Discovering An Opportunity Amid The Threat Of Parallel Imported Products

One of the key talking points within the FMCG and retail industry has been the threat of emerging channels and parallel imported products to their businesses. But just how serious is this threat? To obtain a credible answer to this question is like finding a needle in the haystack, as there are an increasing number of distributors and retailers competing in both the bricks & mortar and online operations across Hong Kong, not to mention the complexity of selling to both local consumers as well as the mainland Chinese tourists.
With strong Q2 economic indicators such as retail sales (+12% YOY), overnight mainland visitors (+8% YOY) and day visitors (+19% YOY) recovering to levels not seen since 2013, and with Nielsen’s FMCG Index showing a +4% YOY value growth for July 2018 (following several periods of decline between 2015 to 2017), it has been observed in recent months some of the FMCG companies are offering their official imported products to emerging channels in order to protect their baseline sales. But by doing so are they simply running in panic mode? Given that some of the key account retailers seemed to have given more priorities to certain categories, in-store exclusive brands and private labels, the power of bargaining lessens by the day with decreasing ROIs. Nielsen – Read more…