(Yicai) Dec. 10 -- The Chinese fast-moving consumer goods market, which has stabilized after a sluggish last year, is entering a new round of structural adjustment, with online-to-offline platforms becoming significant growth sources, according to a new report.

China's retail and consumer ecosystem has entered a restructuring era, with the roles of channels transforming, the report jointly released by US management consulting firm Bain & Company and UK consumer data provider Worldpanel by Numerator showed yesterday. Brands must compete across online, offline, and O2O channels, while they need to rethink how to deliver, differentiate, and grow due to the power balance shifting from brands and distributors to retailers and consumers.

The O2O instant commerce market increased 7.9 percent in the three months ended Sept. 30 from a year earlier, reversing last year's decline, according to data from Bain. The primary drivers include the increasing popularity of instant delivery services, the expansion of product categories, and promotional activities across major platforms.

"The power of distribution channels is becoming increasingly important, with some even representing growth trends for certain consumer categories and serving as entry points for new consumers," Deng Min, senior global partner and chairman of the consumer and retail business for China at Bain, told Yicai.

Social commerce and platforms focused on cost-effectiveness continue to grow their e-commerce market share, with Douyin, TikTok's sister app in China, and discount shopping site Pinduoduo accounting for over 40 percent of fast-moving consumer goods sales, the report said. These platforms integrate shopping activities, including purchasing and delivery, into a seamless, real-time connection.

"The competition for channels will be crucial in the future," Deng noted. "We are in an exploratory stage on how to collaborate better with different channels and seize these emerging growth opportunities."

Regarding whether the subsidies battle in the Chinese food delivery market will continue next year, Li Rong, general manager of Worldpanel China, said to Yicai that "monitoring data shows that while promotions have boosted sales, the overall transaction value has not seen a significant increase, indicating that consumers are still relatively cautious with food delivery spending.

"We predict that as these subsidies gradually weaken, the overall market will remain relatively resilient," according to Li. "Therefore, we expect a moderate growth trend at a low speed next year, similar to this year."

China's fast-moving consumer goods sales revenue climbed 1.3 percent in the first three quarters of this year from a year ago, primarily driven by sales rising 3.8 percent, while the average price fell 2.4 percent, an improvement from a 3.4 percent drop last year, according to official figures.

Editor: Martin Kadiev