Bain Capital released a new report that says global Fast Moving Consumer Goods (FMCG) brands operating in China are losing ground to domestic brands who have expanded their reach and offerings. Sixty percent of global brands across all categories studied (food, beverages, personal care and home care) have lost share to domestic brands. Much of the decline is attributed to prices. In the Personal Care category, for example, sales volume maintained a consistent growth of 6% between 2012 and 2013. As the graph below shows, foreign brands still dominate in select categories such as hair conditioners and diapers.

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Earlier this year, L2 released the Digital IQ Index: Personal Care| China report with a similar thesis for the category; the proliferation of domestic brands has made competition intense, but digital is the moat that can help global brands conquer the market. Online sales account for 8% of personal care sales in China vs. to 2% in mature markets. The percentage is even higher in select sub-categories. For example, e-commerce accounts for 12.5% of men’s grooming sales.

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In addition to a positive correlation between brands’ Digital IQ and shareholder value, the L2 report finds most brands have work to do to increase their digital competency. Investment in BBS sites, maintaining a presence on Tmall, and appearance in top search results on Baidu and are a few things personal care brands can do to boost e-commerce and offline sales in China. For more, download an excerpt of the Digital IQ Index: Personal Care | China report.

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