Thailand FMCG sales grew 8% in second quarter 2010 – outperforming the growth rate of 2009

Stocks and Financial Services Press Releases Wednesday October 13, 2010 11:15
Bangkok--13 Oct--Nielsen
Thai male shoppers more visible at the grocery aisles compared to Asia Pacific counterpartsLarger format stores such as Hypermarkets remained the key shopping channel

FMCG sales grew 8% in Thailand in the second quarter of 2010 which represents improved performance vs growth rates in 2009, according to Nielsen’s latest Retail and Shopper Trends report. This growth rate is the 6th highest amongst 13 markets studied in the Asia Pacific.

Within overall Asia Pacific, FMCG sales grew 12% in the second quarter of 2010 compared to the same period last year. This growth was largely driven by six developing markets. Vietnam led the way with a sizzling 16% growth, followed by India (+14.4%), the Philippines (+14.2%), China (+11.9%), Indonesia (+9.9%) and Thailand (+7.8%).

Hypermarkets remain Thai shoppers’ primary shopping channel

Hypermarkets lost up to 1% share in 2009 in a number of countries such as Korea and Taiwan as a result of the economic downturn. Shoppers used them slightly less frequently, possibly to try to save money by avoiding these stores where they would be faced with more non-discretionary spending temptations.

In Thailand, consumers continue to favor hypermarkets as their primary shopping channel. Even though the usage level for hypermarkets dropped slightly, consumers still spend the most at hypermarkets.

Nielsen’s latest report also revealed growth in the usage of smaller supermarkets or mini-markets, stores that offer shoppers more convenient local grocery shopping options and lower travelling costs. The number of shoppers who used supermarkets in Thailand, Taiwan, and Indonesia (markets that have had strong development of Hypermarkets), increased for the first time in many years.

In Thailand, the number of shoppers who used supermarkets as their main channel increased from 10 percent in 2008 to 22 percent in 2009.

Despite their smaller basket sizes, convenience stores associated with gas stations managed to generate an increase in the frequency of shoppers' visits (from a monthly average of 3 in 2008 to 4 in 2009). However, traditional grocery, wet markets and convenience stores outside gas stations, with registered average monthly visits of 18, 14 and 13 respectively, remained as the top three channels most frequented by Thai consumers.

Peter Gale, Nielsen’s Managing Director - Retailer Services in Asia Pacific, Middle East & Africa said, “Convenience stores typified by 7-Eleven will continue to grow strongly in all countries including Thailand, with a big driver of this likely to include an ever-expanding offer in food service as well as many other services aimed at making everyday life even more convenient.”

As retailers continue to invest in smaller formats to offer shoppers more convenient “top-up” shopping, leading Hypermarket chains are also jumping on the bandwagon to expand their footprint to smaller catchment areas and capture spending from different shopping trips.

The emergence of the male shopper: 26% of Thai males shop for their families

Slowly, males across the Asia Pacific region are emerging as an important shopper group when buying groceries. Over the past 10 years the proportion of males who are main grocery shoppers across the region increased from 14% to 22% on average. In Thailand, 26% of men claim to be the main shopper for their families, up from 15 percent in 2002, and higher than the regional average.

% of male shoppers (2009 vs. 2002)
Almost 7 in 10 shoppers in Thailand are focused on promotions
Shoppers across the region responded to the economic downturn in 2009 by becoming more value-conscious, a behavior also driven in part by retailers increasing promotional activity.
% of shoppers focused on promotions

Across the region, Vietnam, Malaysia, China and India had the highest percentage of promotion seekers, with Thailand in 6th place. The proportion of promotion seekers increased noticeably in 2009, particularly in developing markets such as Vietnam (+13%) and India (+10%). In Thailand, where consumers are habitually promotion seekers, 66 percent of Thai shoppers said they were influenced by promotional offers.

Tapping the potential from Private Labels

While the private label concept is still undeveloped in all Asian markets, with only Hong Kong having a share above 5%, its share of sales increased in most markets in 2009 during the economic downturn. In Thailand, Private Label grew by 33 percent in 2008 and 18 percent in 2009, as shoppers increasingly looked for value when buying grocery products. As the effects of the downturn started to subside in 2010, Private Label sales growth actually dipped to –1.3%.

Private label share of total market

“There is a significant long-term opportunity for retailers to cater to more value-conscious consumers and to differentiate themselves by investing in private label product development. Ensuring consistent product quality and actively marketing the concept to shoppers is critical, as Asian consumers are largely brand-loyal,” added Gale.

About The Nielsen Company

The Nielsen Company is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related assets. The privately held company is active in approximately 100 countries, with headquarters in New York, USA. For more information, please visit http://www.nielsen.com.


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