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. Taiwan consumer confidence index was up 3 points to 79, compared to Q2, however, FMCG market growth rate was down 0.6%.
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).
Taiwan consumer confidence index increased 3 points to 79 in Q3 because of all factors, including job prospects, the state of personal finances, and good time to buy needed items all show an increase of 3 to 4 percentage points. However, 87% respondents considered Taiwan now in the economic recession, 5 percentage points up from Q2. As a result, the economy (39%) is still Taiwan consumers’ biggest/second biggest concern in the next 6 month, and FMCG sales slightly decreased 0.6% in Q3, showing the first drop in the past 8 quarters.
Though FCMG market growth momentum declined, there are still some growing possibilities. “Convenience remains a critical driver of category growth. Hypermarkets responded to customers seeking convenience with investment in private brand frozen food (+49%) in the household food category,” said Desmond Wang, Managing Director, Nielsen Taiwan. “E-commerce is enjoying double-digit growth in Taiwan and FMCG online retail represents even greater opportunity. E-tailers are working hard to drive traffic from offline to online with quality products and personalized offers. By combining quality products and supporting e-tailers to build engagement and loyalty, a healthy, sustainable e-commerce environment can be created.”
“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 Malaysia, inflation dropped to its lowest in the past 12 months (0.5% in Q3 2018) and consumer confidence rose to a record high of 127. The price compression from tax breaks in this period lead to decline in value growth rate at 3.4%, almost half that of the previous two quarters. Top five FMCG fastest growing categories in the quarter included vitamin C (+20.2%), bottled water (+19.4%), liquid milk (18.2%), energy drinks (+16.5%) and moisturisers (+15.9%). The convenience channel accounted for 21.8% of total FMCG sales, with growth in this channel driven by strong performance in the beverage category. Meanwhile drugstore/pharmacies, which account for 17.7% of FMCG sales, saw solid growth in the personal care and health care categories.
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 East and Europe. Insights and data presented in this report helps retailers and manufacturers to uncover areas of potential growth.