Mark Tanner
Mark Tanner
24 June 2020 0 Comments

In the midst of the biggest economic crisis that the world has faced since the Great Depression, Chinese consumers have again demonstrated how much they love to spend when there is a deal to be had. During the 18-days of the 618 shopping festival, consumers spent over a trillion RMB in gross merchandise value (GMV) across China’s ecommerce platforms. JD clocked 34% growth on last year’s event at ¥269.2 billion ($38 billion). Alibaba – who didn’t publish their sales in 2019 – had nothing to hide this year with a healthy ¥698.2 billion ($98.7 billion) – two and a half times what they shifted in the 11 days of their Singles’ Day record last November.

The sales data provides some interesting observations for anyone who was wondering how lockdown trends would evolve as everything returns to normal. The habit of buying groceries online looks like it will be a long-lasting shift with the fastest growing category on JD being fresh food, reinforced by the 500% growth for JD Super.

Similarly, consumers appear to be continuing to spend more time at home. This is evident based on their investments into making their homes a nicer place, with kitchenware the third-fastest growing category. To complement their shiny new utensils, appliances and dishes, they’re also enjoying the finer things in life at home, seen by the 250% growth in imported wine sales, pulled up by the top end of the market, with Penfolds, Moutai and Dassai sake up five-fold from last year.

While many food and beverage exporters are likely to be revelling in the growth, a good few meat and seafood exporters have less reason to rejoice in the short term. As a sign of how hysteria and ill-logic around COVID-19 can reappear any time, we only need to look at what happened last weekend when the Beijing outbreak was linked to Norwegian salmon. The World Health Organisation and the UN’s Food and Agricultural Organisation have both stated that there is no evidence of food or food packaging being association with the transmission of COVID-19. As salmon have gills and not lungs, the respiratory disease cannot infect the fish.

Yet even after official Chinese officials and media absolved the fish of blame, salmon remained absent from supermarkets and restaurants across China. If that wasn’t bad enough, the distress expanded beyond the pinky-orange fish to imported meat in general. It wasn’t just from concerned consumers, but Chinese customs too. Some ports began requiring coronavirus tests for all imported meat and seafood containers to prevent contamination, causing clearance delays. To add to the paranoia, Tyson chicken imports have been suspended following an outbreak among workers in their Arkansas factory.

Although the paranoia around imported meat is likely to only be a short-term blip for most consumers, Beijing plant-based meat startup Zhenmeat executed a well-timed launch of their faux ‘fried pork tenderloin’ and ‘crayfish meat’. Plant-based meat has been generating a lot of buzz of late in China, but there are mixed views about their popularity with consumers, with KFC’s Beyond Meat’s limited edition vege burgers receiving a lukewarm response at best. On the other hand, sales of plant-based milk on Alibaba platforms grew 320% during the 618 festival.

On the whole, retail sales China’s food and beverage category looks as robust as ever, particularly online. Foreign acquisitions of Chinese brands in the category are one of the drivers for foreign investments into China surpassing China’s outbound investments this year – the first time in a decade. In addition to these positive signals, we are anticipating more unexpected blips and further shifts in behaviour while the shadow of COVID-19 looms – be prepared to adapt! China Skinny can help you identify where, why and how. Contact us to find out more.

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