Shoppers at in a bonded shopping center for imported goods in Haikou, South China's Hainan province, June 20, 2016. [Photo/VCG]

The growth in value of fast-moving consumer goods (FMCG) in China reached a five-year low of 3.5 percent in 2015, according to an industry report issued on Tuesday.

The China Shopper Report, the fifth published by Bain & Company and Kantar Worldpanel, dubbed Dealing with Two-speed China, suggests the rise of China's service sector and its higher paying jobs has helped boost growth among brands in premium categories, such as yogurt and pet food.

But brands in categories that traditionally cater to blue-collar workers, such as instant noodles and value beer, are suffering as many manufacturing jobs move to lower-cost countries. In 2015, the volume of instant noodles declined by 12.5 percent, while beer dropped 3.6 percent.

The country's retail landscape has also evolved, with smaller formats continuing to gain momentum. Notably, convenience stores generated a 13.2 percent growth in value last year and had an 8.5 percent growth across all city tiers, catering to cash-rich and time-poor urban consumers.

Online shopping continues to define the modern retail environment in China. Over the past four years, e-commerce in China has grown at an annual rate of about 37 percent, generating revenue of nearly 4 trillion yuan. The report found that baby related categories and skin care continued to dominate the e-commerce market.

Hypermarkets registered their first-ever drop in 2015, dropping in value by 0.2 percent in the urban FMCG market, as traffic dropped by 4.6 percent and value per household sank by 4.7 percent.

Last year, local companies continued to gain shares over their foreign rivals, having grown by nearly 8 percent and contributing to a 109 percent share of market growth. Their biggest advance occured in skin care, baby diapers, hair conditioners, toothpaste and shampoo.

Foreign companies generated the greatest share increase in fabric softener, infant formula, instant noodles and beer. However, foreign brands declined by 1.4 percent in 2015.