Consumer preferences have been evolving amid the pandemic, and it is expected that certain trends will continue even after the difficult times pass. Recently, NielsenIQ has unveiled which of these will grow in 2021 across Asia’s FMCG industry.
The first trend is convenience, followed by homebound. 62% of Asian respondents said the convenience of a location was the top reason for them to choose where to shop during the lockdown and restricted movement, while 76% of them claimed that services should offer more flexible options for their lifestyles at home.
Asian consumers were looking for alternatives, too. With the rising concern for health and the environment, 69% of Asian consumers said they would switch to an eco-friendly brand with the same price and quality, while 72% said naturally produced products were more important to them than three years ago.
Lastly, as more and more consumers were looking for new experiences, 73% claimed that they wanted to buy new products from brands that they are familiar with.
“There is plenty of room for opportunities and growth. We have witnessed remarkable winning stories from some brands, who have paired innovative ideas with the right in-market activation. Growth can be found in the right stores, right categories, right segments, right occasions and right price tiers. Dynamics are still uncertain but those who are more agile will be the big winners in 2021,” said Justin Sargent, president of retail intelligence at NielsenIQ Asia.
NielsenIQ has also unveiled figures about FMCG growth in Asian markets. Overall, FMCG growth was flat (-0.1%) in 2020, while there was an 8% growth in 2019. Most Southeast Asian markets experienced a significant decline with Singapore being an exception, recording the highest growth of 15.5%. Northeast Asian markets saw a lower but reasonable growth with China recording 3.1%.
As for consumers' preferred brands, 62% of FMCG sales in Asia were local. According to its recent survey, Asians preferred buying local brands to support their country’s companies (49%), and because local brands were better priced (49%), more fresh (44%) and more trustworthy (41%). In recent years, local brands have been growing as they accounted for 60.1% in 2018, 61% in 2019 and 61.7% in 2020 in Asia FMCG sales.
The mainstream price tier dominated in Asia. It accounted for 55.7% of the total FMCG sales in 2020, growing from 54.5% in 2018 and 55% in 2019. On the other hand, 28% of FMCG sales came from premium price tiers. Premiumisation is now a key focus area considering Asia’s fast growing middle class and 71% of Asian consumers were willing to pay more for a new product and 53% opted for multinational brands for better quality.
Additionally, NielsenIQ's study has highlighted that 80% of FMCG sales were from small players. With about 300,000 brands operating across Asia, 80% of the total sales came from brands ranked outside the top 20 in their categories.
As for where to shop, Asian consumers considered a number of factors, including value for money (95%), low prices (75%), safety and hygiene (67%), wide product selection (67%), fresh products (63%) and convenience in location (62%). Online hypermarkets or supermarkets were Asian consumers' top priority when they planned to shop more. 31% stated that they wanted to buy new products only online.
“2020 was a challenging year with most Asian markets experiencing a decline or lower growth in FMCG. We believe the pace will pick up and normalize this year though as consumer and business confidence rebounds,” Sargent added.