For 12 weeks ending May 18, 2018, consumer spending on FMCG in China grow by 10.0% compared to the same period last year. Hypermarkets, supermarkets, and convenience stores are showing strong signs of recovery. Consumer spending grew by 10% YoY.

For 12 weeks ending May 18, 2018, consumer spending on FMCG in China grew by 10.0% compared to the same period last year, latest Kantar Worldpanel data showed. Modern trade (including hypermarkets, supermarkets, and convenience stores) is showing strong signs of recovery, with a growth of 4.1%, 1.2 points up compared to last year. In terms of regions, the East and West regions enjoyed a healthy growth at 11.0% and 11.3% respectively, whilst growth in the North remaining sluggish.

Kantar Worldpanel China continuously measures household purchases over 100 product categories including cosmetics, food and beverages, and the toiletry/household sector through its 40,000 sample families. Its national urban panel covers 20 provinces and four municipality cities (Beijing, Tianjin, Shanghai, and Chongqing).

The channels within its monitoring scope modern trade (supermarket, hypermarket, convenient stores), traditional trade (grocery, free market, wholesale), e-commerce, overseas shopping, direct sale, work unit/gifting etc. The goods under monitoring are those obtained for in-home consumptions.

Among the top retailers in modern trade, Walmart and Yonghui enjoyed the fastest growth on market share, up by 0.8 and 0.4 points respectively in the 12-week period compared to the same period last year. Both Walmart and Yonghui accelerated their progress on new retail format trial. Walmart deepened its cooperation with Tencent to optimize payment processes while Yonghui Super Species tested a drone delivery service in Guangzhou City, Guangdong Province.

The e-commerce channel grew by 32.0%, with 37.2% of households in urban China purchased FMCG online over the 12-week circle. Recently, RT-Mart together with Hema opened their first middle sized new retail store “HeXiaoMa” (盒小马) in Suzhou City, Jiangsu Province. The simplified Hema format has removed in-shop dining services.

Kantar Worldpanel’s data shows that there is a big potential to develop e-commerce business in lower-tier cities: 35.0% of households in county-level cities and 27.8% of households in counties purchased FMCG online in the latest 12 weeks, which is much lower than the 46.3% online penetration in key cities.

JD.com continued to narrow its gap with Tmall in penetration, with 6.3% of households shopping on JD in the 12 weeks. As e-commerce retailers have developed over the past few years, it’s become harder to gain a massive sales growth through purely price discounts.

Kantar Worldpanel has observed more campaigns to emphasize premiumization and joint online/offline activation during the recent mid-year “618 (June 18) Online Shopping Festival”. This will create new themes to engage consumers and stimulate consumer demands. Please watch this place for future FMCG data and reports.

This post was originally published on Kantar.com.

Net revenues of JD.com for Q4 2017 were RMB110.2 billion (US$216.9 billion), an increase of 38.7% from Q4 2016. Revenues from services and others for Q4 2017 were RMB10.0 billion (US$1.5 billion), an increase of 54.7% from Q4 2016. Net revenues for the full year of 2017 were RMB362.3 billion (US$55.7 billion), an increase of 40.3% from the full year of 2016. Revenues from services and others increased by 49.9% in 2017.

Gross profit for the fourth quarter of 2017 was RMB14.4 billion (US$2.2 billion), compared to RMB10.8 billion in Q4 2016. Gross profit for the full year of 2017 was RMB50.8 billion (US$7.8 billion), an increase of 43.7% from the full year of 2016. Non-GAAP gross profit4 for the full year of 2017 was RMB50.0 billion (US$7.7 billion), an increase of 44.7% from the full year of 2016.

Net loss from continuing operations attributable to ordinary shareholders for the fourth quarter of 2017 was RMB909.2 million (US$139.7 million), a decrease of 27.9% from RMB1,261.4 million net loss for the same period last year. Non-GAAP net income from continuing operations attributable to ordinary shareholders5 for the fourth quarter of 2017 was RMB449.3 million (US$69.1 million), compared to RMB779.7 million for the same period last year.

Net income from continuing operations attributable to ordinary shareholders for the full year of 2017 was RMB116.8 million (US$18.0 million), compared to a net loss from continuing operations attributable to ordinary shareholders of RMB2.0 billion for the full year of 2016. Non-GAAP net income from continuing operations attributable to ordinary shareholders for the full year of 2017 was RMB5.0 billion (US$0.8 billion), an increase of 140% from the full year of 2016.

Diluted EPS and Non-GAAP Diluted EPS. Diluted net loss per ADS from continuing operations for the fourth quarter of 2017 was RMB0.64 (US$0.10), compared to RMB0.89 for the fourth quarter of 2016. Non-GAAP diluted net income per ADS from continuing operations for the fourth quarter was RMB0.31 (US$0.05), compared to RMB0.54 for the same quarter last year.

Diluted net income per ADS from continuing operations for the full year of 2017 was RMB0.08 (US$0.01), compared to diluted net loss per ADS from continuing operations of RMB1.43 for the full year of 2016. Non-GAAP diluted net income per ADS from continuing operations for the full year of 2017 was RMB3.41 (US$0.52), as compared to RMB1.45 in the full year of 2016.

Operating cash flow from continuing operations for the twelve months ended December 31, 2017 increased to RMB27.3 billion (US$4.2 billion) from RMB10.0 billion for the twelve months ended December 31, 2016. Free cash flow from continuing operations, which excludes the impact from JD Finance related credit products included in the operating cash flow, for the twelve months ended December 31, 2017 increased to RMB15.7 billion (US$2.4 billion) from RMB13.5 billion for the twelve months ended December 31, 2016.

Annual active customer accounts increased by 29.1% to 292.5 million in the twelve months ended December 31, 2017 from 226.6 million in the twelve months ended December 31, 2016.

In the fourth quarter of 2017, JD.com continued to expand its fashion offering on the JD platform with Bebe, an American contemporary fashion brand, and Cambridge Satchel, an iconic British handbag brand. TOPLIFE, JD.com’s independent online luxury platform which was launched during the quarter, also expanded its range of high-end brand partnerships through agreements with several well-known international luxury brands, including Yves Saint Laurent, Alexander McQueen and Derek Lam. TOPLIFE’s customized inventory facilities, premium delivery service and abundant product selections combine the best of offline luxury shopping with the convenience and precision of online shopping.

JD.com had over 170,000 merchants on its online marketplace, and a total of 157,831 full-time employees as of December 31, 2017.

In December 2017, JD.com launched its second-hand goods business, Paipai, expanding JD.com’s ecosystem into China’s second-hand goods market. Combining advanced technologies such as blockchain-based traceability, AI-enabled automated online product verification and valuation, identity verification and credit rankings alongside JD’s anti-counterfeit controls, JD is well positioned to solve key “pain points” in the second-hand goods market, namely, quality, authenticity and security, providing a trustworthy second-hand goods platform for Chinese consumers.

As of January 31, 2018, JD.com’s joint venture, New Dada, had partnered with 163 Walmart stores and 388 Yonghui stores, among numerous other supermarkets and grocery stores, to provide a premium online fresh grocery shopping experience with one-hour home delivery service. New Dada is the largest crowdsourcing logistics provider and O2O grocery platform in China.

In January 2018, JD.com and Meili Inc. agreed to form a joint venture to explore social-commerce opportunities. The new venture will build and operate a social e-commerce platform leveraging resources on JD’s level-1 Weixin entry point, bringing innovative and interactive social-commerce features to shoppers, and helping small businesses reach a broader consumer base at lower cost.

In February 2018, JD.com and Tencent announced a joint minority investment in Better Life, a leading multi-format regional retailer in southwest China. Combining Tencent’s massive social media traffic, JD’s e-commerce know-how and logistics capabilities, and Better Life’s offline retail chain, the three parties have established a strategic partnership to pursue “Boundaryless Retail Solutions” and to provide customers with integrated online and offline shopping experiences.

Cross-border online shopping trends in China 2018

Chinese urban consumers’ spending in fast moving consumer goods (FMCG) in the third quarter of 2017 grew by 3.6% from a year ago, indicating a clear recovery.

Kantar Worldpanel reports the Chinese urban consumers’ spending in fast moving consumer goods (FMCG) in Q3 2017 grew by 3.6% on 12-month basis, indicating a clear recovery for the industry.

Offline channel grew by 2.2%, which is slower than the total trade. However, modern trade (including hypermarkets, supermarkets, and convenience stores) did report higher growth at 2.9%, suggesting consumers are returning to brick and mortar stores as they create better shopping experiences through technology innovation.

Four key cities (Beijing, Shanghai, Guangzhou, and Chengdu) and provincial capitals grew slightly faster, up 3.7%. Across all regions, the West and South markets reported a more upbeat trend, up by 6.0% and 4.2% respectively.

Sales rebound in offline

Leading Grocery Share of Modern Trade – National Urban China (%)

Local retailers continued to outgrow their global counterparts during Q3. The Sun Art group lifted its share by 0.4 percentage point over the same period last year, driven by successfully growing the size of shopper’s baskets. Yonghui and BuBuGao kept growing by opening more new stores. Within the first half of 2017, Yonghui opened 64 stores and BuBuGao opened 22 stores. It largely helps to strengthen their position, and both of them gained 0.2 percentage point share during this quarter.

Amongst international retailers, Walmart and Carrefour started to see meaningful share recovery. Although they are still closing non-performing stores, they are proactively reformatting their existing stores to be more competitive and appealing to shoppers.

They are introducing new stores which are 30% to 50% smaller than the old ones to make their merchandises more accessible while reducing the sales area for durable goods. In June, Carrefour opened its first Easy Carrefour store in Wuxi and this is the first time the retailer introduced the smaller format store outside its home base in Shanghai. More recently it launched its own digital wallet “Carrefour Pay” together with Union Pay to facilitate more mobile payments in store.

Apart from that, in order to seek growth in the new retail era, most of the top 10 retailers adopted a more aggressive O2O (Offline and Online) strategy, by providing an integrated shopping experience with multi-channel offers.

For example, Yonghui works with JD.com’s platform to deliver its fresh produce and essential grocery items to consumers within one hour. They also introduced their own APP Yonghui Life in selected cities to expose to consumers directly.

More Chinese E-commerce players moving offline

Kantar Worldpanel reported a robust 24.3% growth in FMCG spend through E-commerce channel in this quarter. Now e-commerce accounts for 7.4% of FMCG spend in the latest 52 weeks ending September 8, which is 1.7 points higher than the same period last year.

China’s Online Retail Trends of Devices Sales in Q3 2017

This article was originally published on Kantar.com.

Alibaba is ranked the world’s second most valuable retail brand with a brand value of US$49.30 billion, according to WPP’s new 2016/2017 BrandZ Top 25 Most Valuable global Retail Brands ranking.

Amazon is ranked the most valuable global retail brand with a brand value of US$99 billion in 2016; its brand value has increased by 59% in 2016 compared to a year ago.

Alibaba’s main competitor in online retail JD.com brand value grew by 37% in 2016 and made it the 11th most valuable retail brand in the world.

Top 25 Most Valuable global Retail Brands 2016/2017 (USD; millions)

The top e-commerce platforms in China are JD, Tmall, and YHD in 2016. Find out the top 10  here.

According to a Chinese retailer power ranking report released by Kantar Retail, a global retail insight and consulting business, China retail market has been growing rapidly attributes to the booming economy and the increasing demand for consumption goods.

Based on the power ranking of retailer in 2013, Wal-Mart was still the leader, followed by growing RT-Mart. They were both regarded to have clear strategy and deep understanding of consumers. Domestic retailers had a solid performance in 2013, CRE ranked the 3rd, representing manufacturers’ approval of its consumer-centered business method and willingness of mutual growth. Yonghui’s main advantage is a good understanding of local markets, which made it the top 7 this year. At the same time, 7-Eleven dropped out of top 10.

The power of RT-Mart was increasing day by day, coming up with Wal-Mart. Among these retailers with considerable profit, RT-Mart’s performance was excellent. RT-Mart was highly praised for its branding and clear strategy, but Wal-Mart stayed ahead with its rank of business fundamentals rising.

Chinese retailers, CRE and Yonghui were doing fine in 2013. CRE was busy opening new stores, doing acquisition and expanding last year (2012), and kept going this year (2013). Yonghui became one of the top 10 retailers from a regional star.

Moreover, following retailers were on the list for their excellence in innovation, professional team and offering shopping experience that improved consumer loyalty.

According to report, some manufacturers commented that JD.com (Jingdong) was the most creative e-commerce platform with professional team and management. Zhongbai Group owned high loyalty of consumers, and Zhongbai was always ready to cooperate with manufacturers.