Nowadays, China is one of the most interesting markets with an incredible array of opportunities for foreign companies. It reminds us of the 90s Japan on another scale a dynamic economy combine to a growing middle class ready to spend the fruit of their labor.

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English Online Teaching

 

Along with china economy’s development,  mastering English has become a necessity. English  is now compulsory in all Chinese school from 9 years old. This has resulted in the flourishing of the English industry booming all over 1st tiers Chinese city and now 2nd 3rd tiers city.

Not only people have more spending power but parents are also ready to spend good money to ensure their kids success. Parents are also well aware that English compulsory classes are not enough for their kid to become fluent in English leading to the development of more private schools and an increasing the demand for native speakers.

Now, Chinese kids busy life plus a love for connected service combined to  a lack of teachers and training center is encouraging the English online teaching market to continue its growth. Experts expect a growth of 20% per year and the reaching of 270 billion yuan of revenue this year.

Not only the English training class online are booming but a new trend is on the goes, we are expecting a huge boom in online training ( STEM ) with around 50 millions parents paying an online formation for their kid by 2020. A class usually cost  200 yuan – (US $30).

Online Training

We just said it, not only the English online market is booming but parents are always more demanding with their kids:  join the best school, have the best grades, attend evening classes… Of course this is all in an attempt to secure a good future for their kids in a highly competitive country.

The market always have an answer to the demands and in this case online training courses is the winner. Just in 2013, the revenue of online education market in China reached 84 billion Yuan with a 19.9% compare to the previous years (China Online Education Report released by iResearch.)

The 3 major sections are elementary online education, online vocational training and online higher education with a slight decline for the last one.

E-commerce: Imported Food

China’s middle class standards has evolved not only for education but also for health with an important role of the food that is consumed. The eating habits are changing as well as the shopping habits are. After years of food scandals, peoples are looking for a quality food and give a great importance to the reputation of the brand they are buying from. To sum up, they are ready to pay more for better options. For instance, 88% of Chinese consumers in 1st and 2nd tiers city are against food additives.

We can observe 2 trends in the foods consumption habits:

  • Diet changed: Dairy product and snacks are are the most commonly imported products purchased.
  • Chinese consumers are looking for “healthy food” and imported brand often sounds like a healthier version of Chinese brand.

The increase in the consumption of  imported products was also encouraged by a decreased taxes over the years making products more affordable, the reputation of a brand & or country  and always more visibility online. 60% of Chinese consumers who buy imported food buy it online because it is convenient and there are a lot more choices and deals.

omported food origine chine

Branding and Reputation are valuable in China, and the countries that important the more food in China are the Usa, Japan and France both known for the quality of their food.

Imported food also plays a social role and is often offered as a gift. Buying imported food can be pricey and not everyone can afford it, it is a way to impress.

It is worth noticing that Chinese love food and 53% of consumers enjoy trying new type of food.

Online Distribution: Organic Products

The organic market is another trends. The organic market is promising quality ingredient to the customer. As we just saw Chinese peoples are concerned about their health and the quality of the food they put in their plate, therefore often go for imported products.

The organic food market in China has grown exponentially  since 2007 to currently account for 6 percent of total food consumption making it is now the 4th consumer of organic products worldwide.  According to the 2013 market report “Organic Industry Development Report of China” close tp 10 million tonnes of organic goods were produced in China with approximately 7 million for the domestic market.

The consumption and production have been both forecast to grow with organic food constituting 3% of the domestic food market share by 2020.

The market specialists are attributing this growth to a more educated population aware and concerned about food safety and a more stable financial situation.

In addition, Chinese consumers have been massively turning to online shopping  looking for information about brands and this can be illustrated by the multiplication of online platforms such as fields china delivering in more than 200 Chinese city.

Baby care: Imported products and Services

baby tmall - baby care market china

If China care more about the food they are eating and the education of their kids, they are also very concerned about baby care. As for the food the Chinese baby care industry reputation has been damaged by repeated scandals pushing parents to turn to the outside for safer products and services.

Looking at the numbers it is clear that the industry is growing, with a rate of 15% in 2018 and with the 1 child policy disappearing and stable income it is expected to continue its growth both online and offline. Imported baby care related sales online are some of the most popular for Chinese consumers, and online channels now represent 50% of mother and baby retail market value.

The market is extremely competitive among foreign brands with 10 to 20% of the consumer considering the country of origin is a crucial criterion for conversion.  Similarly to food, quality and reputation are the most important factor when deciding to make a purchase.

Healthcare Products & Services

Did you know? 30% of the total search on Baidu is linked to health.

The Chinese healthcare market is a boon for investor. There is opportunities in both the products and the services always encourage by a better economy and the researches for high end equipment. It can be challenging because of rapidly changing law and regulation but definitely worth it.

If most of the medical in china comes from locals manufacturers, Chinese hospitals and healthcare providers prefer imported devices. It is especially true when purchasing innovative and high-tech devices that outperformed middle ranged local product. This trends is feed by an aging population and a government in the pursuit of improving quality of care.

When it comes to healthcare quality is absolutely key. Chinese consumers are now able to pay more for healthcare with GDP still growing by 7% year on year. This  indicate there will be no slow down in this market as the Chinese avidly embrace international health products in new and interesting ways. Indeed Vice Premier Li Keqiang himself said the health-care industry has now entered “uncharted waters.”

Travel Agency providing unique experience

With better quality of necessities such as food, health and education, China middle class is looking forward to improve quality time and spend this hard won money. What is better than discovering the word?

It has never been easier for Chinese population to travel around. The volume of international travel by Chinese travelers grew from 10 million in 2000 to nearly 100 million in 2013 to 68 millions by 2016 and this figure is expected to reach 100 million by 2021.

China tourism have long been dominated by operating tour but the last trend is showing a shift toward individuals travel with an increasing numbers of Chinese traveling to more exotic destination such as Thailand, Cambodia, Philippines, Morocco and Vietnam. Not only they travel to new destinations but they continue to travel to popular one such as France, the United States, U.K., South Korea and Japan. It is expected that 100 millions Chinese will travel abroad by 2021. According to a survey by booking site Hotels.com and Ipsos, shopping is no longer the major reason for international travel among Chinese tourists. Instead, dining, sightseeing and exploring the local culture have all become increasingly appealing.

This change in tourist behavior is a gold mine for tourism agency. The industry is not yet keeping up with the pace of change in the behavior of Chinese tourism and this is a great opportunity to develop unique services.

Fashion Clothing

China’s fashion clothing market constitutes a great opportunities for foreign brands because of its size. It is good to keep in mind that the competition is harsh and a well planned marketing strategy is going to be necessary to succeed.

That said Euromonitor  figures show China’s adult garment market was worth around RMB1,457.8 billion in 2017, with an increase of 5.2% year-on-year. Market value is expected to reach RMB1,592 billion by 2019.

The Chinese women’s garment market was worth around RMB923.2 billion in 2017, plus  5.7% over the previous year and the men market witnessed a 4.4% growth with a RMB534.6 billion in 2017.

Underwear showed the fastest growth, with a 7.8% increase. Market value is expected to reach RMB1,096.1 billion by 2021 and plus 6.5% of annual growth for the men .

Demand for limited more unique edition is increasing offering designers and niche brand to expand. We can also see an increasing demand for high quality garments

Another trend to mentioned is the demand for casual wears. This market is less saturated and has a lot of possibilities to offers.

Despite the market slowing down the online sales continue its growth. In the B2C online fashion shopping market, Tmall, JD.com and vip.com are the main platforms. E-commerce is the way to go for any brand for few reasons: cost savings; easy to track customer consumption habits and finally an easy way to clear inventory.

To sum up

China is full of opportunities for foreign brands, imported products and services are often seen as high-end and quality is decisive for a Chinese consumers to purchase. To succeed in China you will not only have to have excellent service but to make yourself a name. There will be an enormous branding work to be done but the results will be rewarding.

Are you a company looking to expend your business in China? At GMA we are a teams of International specialists on Chinese marketing and could help you with your strategy.