This is an excellent report from Bain and Kantar. Below is the verbatim summary of the report. Copyright belongs to Bain & Company and Kantar Worldpanel.

Chinese Shoppers: Evolving Behaviors in Challenging Environment
Bain & Company, Inc. | Kantar Worldpanel

Key points:

1.) Penetration continued to be the key indicator of market share, ahead of purchase frequency and repurchase rate.
– The leading brand’s penetration is two to 10 times higher than the penetration of the average 20 brands in their category.
– The winners successfully adapt to actual shopper behaviors, and focus on
driving penetration.

2.) The shopper base for all brands remains a “leaky bucket,” as we found that the majority of shoppers left the brands we studied after two years. The percentage of shoppers who leave is lower in loyalty categories, such as milk, but the leaky bucket pattern exists there as well. In order to compensate for losses, brands need to recruit shoppers continuously.
– Chinese shoppers demonstrate very low engagement with brands for most categories we studied
– low-frequency shoppers represent a substantial portion of the shopper base and
revenue share. Eg. 80% of Head & Shoulders shoppers purchase the shampoo no more than
twice a year, yet they represent 55% of the product’s total sales.
– 46% of shoppers who purchased Xufuji candies in 2011 left in 2012, while more than
one-third of its 2012 revenue came from newly recruited shoppers. This pattern continues every year: Almost 70% of Xufuji’s 2011 shoppers had left by 2013.

3.) Growth must come primarily from share gain. And penetration change is the most important way to achieve share change. In this section, we share more details about how marketers can accomplish this.

– competition extends far beyond their target segments.
– each brand was actually competing with a broader set of competitors, despite its functional focus. Although brands normally claim that they have clear target-shopper segmentations, in reality the segmentation is not clear cut.
– Each brand actually competes with every other brand
– Growth must come primarily from share gain. And penetration change is the most important way to achieve share change.

The steady path for brands to earn consideration and penetration requires investment in three key assets:
A.) Memory structure (marketers need to remind them about their brands when
they go shopping)
B.) Product portfolio (Simplify and rationalize your product portfolio)
C.) In-store assets (Brands must achieve perfect in-store activation at the point of sale)

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