Brief Relief for Baby FMCG
Decline is halted but the market is still not growing
After significant drops last year of -10% for value and -9% for volume, the decline of baby FMCG has slowed but stopped short of recovering, holding steady at -2% for value and +1% for volume.
This is a sign that the short-term increase in Malaysia’s birth rate only stimulated a limited improvement in the baby FMCG market. Current performance is impacted by the preceding years’ lower birth rates, so consumption for older babies is still declining despite the newfound growth among newborns. Brands need to manage their expectations: a year of improvement cannot reverse a consistent trend.
Despite the flat performance, shoppers did alter their behaviour, spending and purchasing less on their shopping trips for baby products. Spend per trip declined from RM 68.82 two years ago to RM 61.11 this year. In contrast, shoppers went on more trips to purchase baby products, from 25.2 trips two years ago to 27.0 trips this year.
Brands need to know they can cater to these new shopping trends by accommodating the additional trips and the reduced basket size.
An increase in purchase frequency can be driven by a wide range of factors. In this case, we have narrowed these down to two main reasons.
Shoppers are buying more categories, as well as buying baby products in more outlets. The number of categories Malaysian shoppers purchased for their babies increased to 4.5 in the past year, whereas the number of categories bought per trip remained flat at 1.2. This shows that shoppers were going on additional trips to purchase more categories, rather than purchasing more categories on the same trip. It is important to understand the shopping mission to determine why they are not loading up on the trips they make.
Another reason for the increase in frequency is the higher number of outlets visited. Shoppers bought baby products in 4.8 outlets two years ago, and that has increased to 5.3 this year. It would be safe to hypothesise that this increase in frequency is due to shoppers visiting a different outlet – on a separate trip – in order to purchase another category. Brands need to understand the increase in frequency, since this is a rare opportunity in a market that has been shrinking consistently for years.
