Page 292 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China
current stage of development, and also met the healthier food and drink choices, Chinese
requirements posed by a high-quality development. consumers are also pursuing a more active
China will further leverage consumption in urban lifestyle. As a result, the sports and energy drink
areas as the country continues to update a number market in China shows great potential. Average
of pedestrian streets into platforms on which growth value over the past five years has been
consumption can be better structured for high- promising, and brands are marketing to regular
quality growth. It also expanding rural consumption consumers, rather than just specialized athletes.
by encouraging the flow of agricultural products to There is room for development in this area to
the cities, and the sale of industrial products in the include more natural and healthy ingredients,
countryside. Such measures would enable farmers which 40 percent of Chinese consumers would
to gain access to cost-effective industrial products, pay more for, and more unique flavors which 51
while facilitating the connection of urban and rural percent would be interested in trying (Informa).
markets by introducing e-commerce platforms to
the countryside. Online retail sales soared to 1.37 Milk/Fruit Tea
trillion yuan in rural areas in 2018, up 30.4 percent
year-on-year. More efforts are expected in 2020 that China’s 1.39 billion people already drink nearly
are expected to tap the full potential of key drivers 40 percent of the world’s tea – and they are thirsty
of growth, such as culture, tourism and sports, for more. China, the world’s top producer and the
while customized services and online shopping are largest consumer of green tea, is now exploring
emerging as other important sectors (Wang). black tea from India, Sri Lanka, and Kenya as
well as European fruit and floral teas, American-
Beverage inspired tea fusions and sophisticated oolongs
from Asian producers. China’s tea market is valued
Chinese consumers are among the world’s at US$10 billion and expanding as out-of-home
most health-conscious due to rapid growth and tea drinking leads to new discoveries. Modern
considerable lifestyle changes. In all markets they tearooms featuring puer cheese tea, colorful
are seeking products to make them feel and look bubble tea, Hong Kong milk tea, and western-
healthy and happy, to the point where 73 percent style blends, teaspresso, and fusions are profiting
of consumers are willing to pay more for products from young people’s interest in non-traditional
which are deemed healthier. This move towards offerings. China produced 2.8 million metric tons
healthier options has seen consumers interested of tea in 2018 but even that is not enough to meet
in trying non-dairy alternatives. Despite this shift, demand, which has increased an average of 10
China remains the world’s largest retail market percent per year for the past decade. The growth
for milk, and in 2016 it was the leading market has encouraged the Chinese to try ready-to-drink
for dairy drink innovation. Dairy milk is still widely tea and tea concentrates for preparing iced tea,
considered a dietary necessity in China, but the formats that are relatively new to China. Fruit tea,
nondairy market is set for further expansion as herbal tea, rooibos, and even purple tea are in
consumers are interested in different flavors and demand. Consumers there prefer higher quality
potential health benefits associated with these teas, often relying on third-party certification for
products. China is the biggest market in the Asia assurances the tea is organic and sustainably
Pacific region for carbonated soft drinks (CSD), but grown. They are accustomed to paying much
consumption volume per capita is still lower than more per serving than Western tea drinkers. The
that in developed countries, and the compounded best teas in China bring $1,000 per 500 grams.
annual rate of growth is below average. Most Everyday tea retails for US$10 per 500 grams at the
developed countries including USA, Australia and low end and US$15 per 100 grams at the high end.
Japan are seeing slow growth in the CSD market Imports of tea were up by 33.9 percent in 2017
as sugar content is a big concern. Increasingly, to a total value of US$1.49 billion. The increase
Chinese consumers are also concerned about in imports also reflects trading up as people
sugar levels, meaning there is a market for CSD want more of range, particularly ‘Western’ style
options with less, reduced or no sugar. Alongside tea, a trend catered to by a rising service sector.
A slowing economy will temper domestic growth
292
current stage of development, and also met the healthier food and drink choices, Chinese
requirements posed by a high-quality development. consumers are also pursuing a more active
China will further leverage consumption in urban lifestyle. As a result, the sports and energy drink
areas as the country continues to update a number market in China shows great potential. Average
of pedestrian streets into platforms on which growth value over the past five years has been
consumption can be better structured for high- promising, and brands are marketing to regular
quality growth. It also expanding rural consumption consumers, rather than just specialized athletes.
by encouraging the flow of agricultural products to There is room for development in this area to
the cities, and the sale of industrial products in the include more natural and healthy ingredients,
countryside. Such measures would enable farmers which 40 percent of Chinese consumers would
to gain access to cost-effective industrial products, pay more for, and more unique flavors which 51
while facilitating the connection of urban and rural percent would be interested in trying (Informa).
markets by introducing e-commerce platforms to
the countryside. Online retail sales soared to 1.37 Milk/Fruit Tea
trillion yuan in rural areas in 2018, up 30.4 percent
year-on-year. More efforts are expected in 2020 that China’s 1.39 billion people already drink nearly
are expected to tap the full potential of key drivers 40 percent of the world’s tea – and they are thirsty
of growth, such as culture, tourism and sports, for more. China, the world’s top producer and the
while customized services and online shopping are largest consumer of green tea, is now exploring
emerging as other important sectors (Wang). black tea from India, Sri Lanka, and Kenya as
well as European fruit and floral teas, American-
Beverage inspired tea fusions and sophisticated oolongs
from Asian producers. China’s tea market is valued
Chinese consumers are among the world’s at US$10 billion and expanding as out-of-home
most health-conscious due to rapid growth and tea drinking leads to new discoveries. Modern
considerable lifestyle changes. In all markets they tearooms featuring puer cheese tea, colorful
are seeking products to make them feel and look bubble tea, Hong Kong milk tea, and western-
healthy and happy, to the point where 73 percent style blends, teaspresso, and fusions are profiting
of consumers are willing to pay more for products from young people’s interest in non-traditional
which are deemed healthier. This move towards offerings. China produced 2.8 million metric tons
healthier options has seen consumers interested of tea in 2018 but even that is not enough to meet
in trying non-dairy alternatives. Despite this shift, demand, which has increased an average of 10
China remains the world’s largest retail market percent per year for the past decade. The growth
for milk, and in 2016 it was the leading market has encouraged the Chinese to try ready-to-drink
for dairy drink innovation. Dairy milk is still widely tea and tea concentrates for preparing iced tea,
considered a dietary necessity in China, but the formats that are relatively new to China. Fruit tea,
nondairy market is set for further expansion as herbal tea, rooibos, and even purple tea are in
consumers are interested in different flavors and demand. Consumers there prefer higher quality
potential health benefits associated with these teas, often relying on third-party certification for
products. China is the biggest market in the Asia assurances the tea is organic and sustainably
Pacific region for carbonated soft drinks (CSD), but grown. They are accustomed to paying much
consumption volume per capita is still lower than more per serving than Western tea drinkers. The
that in developed countries, and the compounded best teas in China bring $1,000 per 500 grams.
annual rate of growth is below average. Most Everyday tea retails for US$10 per 500 grams at the
developed countries including USA, Australia and low end and US$15 per 100 grams at the high end.
Japan are seeing slow growth in the CSD market Imports of tea were up by 33.9 percent in 2017
as sugar content is a big concern. Increasingly, to a total value of US$1.49 billion. The increase
Chinese consumers are also concerned about in imports also reflects trading up as people
sugar levels, meaning there is a market for CSD want more of range, particularly ‘Western’ style
options with less, reduced or no sugar. Alongside tea, a trend catered to by a rising service sector.
A slowing economy will temper domestic growth
292
