China's local brands are leading the market race, gaining market share faster than foreign labels as they are able to cater regional tastes and quickly respond to domestic demands.

In 2015, overall sales of local companies grew 7.8 percent in some consumer-goods categories, including personal care products, while foreign brands declined 1.4 percent, according to a report by Bain & Co. last Tuesday.

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Bruno Lannes, a Bain partner and co-author of the report, said that the figures suggested that domestic brands are now becoming "better and more competitive," although some foreign brands from other categories, including infant formula and instant noodles, maintain gains in China's market share.

According to the Wall Street Journal, the report, which covers 26 different consumer goods categories, suggests that firms investing in China are heading towards two directions, that is, either they increase sales by adjusting their strategy based on China's economy or stagnate and lose.

"Domestic firms have become more aggressive about fine tuning products to suit what consumers are asking for," Ben Cavender from China Market Research Group said. "As a result, they have become more nimble than foreign companies."

Lannes also cited that local companies, which usually fall as first- or second-generation entrepreneurs, could quickly stock and deliver in-demand products to the market, as huge international firms still need to seek product approval from management.

He also cited that local firms are actively sponsoring television shows and spending for advertisements in China. In addition, they can easily team up with e-commerce websites, including Alibaba and JD.com, to sell their products online.

To gain market share, foreign clients should thus localize their decision-making and product innovation, Bain suggested. He also noted how winning in China is important to wining globally.

Tagslocal brands, consumer goods, Bain & Co., china, foreign brands