The food and beverage industry in China is continuously "changing" in 2024, shaped by changing consumer preferences, technological advancements, and economic shifts.
What CEO and export manager need to know about the F&B in China? :-)
5 Trends in the Food & Beverage Business in China
- Health : There's a growing demand for healthy and functional food and beverages among Chinese consumers, particularly products that offer added health benefits such as immune support, digestive health, and stress relief. This includes organic, natural, and "free-from" products (gluten-free, sugar-free, etc.).
- Luxury: Chinese consumers are increasingly willing to pay a premium for high-quality products. This trend is especially pronounced in categories such as craft beverages, artisanal foods, and imported goods that signify a higher status or offer a unique experience.
- Ready-to-Eat Meals: As urbanization continues and work-life balance becomes a challenge, there’s a significant uptick in demand for convenient meal solutions, including ready-to-eat and ready-to-cook products that do not compromise on taste or quality.
- International Lifestyle: There is a growing curiosity and acceptance of international and regional cuisines as consumers, especially the younger generations, are more exposed to global cultures. This includes a demand for authentic foreign brands that can provide a genuine taste experience.
- Brand value : trust, security, etc are concerns of Chinese People. Of course, imported brands have to show transparency about ingredients, sourcing, and production process is increasingly important.
Market for Foreign-imported Brands
- Young Consumers: The younger demographics, particularly millennials and Gen Z, are the primary market segments that are exploring and embracing foreign F&B brands due to their openness to new flavors and lifestyles.
- Tier 1 and Tier 2 Cities: Consumers in these urban areas are more likely to seek out foreign brands due to higher disposable incomes and greater exposure to international trends.
- Health-Conscious Segments: Those focusing on health and wellness are particularly interested in foreign brands that can offer organic, all-natural, or specially formulated health products not widely available from local brands.
Expectations from Chinese Distributors
- Adaptation: Stop to be lazy ;-) Distributors expect foreign brands to understand and adapt to local tastes and preferences. While authenticity is valued, tweaking products to suit local palates can be crucial for acceptance.
- Regulatory Compliance: Compliance with China's strict and often changing regulatory environment is crucial. Distributors expect foreign partners to navigate these with due diligence to avoid market entry barriers.
- Support in Marketing and Promotions: Active participation in marketing and promotional strategies is expected. This includes digital marketing efforts, especially leveraging platforms like WeChat and Douyin, where much of the consumer engagement happens.
- Supply Chain Efficiency: With the complexity of logistics in China, distributors value partners who can manage efficient supply chains that can adapt to market demands quickly and reliable
- Brand awareness & Storytelling: Effective branding that resonates in Chinese wallets ;-) or aspirational aesthetics can help position a foreign brand strongly in the market. Distributors look for clear, compelling brand stories that can be easily communicated to consumers.
Marketing Trends in China for F&B
Yes Marketing is important in China :-)
1. Douyin: Engage Visually & Virally
- Unique Quote: "Turn every snack into a spectacle, and every sip into a story."
- Douyin is the ideal platform for launching visually captivating F&B campaigns that can quickly go viral. Brands often use short, engaging videos to showcase the allure of their products, from the texture and taste to the context in which they are consumed, targeting a predominantly young audience.
2. Red (Xiaohongshu): Leverage Lifestyle Integration
- Unique Quote: "Where food meets fashion and fitness, fostering a feast for the senses."
- On Red, F&B marketing is all about integrating products into broader lifestyle narratives. This platform is perfect for targeting urban, primarily female demographics interested in premium and health-oriented food products as part of a chic lifestyle.
3. Dianping: Capitalize on Reviews and Recommendations
- Unique Quote: "Your flavor footprint in every review."
- Dianping is crucial for F&B businesses due to its extensive user-generated content regarding restaurant reviews and food service ratings. Brands can leverage positive reviews and engage actively with users to boost their reputation and visibility.
4. WeChat Video: Build Community and Consistency
- Unique Quote: "Feed their eyes to fuel their need."
- WeChat's video capabilities allow for deeper storytelling and the creation of community-driven content. Brands use this feature to broadcast longer-form content that can establish a sustained narrative around their products.
5. Zhihu for Health: Educate and Inform
- Unique Quote: "Sow knowledge to reap loyalty."
- Zhihu, as a platform renowned for its in-depth answers and expert insights, is an excellent channel for F&B brands focusing on health and nutrition. Here, brands can position themselves as thought leaders by providing detailed, informative content about the health benefits and nutritional values of their products.
Logistics of Food in China: Questions and Answers
Q1: What are the key challenges in food logistics in China? A1: The major challenges include maintaining the quality and safety of perishable items across vast distances and varied climatic conditions, navigating a complex regulatory environment, and adapting to rapid changes in consumer demand patterns.
Q2: How important is technology in the logistics of food in China? A2: Extremely important. Advanced technologies such as blockchain for traceability, IoT for temperature control and monitoring, and AI for predictive analytics in supply chain management are increasingly being deployed to ensure efficiency and transparency.
Q3: What role does e-commerce play in food logistics in China? A3: E-commerce is a major driver of innovation in food logistics, demanding faster, more reliable delivery services. It has led to significant investments in cold chain logistics and the development of urban fulfillment centers to facilitate quick deliveries.
Importation Tax in China for Food and Beverage, including Alcohol
Importation taxes in China vary widely depending on the product category, origin, and existing trade agreements. As of the latest updates:
- General Food Products: Import duties can range from 5% to 20%, depending on the type of food product.
- Alcoholic Beverages: Taxes are significantly higher for alcoholic products. Import duties on wine can be around 14%, but other taxes like excise and additional tariffs, especially on products like spirits, can push the total tax burden to over 40%.
- Trade Agreements: It's important to note that China's trade agreements with certain countries can lower these tariffs. For example, products imported from countries with which China has a Free Trade Agreement (FTA) might enjoy reduced tariffs.
Understanding these facets of the Chinese market can help international F&B brands and marketers to strategically navigate entry and expansion, aligning with both consumer interests and logistical capacities.
