China’s FMCG Market Sees Modest Improvement in 2026

On Nov. 3, Worldpanel by Numerator reported a modest improvement in China’s urban fast-moving consumer goods market in the first three quarters of 2026, with sales increasing by 0.1% year on year. Growth gained momentum in the third quarter, when sales rose by 1.3%. Consumers continued to favor more frequent, smaller purchases, with the purchase frequency up by 4% year on year, while average spending per transaction fell by 3.7%. Overall growth was driven by consumers reallocating their spending across different channels and retail formats, reflecting the market’s ongoing structural transformation.

Structural divergence among offline retail channels became increasingly pronounced. Sales through modern trade channels, including hypermarkets, supermarkets and convenience stores, declined by 2.3% year on year, reflecting continued pressure across the sector. Sales at hypermarkets and large supermarkets continued to contract, while convenience stores recorded the steepest decline, with penetration falling by 2 percentage points year on year. Purchase frequency and average spending per transaction also weakened.

Small supermarkets, which cater to neighborhood shoppers’ everyday needs, registered the most resilient performance, with sales rising by 3.3% compared with the same period of last year and penetration increasing by 1.8 percentage points. They were among the few modern retail formats to maintain growth.

The top 10 retailers increased their combined share of the modern trade market by 0.5 percentage points, reflecting a slight rise in market concentration. Growth was driven primarily by Walmart Group and Freshippo.

Walmart Group maintained its leading position, with its market share increasing by 1.2 percentage points year on year. The continued introduction of new private-label products, coupled with the accelerated expansion of its neighborhood store formats, helped boost the group’s overall consumer penetration by 4.2 percentage points.

Freshippo also continued to gain market share, with a year-on-year increase of 0.9 percentage points. Driven by the accelerated expansion of its two store formats, its overall consumer penetration reached 15.9%. This follows a period of rapid expansion in 2025, when its store count increased by 86.5%, according to the China Chain Store & Franchise Association’s 2025 ranking of China’s top 100 supermarket chains.

Meanwhile, Yonghui Superstores’ market share declined by 0.8 percentage points in the first three quarters of 2026. However, following store renovations and operational improvements, consumer penetration of its supermarket format rebounded significantly. In 2025, Yonghui recorded a 20.7% year-on-year decline in sales, while its store count fell by 48.0% to 403.

According to Worldpanel, online sales grew by 8.9% year on year in the first nine months of 2026, with growth driven primarily by increases in consumer penetration and purchase frequency. Lower-tier cities, particularly county-level markets, recorded significantly faster growth than the online market overall.

Instant retail, encompassing front-warehouse delivery models, comprehensive e-commerce platforms and retailer-operated services, continued to gain traction. Its penetration rate reached nearly 30% in the first three quarters of 2026, up by 2.4 percentage points year on year. Supported by ongoing improvements to fulfillment networks, the channel recorded growth across all city tiers.

Image: Freshippo

This article was based on a Chinese article. Read the original article.