China’s organics market is opaque and uneducated: Analyst
James Roy, senior analyst at China Market Research, told FoodNavigator-Asia that China’s classification of ‘organic’ does not match international standards.
“The area is fairly opaque… the term ‘organic’ is still a murky concept and it is an area with fairly little enforcement,” Roy added.
Roy pointed out that the lack of clear regulation is a recipe for questionable business practice.
“With the market growing so fast, producers are rushing to present themselves as a fit to the organics category but as a result some could be cutting corners,” he said.
Roy added: “The market has also grown at a rate much faster than the abilities of the authorities to fully regulate it.”
A 2011 paper on China’s organics market by the International Trade Centre (ITC) suggested that Chinese authorities lack experience in field inspection and that this could constrain development of the domestic organics market.
Walmart mislabelling
Earlier this week, Walmart was ordered by Chinese authorities to close ten of its stores in the city of Chongqing following an inspection that found it had mislabelled regular pork as organic.
Roy said that the closures will have an impact on its reputation and will affect the overall trust of the brand.
“Walmart had a reputation of cutting fewer corners than domestic food retailers might with organic and healthy foods,” he added.
Roy explained that consumers have highest confidence in larger retailers like Walmart and Carrefour.
A niche and small market, uneducated
Roy said that while there has been a surge in organic production within China, the domestic market remains small and niche.
“There are ranges of organic products in the larger retail stores but it is only a small section and not featured in every store,” he said.
He also pointed out that the majority of the population have a “distinct lack of knowledge on organics” and the organic food industry is only relevant to wealthier consumers and city dwellers.
The ITC paper said that white collar families are the largest group, accounting for 40% of organic consumers.
It said: “Chinese consumers are very concerned about food quality, which they define less in terms of appearance and more in terms of nutritional properties and safety.”
Roy agreed: “The focus remains very much on the safety of the foods… the main understanding of organic foods is that they are not toxic and they won’t hurt you or your family.”
The term ‘organic’, means one thing in public service announcements but another thing in the minds of consumers, Roy added.
“There is still quite a way to go in terms of organic food education and understanding,” he said.
