Page 274 - 2018 White Paper on the Business Environment in China
P. 274
8 White Paper on the Business Environment in China
2.8 Consumer Goods
Background can rely on some big wins in China’s food and drinks
sector, especially as a rising middle class wants more
People born in the 1980s, 1990s, and the and more foreign foodstuffs on its plates (ITE). China’s
first decade of this century—a 1.4 billion people are building up an appetite that is
segment known in China as the “young generation” as changing the way the world grows and sells food. The
opposed to the “last generation,” consumers who were Chinese diet is becoming more like that of the average
born in the 1950s, 1960s, and 1970s—are poised to American, opening up markets across the globe for
become the dominant force in the consumer market. everything from bacon to bananas. China’s efforts to buy
Consumption by young-generation Chinese consumers or lease agricultural land in developing nations show that
is growing at a 14 percent annual rate—twice the building farms and ranches abroad won’t be enough.
pace of consumers older than 35. The share of total Ballooning populations in Asia, Africa and South America
consumption by the young generation is projected to will add another 2 billion people within a generation and
increase from 45 percent to 53 percent by 2020. Most they too will need more food (Niu et al.).
Chinese older than 35 have lived through periods of
instability and have experienced challenging economic Yu Lu, Vice President of the China Chamber of
circumstances. Young-generation Chinese also tend to Commerce of Foodstuffs and Native Produce Association
be more sophisticated consumers. They are eight times said that the compound growth rate of China’s food
more likely to be college graduates, travel overseas import from 2007 to 2016 stood at 13.9 percent. In 2016,
twice as much, and are more brand-conscious than China’s food imports value stood at $55.48 billion, an
older Chinese and U.S. consumers of the same age. increase of 1.2 percent on the previous year. In the first
On average, the Chinese consumers aged 18 to 35 half of 2017, China’s food import reached $29.38 billion,
surveyed by the World Economic Forum were aware of up 8.3 percent from the previous year. The top ten
20 skin-care brands while U.S. consumers in the same food exporters to China include the U.S., New Zealand,
age range were aware of only 14. Also, 49 percent of Australia, Indonesia and among others. The total export
young-generation Chinese said that they advocate for value to China accounts for 63.6 percent of total food
brands, either personally or online, compared with 34 import to China (Wang, Compound).
percent of their U.S. counterparts. Young Chinese also
have a greater emotional connection with brands. A Roughly 22 percent of China’s monumental population
top priority of 18- to 25-year-old Chinese consumers is set to join the middle class by 2022. Its 109 million
buying skin care products is that the brands should current members already outnumber those in the United
“fit their personality” and convey that they are “young States. Wages have risen 400 percent in China since 2000.
and energetic.” First-time buyers of certain goods in Chinese consumers are now eating more dairy products,
emerging markets trust well-known international eggs, meat and seafood than ever before. Take seafood
brands more than domestic ones. As consumers gain as an example. Consumption of this product group will
experience and become more knowledgeable about reach 35.9 kilograms per person by 2020, with some
products, they explore alternatives (Kuo). regions already exceeding 40 kilograms each (Niu et al.).
Food China only holds 20 acres of arable land per 100
people. And, according to official news source Xinhua,
People need to eat, and Chinese domestic production more than 40 percent of this land has degraded since 2014
levels cannot keep up with demand. As such, China has (ITE). Furthermore, the breakneck pace of the country’s
no option but to rely on food imports, leading to nearly development brought some nasty side effects. Factories
half a trillion dollars in imports each year. Exporters swallowed tracts of prime land. Fields were polluted
274
2.8 Consumer Goods
Background can rely on some big wins in China’s food and drinks
sector, especially as a rising middle class wants more
People born in the 1980s, 1990s, and the and more foreign foodstuffs on its plates (ITE). China’s
first decade of this century—a 1.4 billion people are building up an appetite that is
segment known in China as the “young generation” as changing the way the world grows and sells food. The
opposed to the “last generation,” consumers who were Chinese diet is becoming more like that of the average
born in the 1950s, 1960s, and 1970s—are poised to American, opening up markets across the globe for
become the dominant force in the consumer market. everything from bacon to bananas. China’s efforts to buy
Consumption by young-generation Chinese consumers or lease agricultural land in developing nations show that
is growing at a 14 percent annual rate—twice the building farms and ranches abroad won’t be enough.
pace of consumers older than 35. The share of total Ballooning populations in Asia, Africa and South America
consumption by the young generation is projected to will add another 2 billion people within a generation and
increase from 45 percent to 53 percent by 2020. Most they too will need more food (Niu et al.).
Chinese older than 35 have lived through periods of
instability and have experienced challenging economic Yu Lu, Vice President of the China Chamber of
circumstances. Young-generation Chinese also tend to Commerce of Foodstuffs and Native Produce Association
be more sophisticated consumers. They are eight times said that the compound growth rate of China’s food
more likely to be college graduates, travel overseas import from 2007 to 2016 stood at 13.9 percent. In 2016,
twice as much, and are more brand-conscious than China’s food imports value stood at $55.48 billion, an
older Chinese and U.S. consumers of the same age. increase of 1.2 percent on the previous year. In the first
On average, the Chinese consumers aged 18 to 35 half of 2017, China’s food import reached $29.38 billion,
surveyed by the World Economic Forum were aware of up 8.3 percent from the previous year. The top ten
20 skin-care brands while U.S. consumers in the same food exporters to China include the U.S., New Zealand,
age range were aware of only 14. Also, 49 percent of Australia, Indonesia and among others. The total export
young-generation Chinese said that they advocate for value to China accounts for 63.6 percent of total food
brands, either personally or online, compared with 34 import to China (Wang, Compound).
percent of their U.S. counterparts. Young Chinese also
have a greater emotional connection with brands. A Roughly 22 percent of China’s monumental population
top priority of 18- to 25-year-old Chinese consumers is set to join the middle class by 2022. Its 109 million
buying skin care products is that the brands should current members already outnumber those in the United
“fit their personality” and convey that they are “young States. Wages have risen 400 percent in China since 2000.
and energetic.” First-time buyers of certain goods in Chinese consumers are now eating more dairy products,
emerging markets trust well-known international eggs, meat and seafood than ever before. Take seafood
brands more than domestic ones. As consumers gain as an example. Consumption of this product group will
experience and become more knowledgeable about reach 35.9 kilograms per person by 2020, with some
products, they explore alternatives (Kuo). regions already exceeding 40 kilograms each (Niu et al.).
Food China only holds 20 acres of arable land per 100
people. And, according to official news source Xinhua,
People need to eat, and Chinese domestic production more than 40 percent of this land has degraded since 2014
levels cannot keep up with demand. As such, China has (ITE). Furthermore, the breakneck pace of the country’s
no option but to rely on food imports, leading to nearly development brought some nasty side effects. Factories
half a trillion dollars in imports each year. Exporters swallowed tracts of prime land. Fields were polluted
274
