China's fast moving consumer goods (FMCG) sector recorded a 7 per cent increase in sales value in 2004, with 20 out of 30 major categories recording growth and 10 of them experiencing double-digit growth, according to ACNielsen's 2005 China Market Information Digest.

ACNielsen's China Market Information Digest is an annual report on key statistics on the China retail market.

Integrating information from ACNielsen's retail market monitoring, retail audit studies and media measurement by Nielsen Media Research, the report is designed to help marketers identify key business opportunities by providing a comprehensive understanding about China's FMCG market.

"Consistent with strong economic performance and increased personal income - and fuelled by the growth of modern trade - China's FMCG sector has been on a fast track over the past several years," Glen Murphy, managing director of ACNielsen China, told China Daily yesterday.

However, marketers should not make decisions until they have fully understood the business environment and consumer demands in their own sector, Murphy suggested.

According to ACNielsen's China Market Information Digest, the 30 major categories tracked on a national base in China, recorded an average 7 per cent growth last year.

The report also reported that 20 out of the 30 major categories experienced growth, and 10 out of the 20 categories achieved a robust double-digit expansion.

Yoghurt and yoghurt drinks topped the fastest growing list with a 38 per cent value growth, followed by hair conditioners (33%) and infant milk formulae (23%).

"With consumers' increasing preoccupation with personal health, health products are stealing the limelight from other categories. This explains why yoghurt and yoghurt drinks became the fastest growing category last year," said Murphy.

Carbonated soft drink products continued to dominate the food and beverage category with a sales value of 14.5 billion yuan (US$1.79 billion), followed by instant noodles, yoghurt and yoghurt drinks and biscuits.

In non-food categories, shampoo, skin moisturizers, laundry detergents, toothpaste and sanitary protection products are the top five categories with the largest share of sales value.

The development of modern trade has been a strong growth driver for most FMCG categories, with a 30 per cent increase in modern trade outlets and 18 per cent growth in FMCG sales value recorded by ACNielsen last year.

The trade's importance is further highlighted in the Market Information Digest, which shows an increase in its contribution to most FMCG sectors.

Among the 30 categories identified by ACNielsen, the increasing importance of modern trade is best demonstrated by the heavy contribution of hyper/supermarkets - as 21 out of 30 the categories are sold mainly through these outlets.

This trend is especially apparent in categories like baby cereals, tonic drinks, and infant milk formulae, nappies and facial cleansers, where sales of hyper/supermarket contributed over 80 per cent of category turnover.

Source: China Daily