China Country Profile

Market Overview:

Euromonitor reports that slightly lower rates of growth are expected in China in 2017. China’s economy continues to slow as Beijing makes the transition from an export-led economy to one driven by consumption. Real Gross Domestic Product (GDP) increased by 6.7%, and 6.4% is forecast for 2017. Private consumption continues to shore up the economy. Private investment is weakening but this is partially offset by an increase in investment among state-sponsored companies. A surging real estate sector also helps to offset a slump in other areas such as exports. Corporate debt is high. Rates of growth in real GDP will fall to about 5.5% per year by 2021.

The real value of private final consumption rose by 7% in 2016. In 2017, growth of 6.9% is expected. The millennial phenomenon could soon dominate China’s middle-class. Home ownership was negligible in 2000 but has soared to more than 80% today, spurred by rising incomes and rapid credit expansion. House prices in major cities rose by a third in 2016. To cool the real estate market, many cities have imposed home purchase restrictions and higher mortgage down payments. Approximately 70% of all bank loans are now backed by real estate collateral.

Structural changes in China’s economy are gradually dividing companies into two distinct groups. The old industrial base made up of firms focused on energy, materials and most manufacturers. Alongside this group is the “new economy” propelled by technology, the internet and the consumer choices of millions of young, upwardly mobile consumers – most of them born since 1980. This group tends to be tech-savvy, environmentally aware and health conscious and their purchases drive the “new economy” which includes firms in sectors such as consumer, healthcare and information technology. While the performance of the “old economy” will continue to be dragged down because of the size of the overcapacity issues it faces, firms in the “new economy” will flourish and become increasingly profitable.

With 80% of the working age population already employed, there is limited room for gains in employment to make a significant contribution to growth. Labor constraints could even worsen in the longer run; according to the World Bank, China’s working age population will fall more than 10% by 2040 in spite of a recent relaxation of its one child policy. This means that much of any future increase in Chinese output will have to come from greater productivity – a process that is slow and arduous. Although China has enjoyed a productivity boom due to massive investment, that will be hard to sustain as rising living standards drive up domestic demand for consumer goods.

It is clear China’s increased wealth had led to an increase in consumption of imported food and agricultural products. 2016 exports of U.S. agricultural products rose 6% to US$21.4 billion as the country regained its top rank as a destination.

In 2016, U.S. exports of consumer oriented food products to China increased 14% to nearly US$2.2 billion. China remains the 6th largest market for consumer ready food products from the U.S. China also remains the 5th largest market for the export of U.S. processed foods, totaling US$1.7 billion in 2016, an increase of 6% from the prior year. Top processed food products exported to China in 2016 included processed/prepared dairy products, prepared/preserved seafood, food preparations, prepared/preserved meats, processed fruit, vegetables and pulses, snack foods, beer and wine and fats and oils.  

USDA’s Agricultural Trade Office, ATO, in Shenyang, hereinafter referred to as “Post” reports that exports of U.S. products are expected to remain steady in 2017 as demand for consumer-oriented goods will continue to grow. Imported food demand in China remains supported by growing urban populations, rising disposable incomes, an innate thirst for foreign luxuries, and a continuing public outcry for improved food safety.

Consumers are demanding and willing to pay more for fresher, more nutritious and convenient products. Consumers, shopping malls, and high-end hotels are looking to enjoy or provide new food experiences, such as food festivals, exotic locales, and elaborate presentations. Consumers in their 30s and 40s are now looking to enjoy red wine with their evening meal. Drinking red wine is increasingly viewed as upscale compared to beer and as a healthier alternative to traditional Chinese spirits. Younger consumers are increasingly visiting coffee shops, cafes, and western-style pubs. Pubs offering draft beers and microbrews are becoming very popular. The college set is also willing to pay as much US$10 to enjoy a latte and a slice of cake or Asian style ice cream served with fruit, tapioca pearls and sweetened beans. Once a rarity, such shops can be found with ease in just about any city in China.

Post (ATO Shanghai) reports that China is comprised of overlapping markets separated by geography, culture, cuisine, demographics and dialects. Though there is no single formula for success in China, it is essential to identify the best cutting points. While China’s retail business environment is changing fast, it is smart to be adaptable. In short, if you’re interested in the China market, you need to be prepared to invest resources (time, promotion/education funds, etc.) and to be prepared for difficulties. If you’re committed and allow yourself to adapt, the China market can be a great opportunity.

Retail Sector:

According to Euromonitor, retail sales in the packaged food market in China had been estimated to reach US$226.3 billion in 2016. That represents a growth rate of 29.5% or US$51.5 billion since 2012.  The forecast for growth in this market is outstanding. By the year 2021, the retail sales in the packaged food market in China is expected to reach nearly US$309.6 billion, a growth rate of 30.1% or US$71.5 billion. High growth categories in the forecast include soup, baby food, sauces dressings and condiments, breakfast cereals, savory snacks, dairy products, baked goods and processed fruit and vegetables.  

National Perspective:
Post reports that China’s retail sector offers great opportunity for U.S. food and food product exporters. However, there remains to be many challenges in reaching and selling U.S. food products in the retail sector. Demand for imported food and beverage is expected to remain resilient. Consumers in China perceive imported products to be safe and of high quality. The major drivers of China’s retail growth include rapid urbanization and an increase in the number of middle class consumers. China’s consumers expect their food purchases to be easy and convenient. As a result, electronic commerce (e-Commerce) has become an important tool for businesses in the retail sector to use and to adapt to in order to reach their customers.

China’s retail sector is the primary method in which U.S. exporters and food producers can reach consumers in China. Rapid urbanization and a growing middle class are driving China’s retail sales to record levels. As a result of globalization and development, China’s younger populations have become accustomed to imported food products being available at retail stores in major cities (i.e., first-tier cities). In 2015, the total retail sales of consumer goods reached US$4.49 trillion, up 10.7% from 2014. In the same year, food consumption, as an average across all demographics, accounted for 31% of the China’s annual urban household expenditures.

Many different business models within the retail industry have emerged recently. Small sized convenience stores and specialty stores remain to be the most prominent retail model. Though, in recent years, large retailers are taking market share as they are able to realize greater efficiencies through better supply chains and wider distribution channels. Furthermore, the industry has undergone many mergers and acquisitions (M&A) which has only strengthened the large retailers’ position in the market. Large retailers have the resources to source directly from domestic and international suppliers thereby allowing them to realize greater profits and have more control over the quality and authenticity of their products.

High quality and premium priced food products, including imported food and beverage, are expected to continue their success in first-tier (e.g., Shanghai, Beijing) cities. Retailers are now focusing on imported food sales in second- and third-tier cities (Nanjing, Chengdu). While there is great opportunity throughout China, U.S. exporters face difficulties. High import tariffs, regulations, and expensive shipping costs (in terms of time and money, relative to competition) are the main hurdles.

There are different segments to the Chinese retail food consumers. Foreign nationals living in China that are seeking products they are familiar with are willing to pay premium prices. More chain retailers (e.g., BHG, Ole) are starting to target these consumers. Small local specialty retailers (e.g., Jenny Lou’s, City Super, and Corner’s Deli) also have success in attracting foreign nationals. Affluent Chinese consumers are seeking high quality products that portray an image of status. High end retail chains (e.g., Sam’s Club, Taste, Great, Treat) cater to these buyers, and tend to focus on products with special health claims. Labeling and brand image are important to these consumers.

Middle-class Chinese consumers seek the same high quality and safe products the affluent and foreign national consumers do but are willing to seek out the best value. These consumers tend to be somewhat price-sensitive and will compare several brands before they make a final purchase decision. On average, this target group is looking for food products that are fresh, easy-to-prepare, and consistent. Companies that offer value-added services and great customer service seem to do well with this group of consumers. China’s younger generation has become more knowledgeable about imported food products. This group of consumers will still purchase in the many wet markets around China but at a much lower frequency rate in comparison to past generations. Younger consumers now purchase through hypermarkets, supermarkets, and online. Healthy eating is important as is convenience. Many will buy through online or mobile shopping applications (e.g., We-chat and the Ali-pay).

In general, traditional retailers are currently undergoing a transition to include an online component to their business. The era of traditional standalone retail stores is being phased out in China. Offline (no online offering) food retailers include hypermarkets, supermarkets, specialty stores, discount stores, community stores and conveniences stores. Online food retailers, such as or, are retailers that provide food products online and deliver the items to the consumer.

There are many advantages online retailers have over the traditional offline retailer. Online retailers are able to scale quickly because they are not dependent on obtaining real-estate in areas with high foot traffic, which are generally expensive areas to rent. Rather, online retailers buy warehouses outside of the city center and have the food delivered to the consumer’s destination. Another advantage for online retailers is their ability to adjust to trends quickly. Online retailers analyze the data they obtain from the consumer and then tailor their offerings.

Best Prospects:
Post reports that popular products with a strong presence in the market include: tree nuts and dried fruit (prunes, raisins); seafood (especially live seafood, including lobster and geoduck); pork, vegetables (especially sweet corn); infant formula; dairy products (cheese and butter); baking ingredients and bread bases; cereals; fresh fruit (oranges, apples, especially cherries); premium ice cream; wine and spirits.

Regional Overview:

South China: Post’s (ATO Guangzhou’s) South China regional coverage includes the provinces of Guangdong, Fujian, Hunan, Guangxi and Hainan. The area has a population of 271 million, an estimated per capita GDP of US$8,500 and currently accounts for roughly 32% of China’s consumer oriented food and beverage imports (according to Chinese Customs data). As the primary manufacturing hub of the country, the relatively affluent region has a dynamic economy, containing two 1st tier cities (Guangzhou and Shenzhen) and several rapidly expanding 2nd and 3rd tier city markets (e.g. Dongguan, Zhuhai, Xiamen, etc.). Similar to other regions of China, substantial infrastructure investment has resulted in major logistics improvements and brought the region closer together. Additionally, with ongoing upgrades in high-speed rail between Guangzhou and Hong Kong, travel times to other major international trading hubs are quickly diminishing.

South China has made significant progress in cold storage management over the past several years. Furthermore, recent government subsidies have supported new investment in the cold chain throughout the region. Meanwhile, South China’s wholesale markets continue to upgrade and expand their facilities. Hypermarkets and supermarkets are the primary outlets for purchasing imported consumer oriented food and beverage (F&B) products in South China and several major retail chains are headquartered in the region, including Wal-Mart China, China Resources Vanguard, Yonghui Supermarkets and AEON China. More and more 2nd and 3rd tier South China cities now host leading the domestic and international retail chains which frequently offer a broad range of imported products on their shelves. Sales of imported F&B products via online shopping platforms are also becoming an important component of the South China market and many analysts agree e-commerce in the region will play an increasingly important role in the future.

In addition to the giant online shopping platforms such as,,, and, specialized on-line platforms such as and (also focusing on fresh fruit) are gaining significant market share in South China retail sales. More and more high-end specialty stores for fresh fruits, frozen meat and seafood are opening in the 1st tier cities of Guangzhou and Shenzhen. Due to rapid urbanization in the region, some major retailers are shifting their strategic focus from the saturated 1st tier city markets to emerging 2nd and 3rd tier city markets. Cross-border duty free warehouses and global direct sourcing are new concepts that are gaining traction with major retailers. According to retail contacts in the region, in-demand U.S. F&B products include breakfast cereals, baking ingredients, snacks, fresh & dried fruits, condiments, frozen meat, seafood, nuts, dairy products and craft beer.

North China: Post (ATO Beijing) reports that key international hypermarket operators in China are all established in Beijing such as Carrefour, Walmart, Jusco, Ito-Yokado, RT-Mart and Metro. Beijing’s retail market is near saturation, and increasingly it is difficult to find store locations downtown given rising property and rental prices. The retail industry has slowed along with the real Chinese economy. In 2015, retail business growth rates dropped 8.6% and 7.3% in 2014. Due to poor performance and continued losses, Ito-Yokado closed two stores and Parkson one store in Beijing during 2016.

Convenience stores developed rapidly in Beijing market in 2016 given changing lifestyles, rising rents, and strong and growing demand for take-out food. “Our hour’s” brand took the leading position over 7-11 in 2016, opening over 100 new stores in 2015. “Our Hour” currently operates over 300 stores in Beijing. 7-11 is not far behind, operating over 250 stores in Beijing and recently adding more than 40 new stores in 2015. The next largest convenience store player, Family Mart, lags behind Our Hour’s and 7-11. Family Mart opened 15 new stores in Beijing in 2015.

Compared with struggling traditional retail, e-commerce continued to develop rapidly in Beijing. In 2015 total retail consumer goods sales reached over US$150 billion in Beijing with e-commerce trade contributing more than 20% in excess of US$30 billion. Beijing consumers enjoy the convenience offered by e-commerce players. and Miss Fresh offer two-hour express delivery in downtown areas.

East China: Post (ATO Shanghai) reports that East China is well known for its retail sector, with strengths in e-Commerce, convenience store outlets, specialty stores, supermarkets, and wholesale markets. The region, as covered by ATO Shanghai, includes one municipality and five provinces along the Yangtze River (Shanghai, Jiangsu Province, Zhejiang Province, Anhui Province, Jiangxi Province and Hubei Province). The region is the business center of China. As such, there have been large investments in developing the region’s food distribution and food storage capabilities in order to supply the region’s 323 million people.

As home to a large number of supermarkets, hypermarkets, specialty stores, and an extremely strong convenience store sector, Shanghai’s retail sector has become increasingly saturated. Supermarkets remain the dominant retail format. According to 2016 China Import Food Report published by CBNweekly, the main categories of import food products in Shanghai are snacks, dairy products, beverages, health food supplement, condiments and coffee/tea.

The Shanghai Pilot Free Trade Zone (FTZ) was established on September 29, 2013 and has carried out institutional reform and innovation in the areas of investment, foreign trade, finance and post-filing supervision to form a legal framework for investment and trade within the zone.  Direct Import Group (D.I.G.) is an import products outlet established inside the Shanghai Pilot Free Trade Zone. D.I.G. has opened 13 outlets in Shanghai and more are coming in other moderately developed cities in the region.  The D.I.G Group works closely with more than 20,000 food importers.

Southwest China: Post (ATO Chengdu) reports that the Southwest region consists of Sichuan, Yunnan, and Guizhou Provinces, the Chongqing Municipality, and the Tibet Autonomous Region. Southwest consumers choose to spend a large portion of their disposable incomes on food and beverages, putting regional consumption in this category above the national average. Consumer preferences for imported foodstuffs are similar to those in other parts of China. Imported products, especially those from developed countries, provide consumers with assurances of safety and quality as well as the sense of an elevated lifestyle.

Southwest China’s major urban centers (ranked in order of importance) are Chengdu, Chongqing, Kunming, and Guiyang, all of which are considered second-tier cities and offer reasonable access to imported retail foodstuffs. These cities also serve as distribution hubs for imported products in their respective provinces.

Chengdu is the wealthiest and most advanced city in Southwest China. It is also a key part of the Chinese Government’s “New Silk Road” plan aimed at resurrecting traditional trade routes over water and land. It forms one of the transportation hubs on the land route between China and Europe. Chinese President Xi Jinping announced a fund of US$40 billion in November 2014, which is designated for investment in businesses contributing to this initiative. In Chengdu, city planners have focused on becoming China’s largest western transport and logistic hub. As an emerging city market in China’s heartland, it is a prime target for U.S. agricultural exports. Furthermore, Chengdu’s inland, emerging status means the city has less import penetration than more developed port cities. Therefore, new imports face comparatively less foreign competition. Chengdu residents are also very open-minded and have the propensity to try new foods. They are willing to pay a premium for high-quality, reliable, and safe food products.

Upscale department stores and supermarkets, as well as certain hypermarket chains, offer the highest concentrations of imported products in Chengdu. Upscale department stores in the city include ItoYokado, Isetan, Renhe Spring, and Wang Fu Jing. High-end supermarkets include Ole’. Greenland opened its first supermarket “G-super” in November 2016. Hypermarket chains Carrefour and Metro also offer a good selection of imported goods. Other hypermarkets and supermarkets such as Wal-Mart, Beijing Hualian Group (BHG) have considerably less selection. Convenience stores are developing rapidly in Chengdu and may offer a future outlet for imported products.  

Northeast China: Post (ATO Shenyang) reports that Northeast China, called Dongbei in Chinese, includes the three provinces of Liaoning, Jilin and Heilongjiang. The three provincial capitals are Shenyang, Changchun and Harbin. Each provincial capital is home to seven to ten million residents. Dongbei is home to 110 million people and has 30 more cities with populations of over a million people each. Northeast China has a land area of 780,000 square kilometers and is roughly the size of Pakistan. The port city of Dalian, the wealthiest city in northeast China, has five million people and boasts a per capita income of over $14,000 in 2015.

In Northeast China, independent department stores used to be the major retail channel for most items, including apparel, footwear and snack foods. Nowadays, modern shopping malls have replaced them, dominating the retail market with more entertainment choices such as high-end and fast food restaurants, pubs, movie theaters, Karaoke bars, and places for children to have fun. Starting ten years ago, malls have also become home to supermarkets and hypermarkets. Many major multinational retailers have set up stores in Northeast China, including Wal-Mart, Carrefour and Metro. Carrefour was the first to establish operations in Northeast China in 1999. Huarun, China’s leading domestic conglomerate has also set up more supermarkets in Dongbei. Taiwan-based RT Mart is also a major player in the northeast China retail market and has deployed 34 stores in major and secondary cities throughout Northeast China.

Food Service Sector:

Euromonitor reports that overall consumer food service in China saw impressive current value growth in 2015, indicating recovery from sluggish performance in the review period (2010-2015). The high-end food service market stabilized after the sharp decline caused by the strong influence of the strict anti-corruption campaign during 2013 and 2014 while mass consumption registered robust value growth thanks to rising disposable incomes and growing interest in gourmet food especially among the young generation.

During the review period many consumer foodservice operators focused more on higher-tier cities with strong consumption power. However, the growing homogenization, aligned with the increasingly intensified competition gradually made it difficult for players to survive. In addition, the continuous rise in operating costs especially rental and labor costs, together with the booming “online to offline” (O2O) battle, further squeezed the profit space for operators in higher-tier areas. Moreover, many conservative operators were unable to satisfy the rapidly changing demands of consumers in higher-tier areas particularly young adults seeking new culinary experiences.

In contrast, the government has been making efforts to develop lower-tier areas, which offer huge potential for business. Many new department stores and shopping centers are opening up in these areas to exploit consumers’ changing lifestyles and desire for convenience. As a result, the huge potential demand, relatively lower competition, lower operating costs and rising consumption power successfully attracted many consumer food service players, especially the leading chains, to penetrate the booming lower-tier cities. For example, McDonald’s planned to open 250 new stores in China in 2016 and focus its expansion on lower-tier cities as the fast food category gradually recovers from issues involving Chinese suppliers in 2014.  

Facing a wider range of choice in terms of cuisine, location, price and service, consumers are becoming less loyal to a single brand and are actively looking for interesting and new dining options. For example, authentic cuisine from South Korea gained popularity over the review period due to the influence of K-Pop and Korean TV dramas, significantly affecting cafés and Asian full-service restaurants in China. Special dining experiences such as dining in celebrity-owned restaurants also created a buzz among Chinese foodies. These restaurants could easily draw consumers’ attention relying on the personal influence of the celebrities either through the public media or their large fan bases. With rising awareness of health and wellness, many consumers started to be concerned about the high fat, sugar and salt levels in consumer food service offerings, with many of these consumers subsequently opting for special restaurants such as vegetarian restaurants.

A multi-brand strategy has been increasingly employed by consumer food service operators in China during the review period and continued to gain popularity in 2015 as it supports players targeting more segmented consumers as well as catering to consumers’ changing demands. In view of the increasingly fierce competition in consumer food service in China, more operators adjusted their strategies accordingly, with a multi-brand strategy serving as an effective measure by enhancing their product portfolio and widening their marketing positioning.

In 2015, consumers were faced with new styles of dining and new models of purchasing in consumer food service. Thus, O2O recorded robust growth in consumer food service in China, jointly boosted by consumers’ changing demands and leading players’ continuous efforts, such as enhanced services and attractive discounts. More and more chained and independent restaurants engaged in O2O to allow online ordering through their websites or relied on third party platforms although there are still many traditionally-minded restaurateurs who do not see the value of expanding beyond their comfort zone.

Driven by the rocketing use of smartphones across China for e-commerce thus connecting online and offline services as well as the massive discount-based promotions offered by service providers to lure users, mobile became the key buzzword in consumer food service in 2015. For example, third party delivery platform,, took millions of orders in 2015, with mobile sales accounting for over 75% of the total. On the other hand, many restaurants, particularly fast food chained operators such as KFC and McDonald’s, accepted Alipay and WeChat payments at their cash registers to offer greater convenience. McDonald’s also unveiled self-service kiosks in some of its outlets that allow customers to complete their orders by themselves via the touch-screen machines in order to save time.

Best Prospects:
Interviews with HRI food service professionals repeatedly confirm that U.S. food exporters should select top quality products for export to China. U.S. foods benefit from expectations of high quality, attractive appearance, convenient package and food safety. On the other hand, it is difficult for most U.S. food products to compete with Chinese domestic products on price, particularly for those foods in demand by the HRI market. Instead, suppliers should consider targeting niche as well as regional markets with top-quality products that are unique, healthy, and nutritious.

The secondary stage of processing such goods, for example, sliced meats, prepared chicken, etc., has had a huge impact on HRI sector sales. Also, ready-to-use and value-added products are increasingly in demand, as well as ready-made, pre-cooked and portion-controlled sauces, soups, pizzas, vegetables, fish fillets, meat and meat products, and frozen dough.

Food-Processing Sector:

Post reports that although China’s economy has rapidly expanded over the past three decades to become the world’s second largest economy in 2010, growth rates have slowed recently. 2016 GDP annual growth was at only 6.7%, the lowest level since 1990. This slowing expansion has taken a toll on many industries, including the food processing and manufacturing sector which experienced overall revenue growth of only 4% in 2015 (compared to 8% in 2014). According to analysts, the food processing sector is also undergoing a period of consolidation where regionalized businesses are increasingly losing market share to larger food processing companies that have better access to investment capital and modern technology.

Despite slowing revenue growth and consolidation, a number of national trends are supporting the sector as a whole, including the continued rise of disposable incomes, urbanization, and growing consumer demand for convenient, high-quality processed food options. As a result, imported food ingredients are increasingly in demand by domestic processors. As more and more of the Chinese population of 1.3 billion flocks to urban areas where consumers require packaged foods, the country’s food processing industry is likely to continue expanding for the next several years.

In order to improve food safety after a series of scandals rocked the industry in recent years, Chinese regulators have recently implemented stricter policies for food companies. An example of this was in 2013 when regulators reviewed all baby formula manufacturers in the country and reissued production permits to those who passed a revised examination. The number of baby formula manufacturers shrank over the next three years from over 600 to 103 by 2016. This action supported increased imports of food ingredients because the larger, more modern enterprises that could adhere to stricter safety policies tended to more frequently utilize high-quality imported ingredients.

Urbanization, a key driving force: China’s rural population has been rapidly declining relative to its urban population since the 1980s and this urbanization has helped transform the country into the world’s second largest economy. 2011 was a symbolic year as it marked the first time China’s city dwellers outnumbered its rural residents. In 2015, the Chinese urban population reached 56%, a tremendous change from the 48% level of 2009. Moving to the cities has allowed the population access to a far greater range of products (especially processed products) and has also resulted in a shift away from staple food consumption. This dramatic change in living environment has caused the traditional preference for fresh food and wet markets to give way to a preference for more convenient foods and supermarkets, which has had profound implications for China’s demand for processed foods.

Most processed food products and beverages are distributed through hypermarkets/ supermarkets and convenience stores. Major international retail giants (AEON, ParkNshop, TASTE, RT-Mart, Metro, Carrefour, Wal-Mart, and Lotus) are present in most of China’s 1st, 2nd and even 3rd-tier cities. Chinese nationwide and regional retail chains have also continued to grow and develop. Convenience stores such as Kedi, 7-11, OK Mart and Family Mart have emerged as a strong platform targeting the younger generation with ready-to-eat meals, packaged snack foods and beverages.

E-commerce has also become an important channel for packaged foods and beverages with online retail sales in 2015 reaching US$183 billion and accounting for 18% of total traditional retail sales. Major platforms, such as T-mall, and, generate over 80% of the total online sales in China.

Laborers across the country are demanding higher pay, better working conditions and better benefits. The new generation of small-town, migrant workers do not want to relocate to coastal cities but would rather find employment closer to home. As a result, many factories are now being built in underdeveloped inland China. The rising labor costs and shortages have caused some of the larger manufacturers to reduce their footprint and a great number of small plants to shut down. Many large-scale Chinese food processors are actively looking for acquisitions overseas in order to gain direct access to high-quality raw materials. Some leading Chinese dairy companies have also started manufacturing their own branded products in plants overseas, catering to consumers’ stronger confidence in imported dairy products.

Multiple large processors, manufacturers and e-commerce platforms are now motivated to directly source products from exporting countries to reduce costs. According to market analysts, several major hypermarkets and supermarkets in first-tier cities are currently directly sourcing up to 30% of their fresh fruit from outside the country. By doing so, retailers are able to both enhance traceability of the products purchased and reduce costs by 20%-30%. Some large e-commerce platforms are also directly sourcing products (especially fresh fruit) from outside of China.

Best Product Prospects:

Post advises that generally speaking, prospects of products are determined by a couple of factors. A combination of product uniqueness, comparative price advantage, thriving degree of sub food sector, and marketing efforts are the most decisive ones and would largely determine if a product would have a good prospect in China. Based on those assumptions, almonds, walnuts (including black variety), and meats (pork) and by products, poultry and by products, surimi and seafood wastes, starch, fruits and wheat flour fit into the matrix.

In general, China is a huge market and demands all kinds of food ingredients. Products either not produced domestically in China or enjoying a potential price advantage are more than welcome and opportunities can appear at any time. Products that are declining in production in China while the demand is increasing is also of high potential, as well as those in which price gaps are narrowing between the U.S. and China based on cost advantages. 


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