P&G, Unilever, Wal-Mart & RT-Mart top China’s retail & manufacturing industry
12 January, 2012
2011 PoweRanking® Survey
Local and Asian-based retailers feature favourably in survey
Kantar Retail’s inaugural China 2011 PoweRanking® Survey has revealed the top players of the manufacturing and retail industries in China, as ranked by their industry. Manufacturers, P&G and Unilever, and retailers, Wal-Mart and RT-Mart have all performed well in key indicators such as business strategies, growth and potential, marketing and branding approaches and supply chain capabilities.
In addition, the survey also reported that Chinese and Asian-based retailers accounted for 5 of the top 10 ranked retailers, demonstrating the progress that Asian companies are making in the manufacturing and retail industries. Companies like Master Kong Holding Company was recognised as a manufacturer that excels in providing consumer insights and category leadership, while Bubugao, a local retailer based in Hunan Province, was ranked as one of the top ten companies operating in China with a clear business strategy.
The China 2011 PoweRanking® Survey rated the key industry players across the Consumer Goods and Retail industry and benchmarks how manufacturers and retailers view each other; identifies the operational strengths and weaknesses of manufacturers and retailers in China, as they are ranked by their partners; and highlights areas to focus on for the strategic planning and future development of these companies.
“China, which has been registering consistent growth rates of around 10% over the past 20 years, is the world's fastest-growing major economy and is forecast to surpass the United States as the world’s largest consumer goods market in coming years,” said Phil Smiley, CEO, Asia Pacific, Kantar Retail.
“We are seeing one of the world’s most competitive consumer goods markets here in China, with leading global retailers and manufacturers vying with strong local players for a share of this highly attractive market. The survey results will help these players understand their operational strengths and weaknesses as they are ranked by their partners, and underline the areas they need to focus on for growing their businesses in China.” China’s Retail Market: Concentration Phase
Findings from the China 2011 PoweRanking® Survey suggest that the Chinese retail market is in a stage that Kantar Retail calls the Concentration Phase , which sees retailers improving their operating models, increasing its market penetration levels with new store openings, buying out weaker competitors, and concentrating on increasing shopper loyalty and sales per store. At the national level, the mainland China market is in the Concentration phase. In some of the major cities, the market has already reached the Penetration phase. Below are key findings from the Kantar Retail China 2011 PoweRanking® Survey:
• When asked to rate the most important factors when working with trading partners, 61.5% of retailers placed highest importance on manufacturers that produce the best combination of growth and profitability. Other factors that were key to retailers include in-store support (54.8%), capable sales force and customer teams (41.7%), an efficient supply chain (41.2%) and brands that are able to drive category growth amongst shoppers (38.2%).
This reflects the state of evolution in the market and the fact that retailers place a premium on excellence in the fundamentals of doing business and working with the manufacturers that can generate and fulfill profitable growth.
• On the other hand, manufacturers placed highest importance on retailers that have clear company strategies (57.0%), are best to do business with (55.0%), and have good category management and buying teams (48.8%), reflecting a fast growing and developing manufacturing market in China. Interestingly, store branding and digital marketing efforts by retailers ranked on the low end at 34.9% and 30.1% respectively, and these are likely to become key differentiators for retailers in China as the market evolves through the Concentration phase.
The Kantar Retail China 2011 PoweRanking® Survey was conducted in June 2011 and involved over 150 manufacturer and retailer respondents in the hyper, super, convenience, and personal care channels and manufacturers in grocery (food), grocery (non-food), health & beauty care, and general merchandise categories. Additionally, follow-up qualitative interviews were conducted among a diverse group of manufacturers and retailers to provide further insight into the data. Further findings from the Kantar Retail China 2011 PoweRanking® Survey may be found in the accompanying factsheet.
About the Kantar Retail China 2011 PoweRanking® Survey
Kantar Retail sponsored the first PoweRanking® survey in the United States in 1997. The survey originated from its industry benchmarking studies on category management and trade promotion management which, for the past 17 years, have provided insight into industry best practices in these areas. The objective of the PoweRanking study is to research and benchmark how retailers and manufacturers evaluate each other in the most important areas of the manufacturer/retailer relationship.
This is the first year that the PoweRanking study has been conducted in China. Given the dramatic levels of growth that the Chinese economy has experienced over the past few years, the increasing demand for consumer goods and the rapid evolution of the retail market, the landscape for CPG (consumer packaged goods) manufacturers and retailers has changed significantly. About Kantar Retail
Kantar Retail is WPP’s retail insights and consulting business and provides consulting and insight solutions to our 400 Clients globally from its 20 offices. Kantar Retail has been present in China since 2004 and offers retail insights, consulting, retail analytics and capabilities development services to clients. Besides the Kantar Retail China 2011 PoweRanking®, the company also conducts the following benchmarking studies: PoweRanking® of Manufacturers and Retailers (USA and China), Category Leadership (currently only available in the USA), Trade Promotion Spending and Merchandising (currently only available in the USA), FoodservicElite® Ranking of Manufacturers and Operators (currently only available in the USA), Industry Shopper Study Across Retailers. Learn more about Kantar Retail at www.kantarretail.com
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