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Retail

Sun Art Retail Group Continues To Lose Market Penetration

Hypermarket operat0r Sun Art Retail Group is losing penetration in the Chinese market, the most recent figures from data firm Kantar Worldpanel suggest.

Owned by French retailer Auchan, Sun Art stayed on par with modern trade, growing by 1.1%. In comparison, of the five top Chinese retailers, Yonghui alone has expanded ahead of total modern trade by 32%.

Sun Art's penetration has continued to slide since September 2016. The company posted a revenue increase of 4.4% in the third quarter of this year.

Kantar reported that in the 12 weeks prior to 7 October, consumer spending on FMCG in China grew by 2.5% compared to the same period last year. E-commerce sales rose by a staggering 60.2%.

Retailers WSL and Bubugao's market share grew to 6.2% and 3.2% respectively in southern China, due to profitable multi-format strategies. Store visits have increased, and WSL has experienced an increase in penetration.

Bubugao's investment in online-to-offline conversion has created a stronger 'ecosystem' including e-commerce, online payment, logistics, and a membership prgoram. Regional retailers have also been upping their O2O game and vying with national companies, adopting multi-format strategies, and expanding through acquisitions.

Etailers have been attracting new customers by creating festivals and activities paired with promotions. Double 11, or 'Singles Day', is expected to continue to break records year on year.

Compared to 2013, when only 7.7% of Chinese households bought FMCG products online, 16% shopped online last year. If the uptrend continues, there should be 20% penetration this year, Kantar said.

E-commerce giant Alibaba made roughly $15 billion in sales on the day in 2016.

© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. To subscribe to ESM: The European Supermarket Magazine, click here.

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