China’s fast-moving consumer goods (FMCG) sector is seeing some signs of a tentative recovery in spending, tempering declines in selling prices in an economy under years of deflation, according to a report by Bain & Company.
Value grew 2.7 per cent in the first quarter from a year earlier, as festive spending helped fuel a 5.3 per cent gain in volume, the firm said in a market research report published last week. The average selling price fell 2.5 per cent, following a 3.4 per cent slide in 2024 that was the worst in four years, it added.
Bain tracks and analyses FMCG goods deemed to be daily necessities that households buy on a daily or weekly basis across four sectors: packaged food, beverage, personal care, and home care products. It does not cover categories like apparel, appliances, travel and restaurant spending.
“The overall market trend for 2025 is unclear” because of persistent deflation, according to the report co-authored by Bain’s senior partners Derek Deng and Bruno Lannes and Rachel Lee, general manager of Worldpanel China. “A downtrading trend was consistent across all four major categories.”
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What does it mean for the world when Chinese consumers tighten their belts?
What does it mean for the world when Chinese consumers tighten their belts?
China’s macroeconomic conditions improved while consumer confidence stabilised and Beijing announced more policies to support domestic consumption and crank up growth as exports struggled amid tariff and trade barriers. The government in March unveiled a strategy to raise wages and reduce households’ financial burdens.
