Why Is China Hungry for Food from Abroad?
Melamin tainted baby formula, gutter oil, 40-year-old frozen meat, rat meat sold as lamb, cat meat sold as rabbit, fake eggs, and various other food scandals have been plaguing the Chinese food industry for years. No wonder the trust in the Chinese food system and its producers is extremely low among the Chinese consumers and those who can, especially the rising Chinese middle class, are increasingly opting for foreign made food products.
Growing and Evolving Food Market
Food scandals are not the only reason Chinese are buying foreign made food. Feeding China’s population of 1.3 billion is a demanding task. Once self sufficient in food supply, China today is one of the largest food importers in the world. This is due to a combination of reasons – among them are the growing population, the reduction of the country’s agricultural workforce due to urbanisation, and the rise of the Chinese middle class. And with rising incomes come changing diets and changing consumer behaviour.
The modern middle class Chinese consumers are health-conscious and tech savvy. They have a strong preference for novelty, are enthusiastically embracing digital technology and social media, buying food online and sharing information about brands they like and those they don’t with their online networks.
As Nielsen found out in their research, they are increasingly looking for foods without undesirable ingredients (such as artificial flavourings and antibiotics and hormones in animal products), giving preference to companies that are transparent about where and how the products were made, raised, or grown, and are willing to pay a premium for foods that meet their demands for health and safety.
At the same time, only 40 % of consumers are satisfied with the current healthy food choices available, according to Nielsen, which leaves a lot of room for new quality products on the market to meet consumers’ needs and wants.
Opportunities for Quality Food Brands
As Nielsen noted, consumption upgrade that is taking place in China features growing pursuit for health and safety in foods. According to their research, safety and healthiness have already become the top two attributes that affect consumers’ decision on what to buy in China.
Another important trend to consider is that, according to McKinsey, the upper middle class is to become the principal engine of consumer spending in China over the next decade. This means that seasoned and sophisticated shoppers, those who are able and willing to pay a premium for quality will soon emerge as the dominant force. But these shoppers are going to be more picky in their tastes.Although most Chinese consumers consider imported food and beverages a status symbol, foreign food producers will have to keep up with evolving consumer preferences and underlying reasons for their behaviour to win consumer preferences.
In the increasingly digitalized landscape of Chinese retail, food companies will have to include digital solutions to deliver unique experiences that delight and enable loyalty, as well as highlight products’ features like traceability of ingredients and transparency of food production, offering and delivering the best products to consumers – products that support their lifestyle choices and satisfy their hunger for quality and safe food products.
- Accenture: 2016 China: The Future of Commerce Has Arrived
- China Business Review: Marketing to China’s Middle Class
- European Commission: Agri-Food trade in 2015: China Boosts EU Exports
- EU SME Centre: The Food & Beverage Market in China
- Forbes: China’s Growing Food Problem/Opportunity
- Forbes: The 2008 Milk Scandal Revisited
- McKinsey: Mapping China’s Middle Class
- Nielsen: New Eating Trends in China: The Healthier the Better
- Pew Research Center: Corruption, Pollution, Inequality Are Top Concerns in China
- Shanghaiist: Slaughterhouse Near Shanghai Pawns Cat Meat Off as Rabbit
- The New York Times: In China, Stomachs Turn at News of 40-Year-Old-Meat Peddled by Traders
- The New York Times: Rat Meat Sold as Lamb Highlights Fear in China
- The Telegraph: Top 10 Chinese Food Scandals
- Time: Bad Eggs:Another Fake-Food Scandal Rocks China
- Washington Post: You May Never Eat Street Food in China Again After Watching This Video