CC BY
28Alekseeva Elizaveta*
Changing of Food Demand in the People's Republic of China
The People's Republic of China's health and the functional food market began to form during the 1980s. On the one hand, the key issue was a growing environmental problem; on the other hand, there was a need for food for specific health purposes, such as providing the human body with macro and micronutrients, supporting health and wellness1.
The market boomed after a series of food safety scandals, which made Chinese consumers pay more attention to import health and functional food. In general, Chinese consumers consider import food safer and healthier for consumption. At least 86% of consumers begin to pay special attention to the quality of food, first of all, Chinese avoid artificial additives, and a quarter of consumers is ready to pay more for products that did not artificial ingredients at all, and almost 30% of consumers prefer buying organic products2.
Nowadays, Chinese consumers spend 40% -45% of the food budget on organic food, in conjunction with 90% in Europe3. Today one of the promising ways for trade with China is premium segment health food supplying, to illustrate this suggestion, food import to China has increased at least by 20% for past five years. The domestic health food market that includes organic food, health food and functional food, is growing rapidly, the market size was about 200 million USD in 20094, in 2012 the sales reached 280 billion yuan, in 2013 the average annual sales amounted to 500 billion yuan5, the market size has reached 1 trillion USD in 20166, the relevant literature suggests that by 2018 Chinese market is going to be the largest market for imported health food7. The market growth key role in increasing level of health awareness and rise in living standards8.
* Alekseeva Elizaveta. Oriental University, Moscow
1 China's Health Food Market. [Электронный ресурс] // HRTDC Reeasrch. URL: http://china-trade-research.hktdc.com/business-news/article/China-Consumer-Market/China-s-Health-Food-Market/ccm/ en/1/1X3AYEP5/1X002L54.htm (Дата обращения 19 апреля 2017)
2 Focus on New Food Habits and Consumption in China. [Электронный ресурс] // Gentlemen Marketing Agency. URL: http://marketingtochina.com/new-food-trends-chinese-consumers/ (Дата обращения 20 апреля 2017)
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4 Organic Food Products in China: Market Overview. (Technical paper). // International Trade Centre (ITC).: - 2011.
5 Фу Ж. Исследование рынка продуктов здорового питания Китая [Текст] / Ж. Фу, А. А. Напалкова // Инновационные технологии в науке и образовании: материалы IV Междунар. науч.-практ. конф. (Чебоксары, 18 дек. 2015 г.) / редкол.: О. Н. Широков [и др.]. - Чебоксары: ЦНС «Интерактив плюс», 2015. - № 4 (4). - С. 449-455. - ISSN2413-3981.
6 China's Health Food Market. [Электронный ресурс] // HRTDC Reeasrch. URL: http://china-trade-research.hktdc.com/business-news/article/China-Consumer-Market/China-s-Health-Food-Market/ccm/ en/1/1X3AYEP5/1X002L54.htm (Дата обращения 19 апреля 2017)
7 Бизнес с Китаем: [Электронный ресурс.] // VectorExpo. URL: http://vectorexpo.ru/files/kp_2017_bez_cen. pdf (Дата обращения: 05 мая 2017)
8 Marianna Cerini. How China Is Becoming The World's Largest Market For Healthy Eating. [Электронный
Growth potential in Chinese health food market creates plenty of opportunities for new foreign players, Chinese organic agriculture and Chinese food industry9.
Changing of food habits in China
The Analysis of Chana's food demand by Australian Department of Agriculture, Fisheries and Forestry forecasts10 suggests that Chinese food pyramid is gradually approaching the Western diet. The consumption of beef, dairy products, vegetables and fruits is increasing, while the consumption of root crops and tubers is decreasing.
Chinese consumers believe that Western health diet includes salt and fat consumption control, macro and micronutrients consumption control, eating a lot of dairy products, fresh vegetables and fruits11, is the best way to encourage the healthy, balanced lifestyle.
Chinese health food's key requirement is to strengthen the immune system, blood sugar control, maintaining beauty. The Chinese population is becoming ageing population12, functional food and health foods for the elderly become one of the mainstream of Chinese market.
Key factors of choice of healthy foods are following:
Food safety
Not fewer than 85%13 of Chinese consumers pay attention to food safety. Growth in household incomes and rise in living standards also strange this trend.
Health food
Chinese consumers more and more encourage the Western healthy lifestyle. The most attractive niches are following:
• No food supplements
• Organic ingredients
• Low-calorie food
• Weight loss food
ресурс] // Forbes. URL: https://www.forbes.com/sites/mariannacerini/2016/03/31/how-china-is-becoming-the-worlds-largest-market-for-healthy-eating/#4e5c42985439 (Дата обращения 11 апреля 2017)
9 China's Health Food Market. [Электронный ресурс] // HRTDC Reeasrch. URL: http://china-trade-research.hktdc.com/business-news/article/China-Consumer-Market/China-s-Health-Food-Market/ccm/ en/1/1X3AYEP5/1X002L54.htm (Дата обращения 19 апреля 2017)
10 Patrick Hamshere, Yu Sheng, Brian Moir, Faraz Syed and Caroline Gunning-Trant. What China wants Analysis of China's food demand to 2050. // Research by the Australian Bureau of Agricultural and Resource Economics and Sciences.
11 Рациональное питание: [Электронный ресурс.] // ГАУЗ СО «Свердловский областной центр медицинской профилактики». URL: http://www.medprofural.ru/Racionalnoe-pitanie (Дата обращения 11 мая 2017).
12 China's Health Food Market. [Электронный ресурс] // HRTDC Reeasrch. URL: http://china-trade-research.hktdc.com/business-news/article/China-Consumer-Market/China-s-Health-Food-Market/ccm/ en/1/1X3AYEP5/1X002L54.htm (Дата обращения 19 апреля 2017)
13 Focus on New Food Habits and Consumption in China. [Электронный ресурс] // Gentlemen Marketing Agency. URL: http://marketingtochina.com/new-food-trends-chinese-consumers/ (Дата обращения 20 апреля 2017)
Organic food
More than 30% of consumers in cities of the 1st and 2nd row accept higher prices for organic food.
Information
A significant number of people pay attention to the packaging of the product. 88% of consumers check the production date, the expiry date. 67% of consumers also look at the ingredients and nutritional information.
Imported food
More than 80% of consumers regularly buy imported food, first of all, baby food.
International food and traditional food
At least 53% of Chinese consumers are ready to try traditional food and more than 80% of consumers enjoy eating international food.
Sports drink and food
Sport is becoming more and more popular in China; sports drinks are becoming popular as well.
The main segments of Chinese health food market
Organic food
Organic food is becoming more popular in China due to food safety aspect. Organic food is also popular with lead eco-friendly lives group of consumers.
Organic food prices are much higher than the average prices. Comparison of average prices for food14 and average prices for organic food is presented in Table 1.
Table 1
Comparison of average prices for food and average prices for organic food
Item Unit Non-organic Organic Deviation
Fruits 331,8
Apples Kg 12 55 458,3
Bananas Kg 11,2 23 205,4
Grain products 407,1
Rise Kg 6,3 25 396,8
Wheat flour (high-gluten) Kg 6,3 28 444,4
14 Национальное бюро статистики КНР. [Электронный ресурс] // Национальное бюро статистики КНР. URL: http://data.stats.gov.cn/english/swf.htm?m=turnto&id=139 (Дата обращения 7 мая 2017)
Item Unit Non-organic Organic Deviation
Wheat flour Kg 5 19 380,0
Soy products 781,3
Tofu Kg 4,8 37,5 781,3
Edible oils 440,2
Peanut l 27 192 711,1
Soy l 10 32,8 328,0
Rapeseed l 14 39,4 281,4
Meat and meat products 299,9
Pork Kg 28 92 328,6
Bacon Kg 29,5 90 305,1
Beef Kg 66,9 178 266,1
Fowl 620,8
Chicken Kg 21,5 131,1 609,8
Chicken (breast) Kg 19,5 86,7 444,6
Duck Kg 17,7 143 807,9
Eggs 400,0
Chicken eggs Kg 7,6 30,4 400,0
Свежие овощи 736,9
Napa cabbage Kg 2,6 28,7 1103,8
Celery Kg 4,9 28,5 581,6
Cucumbers Kg 5,5 55 1000,0
Tomato Kg 7,1 60 845,1
Green bean Kg 10,9 28 256,9
Potato Kg 8,2 52 634,1
Sources: The National Bureau of Statistics of the People's Republic of China, Epermarket, City Shop, Lee's Mum.
The organic food's prices can exceed the similar non-organic food in 3-7 times, organic soy products' deviation is the largest, as soy products are considered one of the most well-being product.
The most popular organic food in China (both imported food and produced in China):
• Grain Rice, various legumes and pulses, peanuts, wheat, buckwheat, corn, etc.
• Beans Mung bean, kidney bean, etc.
• Vegetable oil Soybean, canola, flax, sunflower seeds, pumpkin seeds, etc.
• Vegetables All kinds of leafy vegetables, tuberous root vegetables, tuberous plant vegetables, fruit vegetables, garlic, ginger, bamboo shoots (mostly wild harvest), mushrooms (both from cultivation and wild harvest), etc.
• Fruits Apples, pears, strawberries, blueberries, peaches, jujube, grapes, etc.
• Tea Green tea, black tea, herbal tea, Puer Tea, Wuloon Tea, etc.
• Textiles Cotton, silk, flax, etc.
• Medicinal herbs Ginseng, various Chinese medicinal herbs (both from cultivation and wild harvest), etc.
• Livestock Meat, eggs and dairy products, etc.
• Aquaculture Fish, shrimp, crab, etc.
• Processed foods Frozen vegetables, dried fruits, can vegetables and fruits, etc.
The origin of organic products is of less importance then guarantee of its safety in China.
Health food and functional food
According to the Chinese classifications, there are three groups of health food: Traditional health food: This refers to products which are prepared using traditional Chinese methods based on the concept of regulation and balance in traditional Chinese medicine.
Modern health food: This refers to health products, which use nutrients or supplements as major ingredients.
Functional health food: These products include those used for specific health purposes, such as nourishing the heart and the liver, improving sleep or facilitating digestion.
The Nielsen's Global Health & Wellness Survey suggests that the major factors of choice health foods in China are15:
1. No artificial colours - 49% of respondents;
2. No GMO - 49%;
3. No artificial flavours - 48%;
4. Only natural ingredients - 45%;
5. High content of vegetables and fruits - 36%;
6. Organic ingredients - 39%.
The most important nutritional information is16:
1. Low salt content - 36%
2. Low cholesterol content - 35%
3. High fibre - 32% of respondents;
4. High protein - 31%;
5. Low sugar - 29%
6. Whole-grain - 28%;
7. Locally produced - 28%;
15 Sue Feng. Growing Chinese Health Awareness Could Mean Big Business for Manufacturers. [Электронный ресурс] // Nielsen. URL: http://www.nielsen.com/cn/en/press-room/2015/GROWING-CHINESE-HEALTH-AWARENESS-COULD-MEAN-BIG-BUSINESS-FOR-MANUFACTURERS-en.html (Дата обращения 2 мая 2017)
16 Ibid.
Food with probiotic is also very popular. Last years, more and more Chinese consumers are looking for natural and non-medicinal ways to maintain their health, and food with probiotic become the most popular solution.
On the basis of our data, we would assume that the Western diet has a bigger influence on Chinese consumers than traditional Chinese dietology, and it is true for consumers, who have just begun to keep to the healthy lifestyle rules. Traditional Chinese Medicine (TCM) still has a strong influence on the Chinese consumer, it is popular with consumers of all age groups and is particularly popular with the educated persons, who have experience with Western medicine and Western diet. This group is fully aware of side effects of the Western medicine, which was exactly why they prefer TCM in general and Chinese diet in particular. More than 55% of consumers (large cities) and 35% of consumers (small towns) take into account the recommendations of TCM when choosing health food. The others prefer Western medicine and diet17.
The main groups of consumers
The main health food consumers are mainly live in Beijing, Shanghai, Guangdong and other economically developed regions. There are higher consumption level and fuller awareness of health food18.
Health food is quite expensive compared to usual food, and a large part of the population remains sensitive to the price of food, from this point of view, the major consumers are people with high incomes. As regards young people, western lifestyle also has an influence on food choice.
According to motivation and consumption behaviour, it is possible to divide health food consumers in China into the following groups19:
White collar families
40% of total sales. The group is interested in both health aspect and ecological problems.
Customers with young children
This group has a market share of about 10%. They buy health food for their children, and as a baby is growing up, their consumption is dropping down.
17 Capturing a Share of China's Consumer Health Market. [Электронный ресурс] // BCG Perspectives. URL: https://www.bcgperspectives.com/content/articles/center_consumer_customer_insight_globalization_ insight_action_capturing_share_chinas_consumer_health_market/?chapter=2#chapter2 (Дата обращения 02 мая 2017)
18 Фу Ж. Исследование рынка продуктов здорового питания Китая [Текст] / Ж. Фу, А. А. Напалкова // Инновационные технологии в науке и образовании: материалы IV Междунар. науч.-практ. конф. (Чебоксары, 18 дек. 2015 г.) / редкол.: О. Н. Широков [и др.]. - Чебоксары: ЦНС «Интерактив плюс», 2015. - № 4 (4). - С. 449-455. - ISSN2413-3981.
19 Organic Food Products in China: Market Overview. (Technical paper). // International Trade Centre (ITC).: - 2011.
Customers with health issues
About 10% of the total sales. The major health problems are high levels of blood pressure, cholesterol or blood sugar, or heart disease. These people are looking for ways to strengthen health.
Overseas returnees
About 5% of sales. They were exposed to western lifestyles. It is likely this group is the most rapidly expanding.
Customers from Chinese Taipei and Hong Kong (China)
About 5% of the market share. This group is concerned about recent food scandals in China and they are looking for food safety guarantees.
Government officials
About 10% of the market share. They receive various bonuses or benefits, some government offices have introduced organic food as a bonus for their employees.
Young people
This group is estimated at about 3% of sales. They have been exposed to new ideas and concepts, including healthy and environmentally friendly lifestyles. They are likely to buy from direct sales, especially from producers.
Foreigners living in China
Comprising around 7% of the market, they shop from speciality shops, supermarkets, and direct sales. This group of consumers is mainly from Europe, North America, Japan and the Republic of Korea.
The above 8 groups account for about 90% of the organic market. The other 10% is made by HoReCa.
Living standards increase leads to the growth of premium food segment. The main groups of premium food are20:
• Western delicacies: caviar, truffles, expensive cheeses
• Chinese delicacies: swallow nests, mushtuce mushrooms, fermented eggs
• Health food, which prices can exceed the average prices from three to seven times.
Despite the Programme for Food and Nutrition Development in China (2014-2020), with aimed to meet growing domestic demand through national production, there are groups of imported food that are always popular in China, they are21:
• Delicacies
• Baby food
20 China's Health Food Market. [Электронный ресурс] // HRTDC Reeasrch. URL: http://china-trade-research.hktdc.com/business-news/article/China-Consumer-Market/China-s-Health-Food-Market/ccm/ en/1/1X3AYEP5/1X002L54.htm (Дата обращения 19 апреля 2017)
21 Organic Food Products in China: Market Overview. (Technical paper). // International Trade Centre (ITC).: - 2011.
• Dairy
• Fresh tropical fruits
• Dried fruits
• Nuts
• Spices
• Cereals
• Honey
• Coffee, etc.
There is a group of products that will be in demand in China, regardless of the domestic supply, for example, products that are specific to the growing conditions, uniqueness at the expense of the region of production (national delicacies) or a long harvest period (cocoa plantation). Given the changes in consumer behavior, in China such categories of products will be used over time with increasing popularity, and their health benefits or organic origin will be a significant plus for both producers and consumers. Such goods include:
• Delicacies
• Baby food
• Dairy
• Fresh tropical fruits
• Dried fruits
• Nuts
• Spices
• Cereals
• Honey
• Coffee, etc.
Companies, which plans to work in the Chinese health food market can take into consideration the following recommendations:
• First, focus on value-added products (delicacies, baby food, dairy products).
• Second, support the development of the brand according to a unique product (a unique place of production, delicacy, etc.).
• Third, obtain organic certificates.
• Fourth, develop a premium brand (packaging, information support, price, etc.).
• Fifth, direct cooperation with specialized stores, specialized online stores and large supermarkets.
