China's Fast Changing Food God
Mín yǐ shí wéi tiān, the famous Chinese proverb meaning “Food is the God of the people,” has been used for generations. The definition of that God is changing rapidly for many Chinese.
Like in many industries, Chinese consumers' inherent curiosity to try new things, coupled with rising affluence and increasing awareness of what's out there from the Internet, travel and studying abroad has driven consumer demand beyond the staples. Add some pioneering importers and hospitality aficionados to the mix, and the options for dinner just keep getting better and more diverse.
Chinese consumers still typically prefer their own nosh, but there are many growing niche categories in cities beyond the sophisticated markets of Beijing, Shanghai and Guangzhou. Consumer's vigilant focus on their health has seen the market for products like olive oil swell by 184 times over the past decade. Wine consumption grew 275% between 2007-2013, with more than a third of drinkers citing health as their main reason for drinking it.
Tempting Chinese consumers to try new food varieties is no walk in the park, but there are many newish categories from wine to avocados, doing a good job through relevant marketing and education.
Localising to China's unique characteristics has been a successful strategy for many brands. Tailoring to Chinese tastes such as Starbuck's Red Bean Green Tea Frappuccino or even craft brewers' roasted sweet potato, guihua blossoms and Sinchuan pepper beer shouldn't be underestimated. Changing lifestyles are also driving food innovation, such as easy-to-prepare food for busy urbanites from brands like Barilla Pasta, cater for the 50% of urban consumers who have cooked more at home over the past year.
The Government's austerity campaign has seen a shift from gift-based purchasing to more consumer-focused buying. This has helped shoppers look beyond just pretty packaging and image, driving a real need for good tasting, quality food - similar to the changes happening across most industries in China. We hope you enjoy this week's Skinny.
Chinese Consumers
Carrefour China Opts for Convenience: Carrefour, following their recent announcement of exiting the Indian market, is diversifying its China offering by launching convenience stores. The convenience sector grew 19.5% in 2013 - the fastest growing retail sector after ecommerce.
The Next Big Thing for China's Wealthy: Etiquette Classes: Increased global travel, business expansions and mounting interest in Western education and culture has led China's wealthy to seek out etiquette professionals. Those buying Hermes handbags a decade ago are now splashing out $16,345 for a 12-day course. Millionaire households in China rose to 2.4 million in 2013 from 1.5 million in 2012 according to BCG.
Food & Beverage
Barilla Has a Fresh Recipe for Fast Success in Urban Markets: Following two years of research, pasta maker Barilla is launching a new pasta and sauce combo that is easy to prepare, aimed at modern busy Chinese consumers who are increasingly looking to cook for themselves. Italian pasta sold in China has become 'softer' in recent years to be more like noodles.
China is Getting a Taste for Craft Beers: Local microbreweries and home brewing associations are popping up all over China. Brews with Chinese characteristics include everything from Sichuan peppers to purple rice to Tibetan barley and some flavoured with tiny fragrant guihua blossoms or jasmine tea.
Increasing Avocado Consumption in China: Education is still a significant issue for avocado sellers as many Chinese consumers don't understand how to open and eat the fruit. Some brands are addressing this through in-store flags and WeChat accounts providing nutritional information, recipes and usage tips, promotions and coupon redemption. 80% of Chinese consumers still purchase their fruits and vegetables on a daily basis from traditional markets like fruit stands, push carts, farmer’s markets and wet markets.
Thank You, but We Prefer the Salt Monopoly: The 64-year old state monopoly in the world's largest salt market is set to end, but many online consumers have vented their concerns that salt scandals will follow.
The Importance of Wine Exhibitions: With wine customers in China shifting from Government gifting and institutional purchasers to consumers, wine exhibitions can be a valuable way to meet and build relationships with distributors and consumers, understand competitors and improve market insights.
Internet, eCommerce & Mobile
Consumers Without Borders: Chinese Consumers Present a Key Growth Opportunity for the U.S. Market This Holiday Season: Chinese consumers are expected to shell out ¥100 billon ($16.3 billion) in 2014 buying foreign goods online. 39% of those purchasing are aged 26-30, with 57% female. 40% were willing to share their purchases over WeChat and instant messaging networks.
Black Friday Taps Into Chinese Consumers: Alibaba and Amazon attempt to lure Chinese customers into buying more American goods during the Black Friday shopping frenzy was underwhelming. Consumers, still recovering from the massive Singles' Day festival, complained of narrow offerings and limited Chinese language product descriptions.
China eDM Performance in H1 2014: In the first half of 2014, 9.4% of Chinese receiving marketing emails opened the message according to Webpower China. 16.7% of those who opened it clicked/tapped on a link, 1.6% of recipients overall.
Chinese Tourists
Special Editions Target Chinese Travellers: Titles like Vogue Paris, Harper’s Bazaar Arabia, Condé Nast Traveller, Vogue Travel in France and Vogue Australia now create local Chinese language editions, featuring local content. Unlike regular editions sold in bookshops and newsagents, these special editions are often distributed for free in upscale locations, such as five-star hotels, department stores and cultural spots.
Middle-Earth Meets Middle Kingdom in NZ-China TV Deal: A deal enabling easier television production between China and New Zealand was announced during President Xi Jinping's recent trip to New Zealand. The increased footage of NZ in China is expected to boost tourism.
Health & Beauty
China's Latest Attempt for Better Air: One in three cigarettes globally are smoked in China, but that may change soon.
China Skin Care Market Driven by Male Beauty Products: Over the past five years, growth for China men's facial product market grew an average of 20.1% a year, twice as fast as the larger female market. China is the world's largest market for men's skincare, forecast to reach $1.2 billion this year and $2.5 billion by 2019. Whitening creams, moisturiser for cold dry winters and hot humid summers, and natural products for pollution protection are most popular, with growth in biotech, natural and organic products.
Luxury
Rémy Cointreau Takes a Bet on China: Rémy has faith that the increasingly number of uber wealthy Chinese will continue to buy its premium cognac, and isn't following its rivals such as Pernod Ricard in cutting prices and launching less-expensive drinks.
That's the Skinny for the week! On the to-dos this week, why not contact China Skinny to discuss how we could help with your marketing, online initiatives or research to take advantage of China's opportunities. Just email us at info@chinaskinny.com or call us at +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.
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