Managing Director, Nielsen Hong Kong and Macau.
In terms of channel performance, although 74% of Hong Kong consumers have shopped online in 2018, the absolute volume of sales from e-commerce only occupied a small portion. Clothing and Travel have been the top categories purchased online while consumption of goods from grocery related categories like Food are also on the rise, of which the penetration is currently at 29%. “While offline sales continued to be the dominant channel in town, we expect continual growth from the eCommerce sector. The adaptation to omni-channel consumer behavior and the implementation of precise targeting strategies would be crucial for marketers to remain competitive,” Lee suggested.
Nominal growth, volume growth and unit value growth figures in this release are based on offline FMCG sales.
FMCG value growth figures for China are calculated based on data collected in offline sales channels.
About Quarter by Numbers
The Nielsen Quarter by Numbers report presents changing economic trends (including key performance indicators such as GDP and inflation), consumer optimism and spending intentions, and a snapshot of the fast-moving consumer goods (FMCG) industry that includes overall FMCG trends, as well as specifics by retail channel, super category and manufacturer tier performances. This report is available across five regions covering 65 markets around the world: Asia Pacific, North America, Latin America, Africa & Middle Eastand Europe. Insights and data presented in this report helps retailers and manufacturers to uncover areas of potential growth.
Nielsen Holdings plc (NYSE: NLSN) is a global measurement and data analytics company that provides the most complete and trusted view available of consumers and markets worldwide. Our approach marries proprietary Nielsen data with other data sources to help clients around the world understand what’s happening now, what’s happening next, and how to best act on this knowledge. For more than 90 years Nielsen has provided data and analytics based on scientific rigor and innovation, continually developing new ways to answer the most important questions facing the media, advertising, retail and fast-moving consumer goods industries. An S&P 500 company, Nielsen has operations in over 100 countries, covering more than 90% of the world’s population. For more information, visit www.nielsen.com.