As China’s economy continues to grow only at a moderate pace, market research has found that consumers have been more conservative in 2017 than they were last year.
They are also more likely to spend money on premium and healthier food and beverages to the detriment of the lower end of the market.
According to an online survey of shoppers by Mintel, 36% said they had spent more this year, compared to 43% who said the same in 2016.
Meanwhile, consumers are more likely to control their spending this year, with nearly half reporting that they are spending “about the same” as they did in 2016.
Aware of potential future risks to their finances, they say they want to make sure that every purchase can be justified, and that what they buy is worth the price.
Overall consumer spending increased by 10.5% to RMB33.51tr (US$4.96tr) in 2016, and Mintel predicts that this will continue at an annual rate of 8.4% until 2021 across all retail categories.
In terms of the in-home food market, the market intelligence agency expects sales to reach just over RMB7tr over the same period, driven by demand for healthier and more premium products.
Indeed, achieving a healthy lifestyle continues to dominate the priorities of Chinese consumers, with 80% saying they would definitely strive to “have a healthier diet” this year.
“Demand for upgraded consumption for new options, better quality and greater convenience will be the major driving factor in 2017,” said Laurel Gu, research director at Mintel.
Looking forward, yogurt products positioned as an indulgent pleasure and cheese for snacking occasions will see the greatest potential. At the other end of the market, both ready meals and instant noodles are in jeopardy due to thriving food delivery services, Gu predicted.
China’s non-alcoholic drink market is likely to retain its upward trend with annual growth of 7.2% over the next five years. Consumers’ ongoing interest in pursuing healthy food and drinks is becoming evident, as is their growing knowledge of nutrition.
As such, the premium soft drinks market should see more products featuring clean and natural labels that create associations with functional health benefits.
Plant protein and functional beverages, as well as some light-flavoured drinks, are all growing in popularity, Gu added.
More from China…
Chinese officials crack down on food-safety rumours
Chinese food inspectors must become more transparent in a bid to control food-safety rumours circulating on social media.
According to a statement released last week by the Food Safety Commission under the State Council, together with nine other agencies, inspection authorities will have to publicise “accurate and complete food-safety supervision information”.
Overall, the commission found that China’s food safety situation is “positive”. However, it has set out to address rumours that surface from time to time, and lead to public concern.
The body notified inspectors that they have a duty to name the companies implicated in rumours and force such businesses to take action where necessary.
However, it also warned organisations or individuals not to release reports or warnings about national food safety issues without official authorisation.
According to the statement, no entities can publish or distribute food inspection reports issued by unqualified institutions.
Law enforcement agencies were also ordered to punish anyone who starts or spreads false food safety rumours.