China's FMCG Market Shows Sustained Resilience
China's FMCG Market Shows Sustained Resilience in First Three Quarters of 2025, as Private Label Penetration Accelerates(Click to view original)
The latest report released by Worldpanel（a CTR service in China）shows that urban China's fast-moving consumer goods (FMCG) market achieved a 2% year-on-year sales growth in the first three quarters of 2025, maintaining a stable trend.
Across the five major categories, beverages continued to lead sales growth, while dairy products still faced significant challenges due to declines in both purchase frequency and spend per trip. The North and East regions saw notable growth, with sales increasing by 3.1% and 2.5% year-on-year respectively in the first three quarters. At the city level, the lower-tier cities remained the key growth engines, with sales in town and county markets growing by 4.1% and 3.6% respectively in the first three quarters.
Consumer demand is the main driver of economic growth. According to the National Bureau of Statistics, in the first three quarters, final consumption expenditure contributed 53.5% to economic growth, driving GDP growth by 2.8 percentage points.
Driven by the summer holiday travel boom, the out-of-home consumption market demonstrated robust vitality. Worldpanel’s out-of- home consumption data shows a 6.9% year-on-year increase across tier 1-5 cities in the first three quarters of 2025.
Offline Channels
In the first three quarters of 2025, the overall sales of modern trade (defined as hypermarkets, supermarkets, convenience stores) remained largely unchanged compared to the same period last year. Convenience store sales decreased by 2.6% year-on-year, with penetration dropping by 1.6 percentage points, the rate of decline narrowing compared to the first half of the year. Small supermarkets maintained growth momentum, with sales up 6.0%, meanwhile, community grocery stores being closer to consumers, performed well, achieving growth in both purchase frequency and spend per trip, with sales in the West region achieving double-digit growth.
1. Performance of Major Retailers
Among the top ten retailers, Walmart Group's market share increased by 1 percentage point in the first three quarters, continuing to be driven by Sam's Club. Over the past nine months, Walmart actively piloted community store formats in Shenzhen, anchoring them within closer community living circles to meet consumers' high-frequency core shopping needs and penetrating different life scenarios. Hema's overall share increased by 0.4 percentage points, with its ChaoHesuan NB(超盒算NB) format significantly driving growth through extreme value-for-money and convenient services. Despite fierce market competition, the penetration of Freshippo formats also increased by 2.4 percentage points compared to the same period last year, further strengthening the synergy of Hema's dual-core strategy of 'large fresh produce stores+discount stores'. The latest data from Worldpanel also shows that the SPAR Group achieved significant growth in the East region in the first three quarters, with its discount store model becoming an important growth driver.
Although the convenience store sector overall faced growth pressure, leading Chinese convenience store brand Meiyijia surpassed 40,000 stores in July, marking another milestone in its national expansion. Through its accelerated store opening strategy, penetration increased notably in the East and West regions.
2. Continuous Advancement of the Discount Store Format
Worldpanel data shows that the penetration of discount snack stores exceeded 31% in the first three quarters of 2025. Regionally, as consumers in the West region are more price sensitive, the discount store format is more attractive, with its penetration increasing by 6.6 percentage points compared to the same period last year.
In the comprehensive discount stores format, which covers a wider range of categories, major players actively expanded, driving the format’s penetration up by 2.3 percentage points year on year. Metituan’s “Kuailehou(快乐猴)” attracted customers by leveraging its efficient instant delivery network and a relatively high proportion of fresh product categories. E-commerce giant JD Group advanced its large discount supermarket chain “JD discount supermarket”, utilizing its advantages in logistics, and sourcing from origins and private label development to deepen its presence in the North region. As a representative local retailer, Wumart Group accelerated its transition to hard discount format through its “Wumart Chaozhi(物美超值)” format, and saw rapid expansion based on its existing store network and local supply chain foundation.
Online Channels
In the first three quarters of 2025, online channels demonstrated steady overall performance, with sales value growing 7% year on year. Major e-commerce platforms, including Douyin, Pinduoduo and JD.com all achieved positive growth in both sales value and penetration.
Douyin maintained its strong growth momentum, with penetration increasing by 5.1 percentage points compared to the same period last year, continuing its outstanding performance. Notably, Douyin’s overall penetration is now close to 50%, with sales growth particularly significant in town-level markets. Douyin continued to optimize its ecommerce ecosystem and enhance consumer experience through both platform governance and merchant support policy. JD Group’s JingXi(京东京喜) continued to leverage its supply chain advantages, providing consumers with high cost-effective products. In the first three quarters, JingDongJingXi achieved a penetration of 4.9%.
Xiaohongshu differentiated itself from traditional e-commerce platforms with its unique content community platform and with interest as the anchor, it activated new consumption potential. The latest data from Worldpanel shows that Xiaohongshu’s penetration reached 1.7%, an increase of 0.8 percentage points from the same period last year. Earlier, Xiaohongshu signed a strategic cooperation with Taobao Tmall to create “HongmaoJiHua(红猫计划)”, facilitating a more efficient flow for brand merchants from front-link inspiration to back-link conversion.
O2O penetration exceeded 40% in the first three quarters. Different models showed different development trends. Among them, with the increase in penetration, the sales value of the warehouse model achieved steady growth. KA Self Run/ WeChat mini programs primarily relied on increase in spend per trip to drive growth. O2O is maturing, continuously enhancing consumer experience by relying on highly responsive logistics systems. For example, according to CTR Xinghan Mobile User Analysis System data, Taobao's monthly active users grew to 810 million by August, an increase of 6.4% since the launch of "Taobao Flashsale”. The development of JD Group’s delivery business further strengthened the synergy between e-commerce and O2O service.
Efficient fulfillment capability is key to supporting O2O service and even the consumer shopping experience across the entire online platform. E-commerce platforms are also continuously optimizing their logistics system to cope with diverse consumption demands. Worldpanel data shows that 38% of Douyin trips are concentrated between 9 PM to 1AM. This unique nighttime consumption habit places higher demands on building more timely fulfillment capabilities and has become an important issue for the sustained development of e-commerce platforms in the intensely competitive environment.
Private Label Penetration Accelerates
Worldpanel data shows that in the first three quarters of 2025, over 48% of Chinese urban households purchased private label products, an increase of 10 percentage points compared to the same period last year, reflecting the gradual increase in consumer acceptance of private labels. Regionally, leveraging mature supply chain systems and logistic networks, private label development was particularly strong in the East region and upper-tier cities. Meanwhile, penetration growth in prefecture-level cities exceeded 12 percentage points, indicating strong market potential in lower-tier markets as well.
Retailers enhancing control of the product supply chains, reducing consumption in intermediate links and optimizing structural costs, allows for the price advantage of private labels. In the first three quarters of 2025, private labels showed a vigorous development trend across membership stores, actively transforming traditional supermarkets and online platforms. Sam’s Club continued to strengthen the product strength of its “Member’s Mark” private brand through its product selection standards and membership mechanism. Hema created differentiated products across categories such as bakeries, snacks, and beverages through different product lines. Pangdonglai leveraged its strong local supply chain and a positive word-of-mouth effect. Furthermore, traditional supermarkets represented by CR Vanguard and Wumart Group also actively promoted private label development by optimizing their supply chains and category structures. Online platforms like Pupu and Xiaoxiangchaoshi(小象超市) formed distinctive private label ranges in high-frequency consumption categories, relying on their warehouse model and efficient O2O delivery networks to further strengthen consumer loyalty to their platforms.
Although private label has become a key focus for major retailers, long-term sustainable development still highly depends on continuous refinement of product strengths, including stable quality control, differentiated value distinct from the major national brands, and the challenge of channel coverage capability. How to strike a balance between 'low price and profitability', continuously occupy the consumer mind, and achieve synergistic symbiosis with manufacturers, supply chains, logistics systems, and other parts has become a key industry issue.
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