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Intelligence: Kantar Worldpanel study shows that Asian markets patronize home-grown brands for FMCG products

MANILA – Kantar Worldpanel revealed that despite the influx of popular foreign brands, local brands continue to thrive in the Philippine FMCG market, with approximately 60 percent of Filipinos patronizing homegrown products over imported goods. As the global expert in shopper’s behavior, Kantar Worldpanel’s recent Asian Brand Power study shows a similar pattern across most of the other Asian markets included in the study.

The study noted that local brands’ successes isn’t without challenges or setbacks. However, having a strong partnership with local retail power players has kept these homegrown players grounded and continue to advance and outperform multinational brands.

The Asian Brand Power is an annual study that zeroes in on the powerful partnerships between Asian retailers and brands in responding and tailoring to consumers’ changing needs while driving and reshaping the FMCG market in Asia. Through interviews with some of the leading local retailers in the region, the 2017 report provided intimate perspectives of local brands’ business strategies and the secret ingredients to their phenomenal growth.


Sachet All the Way

According to the study, one of the most important trends reshaping the retail landscape in Asia was the move towards buying and selling products in smaller, single-use packages. In the Philippines, sachet-sized options posted a growing share of display space in minimarts, neighborhood convenience stores, department stores, and in traditional sari-sari stores. Major multinational corporations in the country have been at the forefront of driving the trend towards smaller package sizes, especially within the hair care category.

Kantar Worldpanel also noted that this particular FMCG trend on single-use packages can be seen as a way of encouraging appetites for first-time trial to allow shoppers to try new products and brands.

Convenience and Community Combined

The Asian Brand Power research also showed that the penetration of modern retail trade in Asia was initially associated with larger-scaled formats. This meant longer trips over greater distances to supermarkets and hypermarkets that offer new levels of product choice and the promise of cheaper prices. However, recent data revealed that the main driver of growth in Asian FMCG markets has moved decisively. While FMCG spend at hypermarkets and supermarkets remains relatively stable, the most dramatic increase in FMCG sales is seen in convenience stores and minimarts chains growth numbers. Consumers are shown to prefer establishments within walking distance from their homes for smaller purchases.

In the Philippines, for example, a pharmacy has evolved as a significant FMCG player because it allows shoppers to make shorter, focused trips that meet their immediate needs.

Offline and Online Fusion

Additionally, data from Kantar Worldpanel revealed that the choice between visiting stores and buying through the internet is not a mutually exclusive one. Asian retailers are finding new ways to smoothen the shopper experience through technology – and this is one of the most exciting features of the FMCG market in the Asian region. Interestingly, however, while Filipinos are known to be heavy internet users, this has not reflected in their online FMCG product purchase behavior. E-commerce for FMCG products only registered a market share of less than one percent in the Philippines. 

“Asian households’ FMCG shopping choices are evolving, and our research shows that in order for brands and retailers to thrive in this landscape, they need to address consumers’ rapidly changing needs,” Lourdes Deocareza, New Business Development Director explained. “In a nutshell, local players’ key to success is to commit to re-engineering their business models, supply chains and customer experiences closer to consumer homes in order to meet the market’s demands.”

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