Foreign consumer brands have outgrown their Chinese counterparts for the first time in four years in China because of deepened localization and prompt actions taken to cater to fast-changing consumer needs, according to a joint study by consultancies Kantar Worldpanel and Bain & Co. The growth of international fast-moving consumer goods brands surged by 9.5% year-on-year in 2019, compared with the rate of 7% of local peers. The ninth edition of the survey tracked shopping behavior of Chinese consumers across 106 FMCG categories, ranging from packaged food and beverage to personal care. Domestic companies posted a robust 11.1% compound annual growth rate between 2015 and 2016, compared to the rate for foreign firms of 6.4%.

“For multinational corporations, more decentralized decision-making at the country level, faster rollout of products, and more localized endeavors to stay tuned to customers’ needs are some of the decisive factors for their outperformance,” Jason Yu, Managing Director of Kantar Worldpanel and one of the authors of the report, said. For instance, the role of e-commerce has moved from the periphery to the forefront in many businesses of multinational brands in China. Yu said some senior company executives even appeared on live-streaming sessions, a popular way in China to market products online and something that was unimaginable five years ago.

MNCs are empowering their local teams to make local decisions so that they can deliver services at China speed, said Bruno Lannes, Bain Partner and a co-author of the report. “The results show that building trust and local relevance through ‘design, decide, deliver and digitalize’ for the Chinese market are paying off,” he said. This momentum is likely to give foreign consumer brands a continued edge, especially in light of the Covid-19 pandemic. “Consumers are going back to trust bigger brands amid the uncertainties so that in many ways the growth of emerging brands has slowed down,” Lannes said. The report said China’s FMCG growth reached 5.5% year-on-year in 2019, while the pandemic has dragged the rate to a negative 6.7% for the first quarter of this year, the China Daily reports.

Seventeen Chinese brands ranked in the top 100 in a global survey, with digital companies and retailers the biggest winners, compared to 15 Chinese brands on the list last year. Internet giants Alibaba and Tencent ranked sixth and seventh, respectively, in the BrandZ Global top 100 list of WPP and Kantar. The top five brands on the global list are: Amazon, Apple, Microsoft, Google and Visa. This year’s combined value of Chinese brands on the list rose 16% from last year, almost triple that of all global brands. Chinese liquor maker Moutai is the fastest-rising brand, with a 58% jump in brand value, and Douyin, known as Tiktok overseas, is the highest-ranking newcomer on the list. In addition to Alibaba and Tencent, other Chinese brands on BrandZ’s top 100 list are: Moutai, ICBC, Pingan, China Mobile, Huawei, JD, Meituan, China Construction Bank, Didi, Haier, China Agricultural Bank, Tiktok, Xiaomi, Baidu and Bank of China, the Shanghai Daily adds.