You already know that to success in China, you have to be adaptable as the environment is changing fast. Along with the country’s growth and development, Chinese Shoppers are also upgrading. The value growth of consumer goods has rebounded as China’s expanding middle class continues to seek out upgraded goods that serve to improve health and elevate their lifestyle. They are spending more on premium goods, doing it across the board. What is the phenomenon of premiumization and what are the promising categories for business in China ? this article will give you information about that.
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The overarching force : premiumization
The increase of middle class in china, the various available products on the Chinese market making its consumers more and more demanding, the fast flow of information, the high competitiveness in China… all these changes and pressure from the market push brands and consumers to upgrade their consumption in China. We are in a period of premiumization for foods, services and goods.
Thus, bad quality products will be eliminated in the competition. There will be more people at a higher income level who will spend more on categories and sectors that they now can afford; and in the other side, there will be fewer people at a lower income level buying the categories that are the main focus of this lower income level.
For the food premiumization, pleasure is also an important contributor. Categories that provide taste or more pleasure have demonstrated strong growth momentum. Even instant noodle players Master Kong and Uni-President continued to introduce new premium products such as Soup master to keep their upgrading consumer. It’s important to create a link with your target consumers if you are a new brand in China, and to maintain this link if you already made it.
What are the fastest-growing categories in China ?
It’s well-known that Chinese people care a lot about appearance, they have been spending a lot on skincare products. In recent years, female but also male consumers started to put time and money on makeup learning. To be natural is still appreciated but to know how to make up is also considering more and more as a skill.
- Pet food
The Chinese are today eager to bring a lifestyle as good to their animals as to their children, which was far from the case in the past. Pet owner considers their pet as a member of their family and want to give the best for them, spending sometimes impressive amounts. The advantage of choosing the pet sector is that, in addition to being expanding, it remains wide and varied. Everything about this market can be prosperous: food, clothing, toys, connected accessories, medical treatments, vaccines, grooming salons, etc. Pet owners are expected to spend not far from $ 7 billion by 2022, resulting in a steady growth in this market of around 20% according to Euromonitor.
- Soybean milk
Soybean milk is related to a healthy food. In fact, due to several diseases occurred in the past in China, and what we can daily see from newspapers and internet about health in China, people put a lot of importance in health care. They appreciate foods based on natural ingredients which can provide positive effects to their body. While in China, consumers are not so used to cow’s milk, soybean milk is a product well appreciated by a large number of Chinese.
- Nutrient supplements and cereals
This category grew by 6% t 7%. In fact, this type of strong health benefits products performed particularly well. With the high pace of life in China, a lot of workers are sometimes under pressure and need to find a better consumption way to remain efficient at work. Besides the aging population also contribute to increase this health products demand in China.
- Infant formula
Infant formula grew by 8.7%. In addition to its perceived health enhancements, infant formula was the beneficiary of China’s two-child policy, which has boosted sales across all baby-related categories. The relaxation of the one-child policy, the scandal of melamine poisoning in 2008 and the increase affluent middle class pushed forward the rise of the demand for milk powder, which has increased tenfold in less than a decade.
How to enter in the Chinese market ?
As we mentioned it before, to build a relation with your Chinese consumer important in China, to success in a long-term strategy.
Leverage social media
WeChat is the most used communication app in China. Chinese people daily use and spend time on it to check about news from their followed accounts, friends or professional contacts. You can set up your Wechat official account on it, which is the better way to keep in touch with your target consumers.
E-commerce to sell in China
Chinese consumers are more willing to purchase online because of the convenience and the greater range of available items on e-commerce platforms. Nowadays, Chinese consumers have a huge appetite for foreign products and e-commerce platforms have become the channels of choices for Chinese shoppers looking to purchase such items.
To Choose the right channel is important but it also depends in your activity. For example, TMALL and JD are two ecommerce platforms (the most popular in China) where you can buy or sell almost everything. However, if you are doing business in the clothing industry or beauty sector, Vip.com or Xiaohongshu will better suit your products and reach in that way more interested consumers.
Gentlemen Marketing Agency is specialized in the digital marketing in the Chinese market. Our agency offers a complete range of service for e-commerce marketers from e-commerce consulting to digital marketing operations. We have developed many successful e-commerce projects because we know how to effectively promote your e-commerce business in China by using the latest digital tools.
At this stage of development, China has a lot of booming industries. This is a promising and huge market with its own culture and way to function. Want to start a business in China? Do not hesitate to contact us.
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