Food sales in China is a dynamic industry. The rise of the middle class, the increase of products available on the market, and a lack of confidence in local products has led to dramatic changes in the grocery shopping landscape.
Sales of imported food products in China are at a record high with a growth rate of 15% per year against a worldwide average of around 4%.
Competition is also high, and for imported goods it is getting harder. Improvements in the quality of Chinese products and higher taxes for imported goods pose potential barriers to success for many producers of overseas products.
But harder does not mean impossible. There is still a strong demand for imported products and, if you understand what the Chinese consumer is looking for, you can increase your chances of securing your place in the market.
For those interested in entering the imported food product industry, Gentlemen Marketing Agency has prepared this overview of the shopping habits of Chinese consumers. It is based on market research conducted with 196 Chinese shoppers from a variety of demographic backgrounds.
1. General food purchasing behaviour
1.1 How are consumers researching food products
As with most things in China, the internet is the main source of information when it comes to Chinese consumers researching food brands. Nearly two thirds of respondents said they checked Baidu (China’s Google) for information on food brands before purchasing a product. Family and friends represented the second most popular source of information.
Results for newspapers and magazines are low as expected. Print media advertising is not a primary marketing avenue for food in China as it is costly and difficult to measure.
The results for social media and mobile apps are interesting with only 9% and 8% respectively. For the purpose of this analysis it is hypothesised that respondents generalised their response into the internet category. It does however warrant further investigation at a later date as social media usage in China is enormous.
In this section, age did not play an important factor in results with similar results across all age groups. The one area where age did play a factor worth considering is in the 25 -34 age group where they are more likely to be strongly influenced by word of mouth referrals from friends or family or through social media.
1.2 How are consumers shopping online
Online food sales continue to grow in popularity as consumers seek convenience and choice.
From the surveyed panel, 94 % had purchased food online, with Tmall the preferred platform. JD and Yihaodian also performed well.
Buying directly from the brands website ranked further down in fifth position. This can be attributed to the strategic move by many brands to distribute through a larger Chinese e-commerce platform for logistical ease. For the consumer, it is more efficient to visit an aggregator site to find all option so this strategy is effective at both ends of the cycle.
2. Imported food buying behaviour
2.1 Are consumers buying imported products
A high proportion (84%) of respondents had purchased imported food.
There was little difference in the results per city, with Beijing just surpassing Shanghai.
Shoppers aged over 45 are the most timorous when it comes to buying imported products but results are still strong at 72%. The highest uptake was in the 35 to 44-year age group where 91% of those surveyed had purchased imported products.
74% of those surveyed purchased imported food as a gift. This is most likely a reflection of the perception that imported food is of a higher quality and is therefore more valuable. As a result packaging and branding is very important.
2.2 How the Chinese buy imported products
The purchasing behaviour of imported products is in line with domestic shopping practices.
60% of respondents who buy imported food do so online, with 70% stating it is most convenient. Additional comments noted that shoppers could also find better prices through online platforms than in traditional stores.
Friends and family recommendations, as well as online information was the driving factor for 67% of the panel to buy imported food online.
2.3 What imported products are Chinese buying
China imports a wide range of food products including dairy, meats, bottled water and confectionary as well as beverages- including alcohol, coffee and tea.
For the respondents of this survey, dairy products and snacks foods were the most commonly purchased. More than half of the respondents who buy imported food have bought at least one product for either category.
2.4 What are Chinese consumers looking for when buying imported products
Safety is the most important issue for 80% of the panel. For a country often rocked by food scandals this is not a surprising result.
Quality ranked second, seen as an important buying trigger for 66% of the panel. Two out of three respondents who buy imported food are impacted by the brand.
2.5 What are the popular source markets for imported products
The United States and France are the most popular source markets for those surveyed.
These two countries are seen as having the best reputation for food.
Japan and Italy follow closely behind, with New Zealand and Australia also ranking well. Locally these countries appeal to consumers on two levels.
Firstly, they are thought to be more advanced in food production with better production methods and more hygienic factory environments. Secondly, they are aspirational destinations with lifestyles the Chinese try to emulate. For the affluent young Chinese, consuming these products can mean a sign of wealth and worldliness.
The survey clearly shows that there is a place in the market for imported food products and that consumers are open to buying them.
Partnering with popular e-commerce sites for online sales is an effective strategy for distribution, allowing more consumers to access your product.
Companies who promote verified safety and quality on packaging and through marketing activities will be more attractive to Chinese shoppers who rate these attributes as very important when considering their purchases.
This alone is not enough. Where brands will generate real traction is through investment in digital marketing and building e-reputation. In China, reputation is everything and with social media so widespread, everyone can have a public opinion on everything. Making sure customers are talking about your brand through these channels in a positive manner will build your brand profile and, in turn, should result in greater sales.
Using experienced marketing agencies such as Gentlemen Marketing Agency can make the process easy, designing strategies effective for the Chinese consumer.