The Hainan Consumer Products Expo, held annually in Haikou, has emerged as a premier platform for global brands to engage with China’s burgeoning consumer market. In 2025, the event took on special significance for the UK, which was named the guest country of honour for the first time. This accolade underscored the strengthening economic ties between the UK and China, with British exports to China reaching £28.5 billion in 2024. The China-Britain Business Council (CBBC) played a pivotal role in facilitating the participation of British brands, including health retailer Holland & Barrett and tea specialist Whittard of Chelsea.

The Hainan Expo, now in its fifth year, attracted over 300,000 visitors and featured 4,000 brands from 80 countries, with a focus on premium consumer goods. China’s consumer market, projected to reach US$8.2 trillion by 2030, is a magnet for international brands, driven by a growing middle class and increasing demand for high-quality imports. For British businesses, the expo offered a strategic opportunity to showcase their products, build brand awareness, and forge partnerships in a market where e-commerce and cross-border trade are thriving. The UK pavilion highlighted Britain’s reputation for innovation and heritage, with CBBC members like Holland & Barrett and Whittard leading the charge.

Holland & Barrett, a household name in the UK for health and wellness products, made a significant impact at the 2025 expo. For the company, it was their first major appearance at Hainan, following a smaller presence in Hangzhou the previous year. Sophia, representing Holland & Barrett, expressed enthusiasm about the opportunity.

“We think it’s a good opportunity to make some business here, especially as the UK is the country of honour this year”. In China, where the health supplement market is expected to grow to US$50 billion by 2027, Holland & Barrett is a relatively new player, having entered the market just seven months before the expo. This necessitated a tailored approach to meet the preferences of Chinese consumers.

Unlike its established retail model in the UK and Europe, Holland & Barrett has adapted its strategy in China to focus on products designed specifically for local tastes. Sophia explained, “We make products especially for Chinese consumers, so we consider such things as localising ingredients and how we consume them”. This localisation effort includes developing supplements with appealing flavours, as Chinese consumers often prioritise taste alongside health benefits. This focus on consumer experience, coupled with the expo’s high visibility, positioned Holland & Barrett to capture the attention of China’s health-conscious urbanites, particularly millennials and Gen Z, who drive demand for premium wellness products.

Whittard of Chelsea, a British tea brand founded in 1886, also seized the opportunity to showcase its heritage at the Hainan Expo. Participating for the first time, Whittard was selected to represent the tea, coffee, and hot chocolate category within the UK pavilion. Katherine Oon, Whittard’s International Sales Manager, expressed excitement about the event. “This is our first time participating in the Hainan Expo and we are very excited to be part of the UK pavilion,” she said. Tea holds deep cultural significance in China, but Whittard distinguished itself by introducing British tea traditions to Chinese consumers. “We want to bring the British tea lifestyle and the traditions to the Chinese customers,” says Oon. “So it’s about educating them on afternoon tea, British blends like Earl Grey, English Rose and the Britishness of tea traditions.”

Whittard’s approach respects China’s rich tea culture while highlighting its unique offerings. The company sources teas globally, including from China, but its expertise lies in blending, a hallmark of British tea culture. At the expo, Whittard’s tea-tasting sessions were a highlight. “Tea tasting is always busy. It’s our experience, it’s a tea journey that every customer enjoys,” says Oon. These interactive experiences resonated with Chinese consumers, particularly affluent urban professionals who value premium and experiential products. The expo’s focus on cultural exchange allowed Whittard to position itself as a bridge between British and Chinese tea traditions, fostering consumer curiosity and brand loyalty.

Looking ahead, both brands outlined ambitious plans for 2025, leveraging their expo participation to deepen their foothold in China. Holland & Barrett aims to expand its product range and distribution channels, building on the momentum gained at Hainan. The company’s focus on localisation aligns with China’s growing demand for health products tailored to local preferences, supported by the country’s 105 cross-border e-commerce pilot zones. Whittard, meanwhile, is set for a significant push this year.

“2025 is going to be a big year for us. We set up a team in China, I will be relocating to Shanghai, and as a brand itself we are going to have more opportunities for collaboration for partnerships and introducing the whole British afternoon tea to the Chinese consumer,” says Oon. This strategic relocation and focus on partnerships reflect Whittard’s commitment to embedding itself in China’s market.

The success of Holland & Barrett and Whittard at the Hainan Expo underscores the broader opportunities for British brands in China. The event’s emphasis on the UK as the country of honour amplified their visibility, allowing them to connect with distributors, retailers, and consumers. CBBC’s support was instrumental, however, challenges remain, including navigating China’s regulatory landscape and competing with domestic brands. The CBBC advises British firms to invest in local partnerships and cultural understanding to succeed, a strategy both companies employed effectively.

The post Hainan Consumer Products Expo 2025: British Brands Shine in China appeared first on Focus - China Britain Business Council.

Projections suggest that revenue in the Chinese food market will amount to US$1,386 billion in 2023. The market is expected to grow annually by 9.34% (CAGR 2023-2027), and, most notably, approximately 34.6% of total revenue will be generated through online sales by the end of the year.

Consumers are choosing healthier, more premium brands

The trend of consumption “upgrading” in China is not a new one, with consumers in higher-tier cities already used to buying premium and luxury products. However, today, more Chinese people in lower-tier cities are choosing more branded products, and while the pandemic dampened spending to some extent, the trend is still present and increasing. 

The F&B industry is experiencing a similar pattern. Affluent and informed Chinese consumers have begun to prioritise better health and a better quality of life. As a result, products aligned with healthier lifestyles have seen increased demand.

This is evident across the beverage industry. Packaged drinking water is the biggest beverage segment in China’s soft beverage market. While purified drinking water has a majority share of this segment, natural water and mineral water have increased rapidly in recent years because of growing health consciousness. Likewise, reduced or no-sugar teas, cleansing juices and nutritional drinks have all experienced higher demand.

A recent survey revealed that 86% of consumers from tier 1 and 2 cities considered food safety before buying produce. Fresh food, including vegetables, eggs, meat and fruits, is a high-demand category as it is considered natural and chemical-free. In line with this, healthy packaged food such as salads is another area that is seeing growth.

Besides health and safety, Chinese consumers are showing a preference for premium brands. Relating to alcoholic beverages, consumers are now placing more value on experience and enjoyment and hence are prepared to pay more for products that fulfil this need. 

Companies that offer a variety of premium products that focus on the idea of being “authentic, natural, healthy and high quality” will enjoy a significant advantage in the Chinese F&B industry. 

Food shopping moves online 

Like consumption upgrading, online shopping is not a new development. Mandatory Covid lockdowns accelerated the pace of adoption among consumers, and e-commerce is now a vital part of consumer shopping behaviour in China, with 34.6% of total revenue generated through online sales.

The e-grocery (fresh produce and fast-moving consumer goods) rate, however, has lagged at 10% penetration, and this is likely due to the short shelf-life of fresh food, which puts demand on logistics, as well as offline channels such as convenience stores that cater to on-demand items. Improved infrastructure and distribution channels, as well as brands shifting online, are expected to accelerate e-grocery penetration rates to 33% by 2025.

Digitally savvy younger consumers enjoy the convenience of buying groceries online. And it is not just consumers in tier 1 and 2 cities that are doing so; shoppers in tier 3-5 cities are also embracing this trend and are expected to contribute to more than half of the increment in the e-grocery market size between 2019-2025.

Another area hit hard by Covid lockdowns was the food service sector. However, China has the fastest-growing food service market in Asia, estimated to reach US$ 914.09 billion by 2027. China’s per capita income has been growing year on year, so eating out is becoming the norm. The market demand for food services is increasing since its citizens are looking for a more convenient life, which implies that the future will also have a broader foodservice market.

During the health and economic crisis created by Covid, the purchase of local products also became significant for Chinese consumers. Despite the financial difficulties many families face, the quality of food products remained top of mind. During lockdowns, home delivery had seen tremendous growth; however, as dine-out reopened, the situation returned to balance.

Innovative products in demand

With competition in the F&B industry in China increasing rapidly, companies are looking to innovation to attract consumers. New products, new packaging, new channels and new ways of marketing are also part of the latest market strategies. 

In the beverage segment, companies are continuously creating new products to cater to younger consumers. Likewise, China’s local condiment producers have launched customised, functional products to meet the demands of different consumers. For example, in the soy sauce category, there are customised sauces for clay pot dishes, Hainanese chicken rice and steamed fish. The retail prices of these sauces may be more than double those of ordinary products. 

Technology is also playing a huge role in helping innovation; for example, the popularity of live streaming has helped many new product launches attract the attention of younger consumers. Online live broadcasting and direct-to-customer (DTC) online sales channels have become popular and efficient ways to reach consumers for brand building, marketing and sales, especially for emerging brands. 

What F&B categories are seeing the most growth?

In terms of F&B categories, analysts believe that premium alcoholic drinks, yoghurt and fresh dairy, innovative compound condiments, packaged drinks and health supplements will experience above-average growth rates. 

Experts admit that the current Covid situation in China makes consumer trends unpredictable at the moment, despite China’s official data showing low infection figures and few deaths. Observers believe the lifting of the strict controls on movement could, in fact, boost the economy, regardless of the resulting increase in infections. 

Chim Lee, a China/Asia analyst for the UK-based Economist Intelligence Unit (EIU), predicts that the end of China’s Zero-Covid policy will have a mixed but ultimately net-positive impact on packaged food sales. Lee notes that, relative to other retail categories, food sales were a bright spot in 2022, as the packaged food industry benefited from people stockpiling food in anticipation of lockdowns and other restrictions on mobility. 

Research group GlobalData noted that the overall value sales of packaged food in China crossed the US$1 trillion milestone in 2022, with an increase projected in 2023. GlobalData says meat, dairy, soy, bakery and cereals are set to be the largest categories in 2023, contributing well over half of the overall packaged food sales in China by value.

Citing a recent survey conducted among several securities brokerages, analysts from Stockstar found that a total of 30 food stocks traded on Chinese bourses achieved growth in net profits in 2022. It singled out Guangxi-based Yanjin Shop Food, which mainly manufactures and sells snack foods containing nuts, tropical fruits and marine products, for its year-on-year profit growth (up 102.3%). 

The service also highlighted three other companies: Sichuan-based Teway Food Group, which manufactures hot pot ingredients (for the home-based cooking of tabletop hot pot recipes), seasonings and condiments; Shandong-based Delisi Food, which processes and sells meat products; and Shanghai-based dairy-maker Milkground (each exceeding 70% year-on-year profit growth).

Even as China pursued its Zero-Covid policy and implemented sporadic lockdowns, the packaged food industry still attracted investment. Multinational cheese maker Bel snapped up 70% of Chinese cheesemaker Shandong Junjun Cheese Co. Bubs Australia entered into a venture for infant-formula production in China, while Thai Union Group set out plans to invest in China’s pet food market. Major south-east Asian dairy group Vinamilk invested in its domestic production in part to help support exports to China.

Research by GlobalData suggests there was a dip in deal-making in China last year, but some observers believe that the country’s packaged food sector may be headed into a period of consolidation, as the shift away from Zero-Covid could cause issues along the supply chain and upend consumer demand patterns. In general, the overall situation may benefit the larger players who have better funding to weather a disjointed consumer market over the next one to two quarters and with a better distribution ability.

In the meantime, the green food sector in China also experienced significant growth. Green food is defined as food that is sourced from high-quality environments and produced using specific techniques with strict production quality process control, rendering these products safe for human consumption. 

For example, innovations in technology have sparked a plant-based food renaissance. In China, the plant-based meat industry is projected to be a $13 billion industry in 2023. And with long-term plans to reduce meat consumption by 50% this year, China is becoming a key target for businesses looking to expand or enter the plant-based food industry.

Studies have shown that transitioning to a plant-based diet can reduce carbon footprint by up to 73%. Moreover, China’s growing middle class have the expendable income to make more health-conscious purchasing decisions.

What policies and regulations should brands be aware of?

In the past decade, Chinese consumers have been increasingly focusing on the safety and quality of food products, especially after a few highly publicised cases of adulterated products. Since 1 March 2023, the only regulation in China that specifically addresses the general requirements for manufacturing and selling food-related products (including food-contact materials and articles) has come into effect.

China’s State Administration for Market Regulation (SAMR) released the Interim Measures for the Supervision and Administration of the Quality and Safety of Food-Related Products (“Interim Measures”) developed from a draft version that was published on 31 July 2020 for comment. Compared with the overarching Food Safety Law (FSL), the Interim Measures refine some requirements targeted at food-related products but are not significantly different from the existing laws and regulations or current practice. 

Although the Chinese government has developed more stringent regulatory measures, serious incidents have been recorded in the past, including unsanitary conditions in factories and contamination of food products by pathogenic microorganisms, pesticides and heavy metals. The most famous case was contaminated baby formula, which resulted in the death of six infants and over 50,000 hospitalisations.

For this reason, the Interim Measures list a series of prohibited food-related products, such as products that use raw materials and additives not conforming to food safety standards, as well as other substances that may endanger human health or use additives beyond the scope or limitation.

The list includes products that have been ordered by the government to be prohibited/phased out from the market, products that forge the origin or forge or falsely use another’s factory name, address, etc. and any other products that do not conform to laws, regulations and food safety standards.

In recent years, China has also tightened its management of plastic pollution and has banned the production of certain plastic items, such as ultra-thin plastic shopping bags with a thickness of less than 0.025 mm. Industry players will need to pay closer attention to the development of industrial policies that will affect the supply of food-contact plastic products, since more restrictive policies are expected in the future.

Basic quality control requirements in the whole production process of food-related products are included as well. These requirements are principles and do not exceed what is expected for production quality management of food-related products. 

Food products must have “identification information” (e.g., name, production date, shelf life, type, category, precautions and warnings) which does not necessarily refer to “labelling” information. In this respect, the Chinese GB (“Guo Biao”, Chinese for “National Standard”) food packaging standards are more specific. For example, GB 4806.1-2016, the General Safety Standard, regards the information on the label, the instruction manual, or the declaration of compliance all as product identification information, and therefore allows the identification information to be provided on the label, in the instruction manual, or in accompanying documentation. Fines will be imposed on food manufacturers and operators who violate these rules.

Companies must obtain a Food Production License to engage in food production in China. The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) is responsible for the nationwide administration of food production licensing, while local Quality and Technical Supervision Bureaus (QTSBs) are responsible for administrating the scheme within their respective administrative regions. 

In terms of requirements, the enterprise must possess the means for processing the specified type and volume of food products and must maintain the cleanliness of facilities. All staff involved in food service must undergo China Food and Drug Administration (CFDA)-approved safety training, and a system must be in place for ensuring food product safety, including the prevention of cross-contamination. These requirements also apply to Food Distribution and Catering Licenses.

Applicants for a Food Production License should additionally set up a health inspection and inspection records system or other health management systems for their personnel, establish a goods purchasing and pre-delivery inspection records system, and other food safety management systems for basic food ingredient inspections and manufacturing processes. 

Site inspection by two to four inspectors will be conducted at the food production venue, and a product sample inspection will be required. Food Production Licenses are valid for three years, and applications for renewal should be submitted six months prior to expiry.

China Consumer 2023

This article was produced as part of a series for China Consumer 2023.

Learn more about CBBC’s flagship consumer event of 2023 here.

The post Practical guide to China’s food and drink market appeared first on Focus - China Britain Business Council.

A crisis in food confidence began in China in 2008, when melamine was found in locally produced baby formula, sickening over 300,000 infants, and causing the death of three. Since then, many other food safety scandals have been recorded in the country.

More recently, a “double standards” scandal erupted when it was found that the soy sauce sold by food company Haitian outside of China had fewer additives and preservatives than its domestic counterpart.

In response to these scandals, in July 2022, the National Health Commission (NHC) announced the issuance of 36 new National Food Safety Standards and three revised National Food Safety Standards. This is the first batch of national food safety standards issued by the NHC since September 2021.

Food advertising has also been impacted by these new regulatory measures, with authorities coming down particularly harshly on campaigns and ads endorsing products that claim therapeutic effects. Heavy fines have been issued against food companies that claimed false information on their labels or called their products “organic” without obtaining the proper authorisation from the Certification and Accreditation Administration (CAA). Therefore companies marketing food products in China should avoid any misleading or false content in their campaigns.

According to Chinese Advertising and Consumer Laws, an advertisement is deemed false if it deceives or misleads consumers with incorrect or confusing content, such as if the product does not exist, the information is inconsistent with reality, if scientific or statistical information is false or cannot be verified, or any other circumstances in which the consumers are deceived or misled by false content.

The penalty for campaigns deemed false could be valued at three-to-five times the advertising fees, or, if the advertising fees cannot be calculated or are significantly low, a fine of RMB 200,000 (£23,787) to RMB 1 million (£119,000). If illegal activities have been committed more than three times within two years or there are other serious circumstances, the advertiser may incur a fine of five-to-ten times the advertising fees, or a fine of RMB 1-2 million, and the business licenses may be revoked.

National symbols are taken seriously in China and cannot be used in advertising of food products. The law states that an advertisement may not use any form of the national flag, the national anthem or the national emblem, or the army flag, anthem, or emblem; or use the names or images of state organs or their functionaries. For example, a coffee brand was fined for using the phrase “Same as the Prime Minister’s Coffee” and hanging the photo of a state leader at its stores.

The use of minors under the age of ten as advertisement endorsers is also prohibited in China. In 2018, a2 Milk engaged Chinese actress Hu Ke and her son, who was younger than ten at that time, as endorsers for their milk powder on their official website and social media accounts. As a result, the company was fined RMB 100,000 (around £11,900) by the Shanghai Administration for Market Regulation (AMR).

Another important rule to follow is not to claim disease prevention or therapeutic effects of food products. In May 2022, actress Jing Tian claimed, as an endorser of a fruit and vegetable pressed candy, that the candy could prevent the absorption of sugar, oil and fat in the body. As a result, she was fined RMB 7.22 million (almost £860,000) and banned from being an endorser for three years. The manufacturer of the candy was also penalised, and its products were removed from major e-commerce platforms.

Regular food advertisements are not permitted to claim therapeutic effects or use medical language or language that easily causes confusion between the products promoted and pharmaceuticals or medical devices.

Manufacturers of baby formula and other milk products are not allowed to claim full or partial substitution for breast milk. In 2022, Yashili published advertisements claiming that its products are “the most like breast milk” and purchased search engine optimisation services to list its product at the top of search results. Yashili was fined RMB 200,000 (£23,800) by the Huangpu Branch of the Guangzhou AMR.

Healthcare food or food formulated for special medical purposes must have official approval before appearing in published advertisements. In 2020, Abbott published a short video for its product PediaSure, which is formulated for special medical purposes, before obtaining approval, and was fined RMB 1.94 million.

Advertisements for healthcare food, medicine, medical treatment, or medical devices are also not allowed to use endorsers to make endorsements or testimonials.

More and more multinational corporations in the food industry from the United States and Europe are increasing their stake in China, as they believe in the massive market potential of the country. However, these companies should make sure that they are well-informed of the possible risks regarding false or misleading advertising and the relevant legislation regulating the sector.

Entering China is a key decision for businesses of all sizes. Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can provide you with the platform to unlock your potential.

The post In China, get your food ads right … or pay the price appeared first on Focus - China Britain Business Council.

Since the outbreak of COVID-19, Chinese consumers have experienced drastic changes in the way they purchase and prepare food. With the spread of the virus being gradually contained in provinces outside Hubei, some of these temporary phenomena will disappear, but some will remain – and have long-term effects on the industry.

The boom in fresh produce e-commerce

Even before the outbreak of COVID-19, the popularity of wet markets in China had been declining. It is ever more difficult to find these markets in the centre of Chinese cities, and the visitors are mostly older people with the luxury of time. The virus outbreak has just dealt another blow to the offline retail market, and especially wet markets.

Authorities have banned the sale of wild animals and it is expected that stricter hygiene regulations will be imposed on markets around the country. As well as new regulations, consumer confidence in wet markets will be at an all-time low.

Online shopping for groceries has a relatively low penetration rate in China – around 3.8 percent in 2018, compared to 7.1 percent in Japan or 8.3 percent in South Korea. The lock-down has forced many residents – even older consumers – to familiarise themselves with e-commerce apps that sell fresh produce. At the time of writing, visiting offline supermarkets isn’t safe. E-commerce platforms including Miss Fresh, 100me, JD’s express home delivery, and apps developed by large retail groups have observed booms. Miss Fresh has allegedly achieved over 300 percent of its normal Chinese New Year sales in this period.

A rise in self-service supermarkets

At the end of February, a number of self-service mini-marts appeared at the entrance to residential compounds in major cities across China. Fresh fruit and vegetables were available for purchase from sealed cupboards. The food is filled up overnight by distributors (some possibly via autonomous vehicles) and customers than help themselves to the produce, paying via WeChat Pay. No human contact needed. Expect self-service supermarkets to take off in the near future.

Hot meals preferred

A belief that the COVID-19 virus can be killed in high temperatures has led to a current preference for hot meals over cold dishes. This might have an impact on ready-prepared food or food items that are meant to be eaten cold, including salads, some sandwiches etc. The catering sector, as other sectors that require in person gatherings, suffer the greatest impact from the virus outbreak. Home deliveries will continue to be popular in the near and mid term future.

The post How the virus will affect China’s food and drink sector appeared first on Focus - China Britain Business Council.

When the first case of African Swine Fever (ASF) was reported in China fifteen months ago, its devastating impact on the global meat sector and the ripple effect on trade were unimaginable.

What began as a few cases of a rare and fatal pig virus at the Russian border has become a national emergency, labelled by the World Organisation for Animal Health as “the biggest threat of our generation to commercial livestock.”

The incurable virus, deadly to pigs but harmless to people, has spread to all of China’s 26 provinces resulting in the death of almost half of its pig population, either directly or through mass culls that have been both ordered by the authorities and undertaken voluntarily by desperate and fearful farmers.

In just a short time, ASF has dealt a heavy blow that has left the industry convulsing. China’s pig herd has collapsed by 40 percent while its year on year pork prices had risen by 70 percent in September, according to the National Bureau of Statistics.

For Chinese farmers, the impact has been devastating. Backyard small-holdings with poor bio-security protection and little means to buffer against the shocks have been hit hardest, resulting in a loss of livelihood for thousands of communities. Beijing has tried to alleviate economic suffering by forcing state banks to step in and issue credit to affected farmers but this has been met with resistance. Travel bans, shutting down food markets and other responses have all failed to stop the spread.

The fate of China’s pigs has become a concern for people everywhere. Markets are waking up to the trade and economic implications — before ASF, China supplied half the world’s pig trade. Dwindling pork stocks have squeezed the global supply of meat dramatically. In Europe, soaring meat price inflation is driving up the cost of ham in Spain, Germany and Poland.

This has led to an uptick in beef and chicken supplies as farmers rush to fill the protein gap. But this will not make up for the loss in herd numbers. While production could stabilise by the end of next year it could take more than a decade for the disease to be fully under control, say experts.

Markets are waking up to the trade and economic implications — before African Swine Flu, China supplied half the world’s pig trade

“It’s the worst supply shock that China has ever suffered due to a disease,” says China consumer analyst Ernan Cui at Gavekal Dragonomics. “Supply has been falling faster than many people expected with the trend forecast to worsen. Pork prices are the highest they have ever been.”

Chinese officials calculate the pork shortfall to be 10 million tonnes whilst some independent analysts put the figure closer to 18 million. Meanwhile, pork prices are currently over 50RMB per kg wholesale. Before the outbreak, the average was 20RMB per kg. “Breaking 30 is very rare,” says Cui.  

But not everyone is losing amid the soaring prices. Many provinces have been left with no choice but to import meat. Beijing has imposed a 72 per cent tariff on US pork in retaliation to President Trump’s trade war, allowing Brazil and Europe to make hay while the sun shines. Beijing has doubled the number of beef plants that have permits to sell directly to the mainland with imports expected to rise even further next year, according to Brazilian meat trade groups.

Meanwhile, Spain has increased the value of its sales to China by 90 percent (to £378 million) in the first six months of 2019, according to Interporc. It is also a boon for South American growers of soy and grain, used to making pig feed. But bad news for the planet as Brazil’s right-wing president Jair Bolsonaro ploughs on with controversial plans to open vast tracts of the Amazon to agricultural interests.

ASF is also threatening to become a political hot potato for China’s government. Ahead of the fanfare of the 70th anniversary of the People’s Republic of China on October 1, Hu Chunhua, Chinese Vice Premier and member of the Politburo told top officials that increasing pork production is a “major political task” for the Party. But reports that the government has suppressed information about the spread of the virus have raised questions about the effectiveness of its response.

Steps have been taken to try and rebuild the shattered industry, such as introducing the “green passage policy” – toll-free travel for certain categories of livestock; and generous subsidies for companies to build new infrastructure.

Meanwhile, some environmentalists even see this as an opportunity for China to embrace non-meat alternatives. But without a way of stopping the virus it is hard to see how China can continue to bring home the bacon.

The post Swine flu has caused a major impact to the world’s pig trade and opportunities for British farmers appeared first on Focus - China Britain Business Council.

Retail in China, like much of the rest of the world, has been steadily moving online, and food retail is no exception with big players such as JD.com, Alibaba and Taobao now selling food. This has had an impact on traditional bricks and mortar food retail stores and a number of British food retailers who entered the Chinese market have recently scaled back their operations in China or withdrawn completely.

Marks and Spencer pulled out of China last year after just under a decade in the country. They started off gingerly in Shanghai, opening in some questionable locations and failed to localise effectively. Their difficulties with logistics and supply chain meant that they struggled to get perishable food on shelves before sell by dates, and they admitted that they suffered from a lack of brand awareness. Tesco’s also withdrew from the market, also having struggled to compete with local competitors, and other brands such as Waitrose have been more cautiously selling in to China only via the Royal Mail store on e-commerce site T-Mall.

Too many foreign food companies try to put China under one bracket when in actual fact location, weather, and lifestyle all affect shopping habits

To localise or not to localise, that is the question

For a long time, brands were encouraged to localise when entering the Chinese market, to cater for pre-existing Chinese tastes and ideas. British supermarket chain Tesco possibly localised too much though by providing a shopping experience that offered little more than what shoppers already had available. Trying to compete with local prices was a challenge and they didn’t set themselves apart as an international food provider.

Mark Tanner, of retail consultancy China Skinny explains that localisation is important but that understanding the diversity of the Chinese market is just as essential. He uses milk as an example. “Foreign brands think they should bring in 1 litre tetra packs of milk but the Chinese don’t drink in such volumes and think it’s no longer fresh once opened, so smaller 250 ml or 400 ml servings are preferred,” he says. Likewise, while foreign players provide plain white milk, domestic companies provide “milk for the elderly for joint care, milk for gym-goers, milk as brain food – Chinese consumers want milk that is catering to them and not for everyone.”

With local wet markets and food stalls on the decline as bigger Chinese stores such as Vangard and Lianhua take over, some foreign partners are still in the mix, though this is often in partnership with local companies. Of the top ten grocery stores in China, seven have partnerships with Tencent or Alibaba.

Mum’s gone to China

One British company dipping its toes in the market is Iceland. The frozen food company has had a distributor in China since 2015, whilst more recently they opened a JD.com store, using China’s cross-border e-commerce channel to launch more products. “We are in the brand building stage, people are getting to know the Iceland brand and learn the products that we have,” says Daniel Tweedale, International Business Support Manager of Iceland. “We aim to establish ourselves in the mind of the Chinese consumer so they think of Iceland as a really good British retailer that supplies quality.” For companies who want to try out the market without going in guns blazing, a cross-border e-commerce channel like JD.com allows companies to experiment at relatively low risk. “It was a way to relatively quickly get the Iceland brand and products into China,” explains David Hampstead, CEO of Samarkand Global – a company specialising in getting e-commerce in to China who worked with Iceland.

Hampstead continues by explaining that the type of products selected for sale in China are based on Chinese food habits. “The lower distribution of ovens and microwaves compared to the UK means the ready meal concept is still a few years out but other things, like deserts and frozen treats may be a good first entry to sort out distribution channels.”

Nevertheless, Hampstead and Tweedale emphasise that JD.com is only part of their strategy, partnerships with retailers, supermarkets and distributors are also key, whilst Tanner emphasises that without marketing your brand and products, cross-border sales will still be minimal.

Whilst the process of accessing the China market might feel lengthy, the potential rewards are still huge

Keeping up with the regulations

Mette Knudsen, CEO of certification and regulation advisory, Knudsen&Co, agrees that the cross-border channel alone would only offer companies a fraction of the potential market. With Knudsen’s work mainly focussed on the pharmaceutical, cosmetic and food sectors, she thinks that cross-border trade can only open up around 15 percent of the potential market in China.

“A lot of companies simply don’t understand what they are doing so we assist them, especially within compliance,” she says. The risks of getting compliance, packaging or advertising wrong can not only include big fines but also the potential to get banned from the market, so it is key to get that part right, she says.

Whilst the process of accessing the China market might feel lengthy, the potential rewards are still huge. As an example, she explains that “getting sports nutrition into China is not complicated. It is fairly easy to get the right labelling and paperwork but I think there is a myth around that it is super complicated.” She also says that she doesn’t think companies realise how much of a health revolution is going on in China and brands haven’t paid much attention to this trend.

New trends

There has been a boom in personal healthcare and associated health food products

And healthy living is certainly a new trend. Knudsen points out that 20 years ago it was almost impossible to find a gym. Today there is a new fitness studio opening on every corner. China is now becoming the most health-conscious consumer market in the world. “They are becoming increasingly picky about what they buy and in China they shop for the health benefits.”

Health foods, diet drinks, vitamins and supplements for fitness are booming in China. “I’m not sure why more foreign companies are not more active in this area,” she says. With the government launching a major health awareness campaign, Healthy China 2030, a shift in attitudes is noticeable. “Ten years ago people were craving the [Western] lifestyle but weren’t aware of obesity and diabetes because it was not there. Since 2015 there has been a lot of public awareness that people need to lead healthier lives though.”

Any business looking to make the move into the Chinese food market will need to pay close attention to local trends such as these, whilst maximising the strengths that come with being an international brand. Whilst previously the advice may have been to focus on localisation, Chinese citizens, especially the young, are becoming more and more global in their mindset. Success stories will need an intelligent mix of vision and local knowledge and on the ground expertise.

“Unlike the UK, the Chinese retail market is incredibly fragmented and the retail competition for its domination and the likes of Chinese consumers will be fierce,” explains CBBC’s food retail sector lead Antoaneta Becker. “While not among the first to enter and expand, UK retailers can still reap rewards from the market. The mix of tradition and innovative approaches the UK excels in, has proven to be a great magnet for Chinese consumers across income and generation groups.”

For more information on the food retail sector contact CBBC’s sector lead Antoaneta Becker on Antoaneta.Becker@cbbc.org.

The post Technical advancement and changes in habits will transform China’s food market appeared first on Focus - China Britain Business Council.