China Insights

Chinese consumers’ demand drives up imported food sales

Jason Yu

Greater China General Manager

Shoppers 15.04.2015 / 17:09

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Chinese consumers’ strong demand for imported foods drove the sector to grow 14% in sales last year, much higher than FMCG’s 5.4% lukewarm performance.

Once considered a rare luxury by many Chinese people, now imported food has been tried by most of Chinese families, as Kantar Worldpanel data showed that in 2014, 86.7% of Chinese urban families have bought imported food at least once - an increase of 2.1 percentage points.

The more important factor which fuelled this sector's strong growth is that Chinese consumers were buying more - they bought more at each shopping (+4.7%) and bought more frequently (+7.2%) to reach 8.6 times per year. As a result, the total consumption volume jumped by 18% from a year ago. It is a stark contrast to the overall trend of FMCG growth in China, which was mostly supported the rise of the goods' prices.

Surprisingly, this trend is happening across all Chinese city-tiers: the biggest sales increases came from third-tier cities (region-level) and fourth-tier cities (county-level). The momentum is now lost in tier-one and tier-two (provincial capitals) cities as the growth rate both dropped to 11% in 2014 from 17% and 20% in 2013 respectively.

Though "gift" (note) still is bigger than any other channels at 32.2%, "overseas purchasing" and "online shopping" are two fastest rising channels for people to buy imported foods. It also explained that why 40% of imported foods are bought during Spring Festival and National Day holidays.

From a category perspective, still remembering repeated milk-related food safety scandals, Chinese shoppers much preferred imported milk powder and forked out 20.92 billion yuan on it to make it the biggest category in 2014. It was followed by snacks (14.52 billion yuan) and nutritious foods (14.05 billion yuan).

Though overall imported food has reached a very high penetration level, there are many categories' growth can be driven by persuading more consumers to try out.

Imported Liquid Milk

Imported liquid milk, for example, had a staggering sales growth of 43.6% in 2014 to reach 2.42 billion yuan. The most important factor behind its growth is a 2.7 percentage point increase in its penetration rate. In other words, with 2.7% more Chinese urban families tried out imported liquid milk, its market size jumped by about 1 billion yuan. Considering that its penetration rate was only 13%, this sector has much potential to growth further.


Note: If a consumer was buying something as a gift for other people, this purchasing will be excluded from the monitoring database of Kantar Worldpanel.



Source: Kantar Worldpanel

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