Imported food grows against the market downturn In recent years, China's FMCG market has been declining severely. Shopping scale and per capita shopping frequency best reflect this trend. In 2011, China's per capita shopping frequency was about 92%, but by 2015, this figure had dropped to 81%. In just a few years, total FMCG traffic decreased by 1.3 billion person-times. The decline in shopping frequency will continue to challenge retailers and brands in the near term.
Market Space Facing the overall downturn, the rapid growth of imported food has given many businesses a glimmer of hope. According to customs statistics, in December 2015, China's imported food import value was $5.28 billion (about 337.2 billion RMB), a month-on-month increase of 23.9% and a year-on-year increase of 12.4%. From January to December 2015, China's imported food value was $54.8 billion (about 350 billion RMB), a year-on-year increase of 6.6%. Two years later, it is expected to reach 480 billion RMB. This data indirectly shows that China is becoming the world's largest consumer of imported goods.
The "2015 China Shopper Report" shows that in FMCG categories, imported products' market share in infant formula, chocolate, and color cosmetics has exceeded 30%, and the average annual compound growth rate of sales in these categories is around 25%. This data fully reflects the rapid development trend of imported food.
Unique Advantages of Imported Food The rapid development of imported food is inseparable from the policy support of the Chinese government, which provides more convenience for imported food businesses in their FMCG operations. In addition, the unique advantages of imported food itself are the biggest reason for its standout performance in market competition.
64% of successful brands operate in a wide product range!
According to Kantar Worldpanel research, 64% of successful brands are in the low/mid/high price segments, and the penetration rate of imported food is increasing year by year. Many products positioned as mid-to-high-end see significant sales growth once the reason and value of their higher price are recognized by the market.
Channel Positioning
The highest growth rate is in second- and third-tier cities
Where do imported products perform well in terms of regions and city tiers? The following research shows: households in key cities, provincial capitals, and prefecture-level cities are still the main buyers of imported food, accounting for over 80% of consumption.
According to data monitoring, the growth rate in second- and third-tier cities (prefecture-level cities) is the highest, reaching 34%, while the growth rate in provincial capitals is only 20%, and in Beijing, Shanghai, Guangzhou, and Chengdu it is only 10%. This fully demonstrates that the imported food market in first-tier cities is relatively mature, while second- and third-tier cities have much more room for education and growth.
Multiple channels drive together!
The above data charts show:
- In 2015, online shopping and convenience store channels grew the fastest, with growth rates of 36.9% and 13.1% respectively, making them channel stars.
- Hypermarkets and gift-giving remain the most important consumption channels for FMCG. Especially the gift channel, whose share should not be underestimated.
According to Kantar Worldpanel research, 74% of households have received FMCG gifts, with Spring Festival being the most important holiday for Chinese people; during Spring Festival, the proportion of households receiving FMCG gifts is as high as 60%. On average, each household receives gifts worth about 2,164 yuan annually, and during Spring Festival, the average value is about 888 yuan.
The above are statistics for major channels in China's FMCG industry over the past three years, which are highly relevant to the imported food industry.
From the perspective of consumption seasons, imported food shows obvious holiday characteristics, with Spring Festival and National Day contributing nearly 40% of its annual sales. This fully confirms an old saying in the retail industry: "Those who win Spring Festival and National Day win the world." Data shows that in 2014, across all channels for imported food, the gift-giving channel accounted for 32% of the total amount, with annual sales growth of 16%. Currently, imported food has become a popular choice for consumers to give as gifts. Therefore, businesses need to deeply understand consumers' needs for gift consumption, including category, packaging form, and size.
Category Characteristics
Niche categories are increasingly accepted
From the chart, it can be seen that imported food categories with higher growth include: packaged water, cheese, frozen food, oyster sauce, curry, salad dressing, butter, jam, and other imported products.
Chinese consumers are increasingly influenced by Western lifestyles. Therefore, beverages with regional characteristics such as coffee, oatmeal, and yuzu tea, as well as Western condiments with strong regional colors such as coconut milk, ketchup, and curry paste, are growing rapidly. This also reflects the rapid "Westernization" of catering from another perspective.
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