China is increasingly consuming global brands and foods in tandem with their rapid development. It is, after all, the largest and fastest growing economies in the world. Key drivers shaping this consumer market growth is the increasing GDP and greater consumer spending power in these countries, which in turn facilitate rapidly changing lifestyles, a growing aspirational middle class, and rising interest in health and wellness. This provides a tremendous boost to the F&B industry; presently, China accounts for a US$700 billion market-share in the global F&B market.
Market Structure
While its F&B markets offer great potential for growth, businesses entering China must take into account the structural and cultural factors that shape its consumer demand.
This is key to the success of F&B brands; China’s consumer markets is constantly evolving and companies need to be sensitive and responsive to the local environmental, social, and economic factors that impact consumption trends.
For instance, China has a burgeoning middle class population with rising levels of personal disposable income; yet, the pattern of personal consumption expenditure (PCE) on F&B items greatly varies in this market.
Connected consumers are increasingly aware of food scandals as well as the benefits of healthy eating. In China, thanks to traditional Chinese medicine’s influence, health is the foundation for all that they do. This indicates that brands need to have distinct strategies for this market around what drives consumers to be healthy.
To illustrate, China portray unique preferences in terms of its “Liquid Delivery Needs”. We identified a focus on key words such as nutrition, balance, and ‘feeding the body’, which translate to a desire for more premium waters, RTD teas, probiotics, and fruit juices.
Food Safety and Regulations
China’s food safety and regulation also inform consumption habits and preferences, having undergone rapid development in the last few years.
With the increasing Chinese appetite for imported food products and food safety scandals on the rise, China has introduced series of amendments under its 2015 National Food and Safety Law. These amendments give broader regulatory powers to authorities, and seek to introduce special measures concerning health foods, medical foods, baby foods, and GMO foods, bringing them within the remit of the Food Safety Law.
To avoid fines, forfeiture of benefits, revocation of license and other severe penalties, companies exporting F&B products to China must ensure that their food products comply with the national food standards.
For example, food products entering China must display an ingredient list that marks clear differentiation between raw material and food additives. Importers should check the list of approved food materials by the Chinese government, and verify whether the component ingredients are classified as a food or as a drug. Thus, companies should keep up to date with all food related notices released by China’s National Health and Family Planning Commission.
Challenges
While China offers vast opportunities in the F&B industry, brands entering its market need to be conscious of potential challenges. The most important of these relate to the complicated regulatory framework and stringent food laws in this country, and its infrastructure and pricing strategies employed by domestic players.
To be successful in Chinese markets, F&B companies need to be sensitive to sociocultural and other factors shaping consumption trends. This is where direct market research becomes important as engaging with consumers on the ground offers crucial insights that enable companies to create or customize products that can satisfy consumers’ rapidly evolving needs and preferences, and also stay price effective.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020,Dongmen Rd South, Luohu , Shenzhen, China.
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