China’s consumer packaged goods (CPG) market is quickly shifting to e-commerce: spending decreased by 2% in brick-and-mortar hypermarkets and supermarkets last year, but rose by 54% online. As brands rush to take advantage of this massive growth opportunity, competition to gain visibility on China’s top e-tailers is fierce.
According to L2’s new CPG China: E-Commerce Insight Report, brands are struggling to carve out a share of the digital shelf on China’s largest B2C e-tailer Tmall as users face a vast selection of names when they search for items across categories. Hair care is especially competitive: Schwarzkopf has the category’s highest average share of shelf space on the Alibaba-owned site, showing up in an average of 7% of mobile first-page listings per search term with an average first-page results rank of only 23. Meanwhile, smaller local brands such as Boqian and Vestes are rivaling top multinational players for both share of shelf and page rank.
Using data from the report, L2’s new Tmall Share of Shelf visualization tool provides a detailed picture of how each CPG brand is faring on Tmall first-page search results, showing that even major brands are becoming lost in the crowd. Unilever’s Dove only appears in an average of 2% of bath and shower first-page results, which makes it the fifth most visible brand in the category. It doesn’t fare much worse than first-place Lux, which appears in an average of 4% of listings.
The visualization also shows that a handful of categories have clear winners that are leaving a long tail of competitors far behind. For example, Finish appears in an average of 44% of first-page listings for dishwashing-related terms, while no other competitor has more than an average of 5%.
As e-commerce only accounts for 7% of all FMCG sales so far in China, significant room for growth remains. In the battle between local names and international giants, brands that find success through the online channel now can set themselves up for future strength in the entire China market.