3 major trends in China’s packaged food market

NEW research has identified at least three key trends in China’s consumer market for packaged foods, a sector that has been seeing sustained growth due to rapid urbanization and rising incomes.

HKTDC Research, in a recent consumer survey, noted consumer preference for attractive packaging and international flavors, diversity of online and physical sales channels, and the growing popularity of organic varieties among the emerging developments in the market.

For the survey, packaged foods fall under five major categories: dairy products; seasoning products and sauces; snacks; grains, oils and dried products; and convenience food, including chilled and frozen food.

The report found that with rising incomes, mainland consumers are upgrading their consumption over recent years by shifting from low-price food to branded items and sampling diversified flavors. In addition, consumer preference is now shifting further to “attractive packaging design” and “global flavors.”

Consumers are moving away from bulk buys with good value for money to more attractive designs in small packs or individual packaging, said HKTDC.

“After years of exposure to buying from both domestic and foreign markets, mainland consumers are now more ready to sample different flavors for their own enjoyment,” said HKTDC.

Buying more online

The survey findings also show that the younger the consumers, the higher their receptiveness to new products with diverse flavors. First-tier cities, such as Beijing, Shanghai and Guangzhou, are more receptive to new products.

The second finding points to the fact that development of online shopping has matured, since all participants surveyed buy packaged food from online channels.

Comparatively speaking, young people are more inclined to buy packaged food online, while older consumers show different online purchases ratios.

“Such a development can be attributed to the significantly improved logistics speeds, where many online supermarkets can deliver by 3 p.m. for orders placed before 10 a.m. on the same day. In some cases, delivery of fresh food can even be made within two hours,” the study said.

Nevertheless, online shopping channels have not replaced brick-and-mortar stores. Supermarket/hypermarket remains the most significant channel for purchasing packaged food products, though their sales are showing a slight downturn.

Finally, with the gradual drop in organic food price over the past two years, consumers are showing an increasing appetite for organic food products.

While organic foods mainly emphasize the absence of pesticides and chemical fertilizers in cultivation, the message most appealing to consumers does not merely promote “safety” but “health” as well. Consumers in the older age groups have made more purchases of organic food products. (PHILEXPORT NEWS AND FEATURES)
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