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These sectors continue to see consumption upgrading
2023-12-13

Since the full resumption of economic and social operations at the end of last year and the beginning of this year, the market has been closely monitoring consumption trends in the post-pandemic phase and voting for companies with "real money" - Pinduoduo and Miniso benefited from the "consumption downgrading" trend, showing impressive performance and enjoying glory in the capital market. However, can "downgrading" simply and crudely apply to all consumer sectors and groups? Based on China Supermarket data, Sandalwood provides insights from a different angle.


Sandalwood China Supermarket data shows that the ASP of popular consumer goods such as soy sauce, sanitary napkin, beer, yoghurt, and instant noodles in supermarket channels has maintained positive growth in the past two years, indicating a clear trend of consumption upgrading. After in-depth analysis, we find that although the actual situations of these sectors vary, they all ultimately point to product optimization and iteration, thereby driving industry consumption upgrades.


Soy Sauce: As one of the most frequently used condiments in daily life, its quality and nutritional value have received widespread attention. In October 2022, due to Haitian's double-standard scandal, the sales of zero-additive soy sauce rapidly increased, driving the sector's ASP growth hit a new high.


Sanitary Napkin: For such high-frequency personal care products, comfort is a key factor influencing women's choices. Baiya's Freemore brand has launched products suitable for sensitive skin, products containing probiotics, etc., in response to consumers' specific needs. Product upgrades have driven both volume and price increases and increased Baiya's market share from around 2% in 2020 to over 4% in 2023 YTD, along with channel expansion and brand marketing.

Beer: The beer sector has entered an era of stock competition since 2013 and has recently stepped into the phase of structural upgrading. Top companies are focusing on mid-to-high-end beers to meet consumers' pursuit of taste and quality. Sandalwood China Supermarket data shows that in the past three years, the ASP of the beer industry has continued to grow positively, and the sales volume share has shifted from economic brands to mid-priced brands in the 2H22, and then from mid-priced brands to high-end brands in 2H23 HTD.

*Top 6 players include China Resource Beer, Tsingtao Brew, Anheuser-Busch, Carlsberg (Chongqing Brewery), Yanjing Beer and Zhujiang Brewery.


Yoghurt: More and more people realize that consuming sugary yoghurts is not conducive to health, leading to a surge in sucrose/sugar-free yoghurts. According to Sandalwood China Supermarket data, the sales value share of sucrose/sugar-free yoghurts with higher prices in the yoghurt market has increased from 3% at the beginning of 2018 to 17% in the third quarter of this year, driving the overall ASP of the yoghurt sector to maintain robust growth.

*Here includes brands which feature sucrose/sugar-free yoghurt, such as Classy Kiss, Simple Love, Rushi, Meiji Bulgaria, AMX Sucrose-Free yoghurt.


Instant Noodles: Due to the rise in health consciousness, and the emergence of take-out and convenience store, instant noodle sales fell into a slump. The consumer side forced the industry side to innovate and upgrade. In recent years, instant noodle companies have actively catered to market demands, continuously launching mid-to-high-end products that are both nutritious and delicious, successfully driving consumer return and industry recovery.


Sandalwood China Supermarket data closely tracks offline supermarket sales, with granularity down to the sector, category, company, brand, and sub-brand/series. If you are interested, please contact service@sandalwoodadvisors.com.
Disclaimer: The content and viewpoints expressed in this article are for reference purposes only and should not be construed as investment advice or recommendations. very investor should conduct thorough independent research and consult with professional investment advisors before making any investment decisions.
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