NielsenIQ: Consumers in Hong Kong prefer health and wellness products amid pressure on wallet spends
- Written by Daily Sun
According to NielsenIQ, consumers are spending on categories like over-the-counter and health supplements that are recording growing contribution in sales of over 12% in 2022 versus 2021, followed by Pet Care and Tobacco (11%, 9% in 2022 vs 2021 respectively).[1]
Other categories that are displaying rebounding momentum in the last two years include packaged food (+4.0% in 2022 vs 2021), snacks and confectionary (+6.2% in 2022 vs 2021), beverages (+3.0% in 2022 vs 2021) and alcohol (+3.2% in 2022 vs 2021), and laundry products (+3.6% in 2022 vs 2021).
Consumers are concerned about health, both physical and mental, and are looking for convenience
In a survey[2] conducted across multiple Asian markets by NIQ BASES, the top concern for consumers in Hong Kong remains their physical health despite the economic stress. Further, consumers shared that some of the factors they consider when FMCG products are wide product range (one in four consumers), convenient location and convenient store layout (over 10%). Physical (nearly one in three) and Mental Health (over 15%) are the biggest concerns voiced by consumers.
"While APAC has been resilient to inflationary pressures relatively, compared to rest of the world, the compounding impact has not gone away. We are in an era where customers are re-directing spending away from big-ticket, out-of-home discretionary spending, with a priority on utilities and groceries. Any splurging is being handled in calculated ways using multiple strategies for saving. This is a great opportunity for manufacturers to innovate new products keeping in mind possibilities to converge the growing consumer preferences for convenience, health, and well-being," said Spencer Hung, Managing Director, NIQ Hong Kong, and Taiwan.
"Innovating in terms of convenience could be in the form of the type of products rather than just the location or layout. Whereas in health, it can go beyond just physical health, especially as our younger generations have quite an attention towards mental health. FMCG brands could take a cue from consumers preferences for premium purchasing for healthier attributes in food and beverages like preferences for low sugar, no sugar, and low salt. Similarly, efficacy in household care and functional attributes in oral and personal care will command more premium from consumer wallets," explains Hung.
Recent survey from NielsenIQ identified preferences from tourists coming to Hong Kong from various Asian markets. A burgeoning share of tourists from China (44%) claim premium and better quality as top reason to purchase products overseas as compared to one in four consumers (26%) from the Philippines. Top categories that tourists from China intend to buy in Hong Kong include beauty & cosmetics (57% of consumers), electronics (34%), snacks & confectionery (27%); similar trend for tourists from the Philippines. There is a marked shift in the sales contribution of categories preferred by tourists, for example, the contribution of skin moisturizers sales to total FMCG have increased to 19.4% in Q1 2023 vs 13.2% Q1 2018[3], whereas that of infant milk formula has relatively dropped from 36.4% in Q1 2018 to 14% in Q1 2023.
"There is a shift in mindset towards the pandemic and with borders opening, travel & tourism GDP in APAC expected to grow at 8.5% annually over the next ten years. Given the recent trend of Hong Kong people travelling to Mainland China for leisure and consumption, it's getting even more important for FMCG players to understand the concerns and preference of local shoppers and mainland tourists in Hong Kong. Capturing the health and wellness trend, understanding what and where tourists buy, and adjusting the assortment mix across stores can turn out to be very profitable for FMCG players in Hong Kong," adds Hung.
https://www.linkedin.com/company/nielseniq/
The issuer is solely responsible for the content of this announcement.
About NIQ
NIQ is the world's leading consumer intelligence company, delivering the most complete understanding of consumer buying behaviour and revealing new pathways to growth. In 2023, NIQ combined with GfK, bringing together the two industry leaders with unparalleled global reach. With a holistic retail read and the most comprehensive consumer insights—delivered with advanced analytics through state-of-the-art platforms—NIQ delivers the Full View™.
NIQ, is an Advent International portfolio company with operations in 100+ markets, covering more than 90% of the world's population. For more information, visit NIQ.com.