Foreign brands losing ground to domestic firms in China

BEIJING - Amid a sluggish consumer goods market in China, foreign brands are facing pressure, with six out of 10 losing market share to their domestic rivals last year, an industry survey has found. Market growth for non-durable consumer goods slowed to 4.6% in the first quarter of 2014, down from 10% growth in 2012 and 15% three years ago.

The rate of decline was consistent across all cities regardless of size. Growth in annual spending per household dropped from 9% in 2012 to 4.6% last year, while the number of urban households grew by 2.6% per year, contributing to volume growth that was mostly stable as price increases declined.

Foreign brands overall lost share across 26 categories. Some saw marginal share gain, but the overall score card was negative, with 60% of foreign brands losing share. Some local Chinese brands saw increases where foreign brands saw losses, most likely due to the increase of marketing on the local side.  www.webershandwick.cn (ATI).