Mark Tanner

What Food Exporters to China Commonly Overlook

2016/10/26 Mark Tanner
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Imported food and beverage is big business in China.  While Chinese consumers may be buying more locally-made goods overall, foreign fare is one of the shining segments for exporters around the world.  Chinese shoppers are trading up, adopting more international tastes and continue to worry about the health and safety of locally-produced provisions.

Nearly every year since 1990 China’s imports have seen steady growth. Bucking the trend are 2009 and last year, where total imports contracted 14% on the back of lower demand for natural resources. However, China Customs data puts 2015 food imports at 15% growth outside of dairy. Tanking global dairy prices dragged down imported food and beverage growth which sat at just over 7% for the year. The big movers were categories like vegetables, cakes and desserts, which all grew in the high 30s.

Yet with such great opportunities, we see many exporters getting the basics wrong.

These days, most brands know not to treat China as one homogenous market.  This is particularly relevant in the food category, where taste preferences and eating habits can vary wildly between regions.  However many China product strategies still have the same product offering and positioning across the China market.

Although targeting specific cities or clusters of cities is popular to launch food products, too many brands fail to factor in those regions’ unique traits. A common mistake is to do taste and concept testing with Chinese immigrants in a brand’s home country. These migrants have often developed local preferences and come from different cities than where brands are launching their products.

Another regular misstep is the ‘one-size-fits-all’ approach to sales channels. A product in a smaller premium supermarket will sometimes have quite different packaging size requirements to a super-store like Walmart or Carrefour.

It is also common to align one’s ecommerce and bricks & mortar strategy identically.  On the theme of packaging, what is bought online can be quite different to physical retail channels. The look of the packaging is often notably different. Whereas customers in brick & mortar stores value transparent packaging so they can inspect the quality of items, it is much less relevant online, with an item’s ability to stand out on a page full of products of the most importance.

Food is one example where localising can ensure a brand makes the most of the opportunities China offers, but it’s valid across most categories.  A small investment in understanding the market early on will usually pay for itself many times over.  China Skinny can assist with that. Go to Page 2 to see this week’s China news and highlights.

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