NIQ Retail Spend Barometer
China

• FMCG and Tech & Durables (T&D) saw a slight increase in China consumption in Q2 2024 compared to the same period last year, with FMCG growing by 0.6% and T&D by 1.13%. 
• The growth of China’s FMCG industry has slowed, with beverages increasing by 6.7%, household care by 5.8%, and health concept products gaining consumer favor. 
• The smartphone market is growing rapidly, with sales exceeding 510 billion yuan in the first half of 2024, a year-on-year increase of over 14%, while the home appliance market underwhelms, with a year-on-year decrease of 8.14%.  

In Q2 2024, China shoppers’ spending on fast-moving consumer goods (FMCG) and tech and durable (T&D) goods increased by 0.9% compared to the same period last year, with FMCG growing by 0.6% and T&D growing by 1.13% year-on-year. This is according to new insight from the NIQ Retail Spend Barometer, which has been powered by GfK intelligence, and is released in China for the first time. The tool measures the turnover in sales of FMCG and non-food consumer products sold in retail stores across China. 

The NIQ Retail Spend Barometer provides a complete overview of China spend for the FMCG sector (ambient and frozen food, beverage, snacking, dairy, pet care, homecare, personal care, baby care and paper products) and for the T&D sector (technical consumer goods, home appliances, DIY and home improvement). This cross-category and cross-channel overview is based on real sales data and is published on a quarterly basis to illustrate household spending priorities. 

NIQ data shows that FMCG growth has slowed down. The omnichannel sales of FMCG in China, including content e-commerce, increased by 0.6% year-on-year in Q2 2024, lower than the 3.1% growth in the first quarter. Among them, the comprehensive e-commerce channel decreased by 0.7%, and the content e-commerce channel increased by 14.3%. Shopping festivals are becoming increasingly integrated into consumer behavior, and online purchases are serving a wider range of needs. Content e-commerce has a stronger ability to convert from recommending to purchasing. The offline channel decreased by 1.1%, and the decline has been reduced due to the growth of near-field retail. At the same time, the offline channel landscape is evolving, emerging retail models like snack stores, membership stores, and discount stores are playing a crucial role in driving growth through their unique product offerings and competitive pricing. 

From the category perspective, beverages remain a driving force in the FMCG industry, growing by 6.7% in Q2. Sugar-free tea, coconut water, and Chinese health drinks emerged as standout categories. Homecare products also saw a surge, particularly insect repellents, contributing to a 5.8% growth in the second quarter. Overall, health-focused products continue to resonate strongly with consumers across food and non-food categories. 

 The convenience of online-to-offline (O2O) shopping has fuelled a significant increase in consumer adoption, with purchase categories expanding beyond fresh produce to include a wide range of products. O2O now accounts for nearly 8% of sales in modern trade channels, with some categories like beverages and personal care exceeding 15%. Moreover, with the empowerment of technology, O2O has expanded to independent stores, accounting for nearly 20% of the total O2O channel.  

“Brands and retailers operating in today’s dynamic retail landscape face the challenge of optimizing their pricing strategies while ensuring seamless experience for consumers and long-term growth through an omni-channel strategy. As consumer shopping habits continue to evolve, market participants must innovate to stay ahead of the curve and capitalize on emerging opportunities.”

Lynn Wang, Retail Customer Success Lead, NielsenIQ China

GfK data shows that the sales of T&D consumer goods in China increased slightly by 1.13% year-on-year in Q2 of 2024, which has slowed down compared to the growth of 5.66% in Q1. 

The growth of technical consumer goods is stable. After a growth of 8.32% in Q1, it increased by 4.93% year-on-year in Q2. Among them, smartphones occupy a pivotal position in the market with the highest sales amount. With the steady growth and continuous progress of the national economy, coupled with the continuous introduction of new products and new technologies in the market, the smartphone market is gradually leading and stimulating the overall consumer demand from the high-end products. In the first half of 2024, the total sales of the smartphone market broke through 510 billion yuan, achieving a growth of more than 14% compared to the same period last year. 

At the same time, the decline in sales of DIY and home improvement-related products is obvious, with a year-on-year drop of 15.97%, and home appliances fell by 8.14% year-on-year. The home improvement and DIY sectors experienced a significant decline, with sales dropping by 15.97% and 8.14% year-over-year, respectively. 

The white goods industry encountered some challenges during this year’s 618 promotion period. The total retail volume of refrigeration, washing, and drying in May and June fell by 4%, and the retail sales fell by more than 13%. As the most important promotion for white goods in the first half of the year, the weakness of the mid-year promotion led to a nearly 3% year-on-year decline in retail sales of refrigerator, washing machine, dryer in the first half of the year, with a decline in the average price of each category. However, with the introduction of the national replacement policy in August, it is expected that energy-efficient home appliances will benefit in the second half of the year, driving a slow recovery of the home appliance industry. 

At the consumer level, although the current consumer confidence has not been fully restored, and the enthusiasm for consumption is somewhat conservative, the high-end home appliance market has shown a positive growth trend. This is mainly due to the attractiveness of “quality-price ratio” products in the market. According to GfK’s POS data, the retail sales of the refrigerator, washing machine, dryer markets above 10,000 yuan in the first half of the year increased by 1.6% year-on-year, showing a steady growth in the entry-level high-end market. In addition, high-end home appliance products such as built-in refrigerators, large-capacity drum washing machines, and washing and drying machines are driving the positive expansion of the market, indicating that consumer demand for high-quality home appliances is gradually increasing. 

“The recovery of the smartphone market is due to the joint action of multiple factors. First, the performance of entry-level mobile phones has been significantly improved, and the improvement of the user experience has made consumers more inclined to extend the usage cycle of existing devices. Second, the supply chain and manufacturers have shifted their focus to mid-to-high-end products in the past two years, continuously launching technological innovations and iterations, thus promoting the high-end trend of the market. In addition, the rise in the cost of upstream components since the second half of 2023 has also led to an overall increase in the selling price of smartphones. Together, the three major factors drive the continuous upgrade of the unit price of the smartphone market, driving the industry into a positive cycle.” 

Benedict Hong, Customer Success Lead of GfK China