Page 270 - 2023 White Paper on the Business Environment in China
P. 270
3 White Paper on the Business Environment in China
345.9 billion RMB, an increase of 19.8% from 2022. food prices have recently eased off their sharp
Food delivery services are significantly more popular rally, concerns persist over a looming global
in China than in the West. This is partially due to the recession, and experts have warned that the strain
higher price sensitivity of Chinese customers and on the food supply is far from over. The end goal
lower food delivery costs, which are about 20% of is for China to become more independent from
the price in the US. The extreme affordability of meal imported wheat (Wang).
delivery in China comes from the fierce competition
between delivery service providers. Due to this Coronavirus restrictions are forcing desperate
tense competition between delivery apps in Greater Chinese farmers to destroy their crops because
China, consumers often receive steep discounts they are unable to sell their produce, highlighting
and coupons when placing an order. This can often the heavy economic toll of stringent restrictions
make online ordering cheaper than dining in. The and the potential threat to food security. Local
intensive couponing practice is a result of price media have reported that farmers across China
wars between the industry’s two major players, Ele. are struggling to sell their harvest because regional
me and Meituan. In 2022, consumers still receive virus controls are preventing travel through many
coupons often, but no longer as large as they rural areas. Farmers from provinces such as Henan,
once were. China’s e-commerce giant JD.com is Gansu, Shandong and Hebei provinces have been
considering entering the O2O food delivery scene in forced to bulldoze fields of vegetables so they can
June 2022, which might end the duopoly situation sow seeds for the next crop. Ruzhou city in Henan
of the industry. Apart from the changes new players province has produced 3.5 million kilograms of
might bring, other forms of food delivery business spring onions, nearly 1 million kilograms of spinach
are also emerging and booming due to the strict and 191 million kilograms of Chinese cabbage
restrictions implemented in major cities to prevent this harvest, but locals can consume only about a
COVID-19 cases. The pandemic has brought new tenth. The rest is stuck in nearby villages because
opportunities to the grocery delivery market (Cheng). trucks cannot enter to collect the vegetables. The
virus restrictions are starting to filter through to
Food Waste consumers in China. The consumer price index
rose by 2.1% in October 2022 from a year earlier,
President Xi Jinping declared war on food waste in while food prices rose by 7% in the same period,
August 2020 as China battled floods and pandemic- compared with 8.8% growth in September.
induced supply problems. The nationwide initiative While consumers have paid nearly 10% more for
was known as the “clean plate campaign”, and vegetables since the end of October through early
it raised the curtain on Beijing’s push to achieve November 2022, farmers have seen wholesale
greater self-sufficiency in the drive to feed the prices drop to nearly nothing, according to a survey
nation’s 1.4 billion people. In the face of rising food- from Xinfadi Market Supermarket in Beijing cited
security challenges, realizing a 1% 2022’s summer by Farmers’ Daily. The market provides more than
wheat harvest from 2021’s record-high level came 90% of the capital’s fruits and vegetables (Sun).
at a massive cost to the central government, local
governments and hundreds of millions of farmers. Alternative Protein
It is difficult at this point for China to increase its
already efficient grain output, therefore reducing 2021 is regarded as the year in which China’s
grain loss and waste is equivalent to increasing alternative protein industry underwent a rapid
grain production. The official measure published in development thanks to the large amounts
2020 also showed that China was losing more than of financing and investment poured into the
35 million tons of grain each year during storing, sector during this period. According to the latest
transportation and processing. Overlapping statistics from QCC (China’s local database for
factors, including the pandemic, extreme weather business registration information), a total of
and Russia’s invasion of Ukraine, are widely viewed 15 plant protein start-ups received investment,
as having combined to negatively affect the global for a total amount valued at 1.563 billion RMB
agricultural and food market. While international (£183.2 million). 2022 also saw a 650% increase
270
345.9 billion RMB, an increase of 19.8% from 2022. food prices have recently eased off their sharp
Food delivery services are significantly more popular rally, concerns persist over a looming global
in China than in the West. This is partially due to the recession, and experts have warned that the strain
higher price sensitivity of Chinese customers and on the food supply is far from over. The end goal
lower food delivery costs, which are about 20% of is for China to become more independent from
the price in the US. The extreme affordability of meal imported wheat (Wang).
delivery in China comes from the fierce competition
between delivery service providers. Due to this Coronavirus restrictions are forcing desperate
tense competition between delivery apps in Greater Chinese farmers to destroy their crops because
China, consumers often receive steep discounts they are unable to sell their produce, highlighting
and coupons when placing an order. This can often the heavy economic toll of stringent restrictions
make online ordering cheaper than dining in. The and the potential threat to food security. Local
intensive couponing practice is a result of price media have reported that farmers across China
wars between the industry’s two major players, Ele. are struggling to sell their harvest because regional
me and Meituan. In 2022, consumers still receive virus controls are preventing travel through many
coupons often, but no longer as large as they rural areas. Farmers from provinces such as Henan,
once were. China’s e-commerce giant JD.com is Gansu, Shandong and Hebei provinces have been
considering entering the O2O food delivery scene in forced to bulldoze fields of vegetables so they can
June 2022, which might end the duopoly situation sow seeds for the next crop. Ruzhou city in Henan
of the industry. Apart from the changes new players province has produced 3.5 million kilograms of
might bring, other forms of food delivery business spring onions, nearly 1 million kilograms of spinach
are also emerging and booming due to the strict and 191 million kilograms of Chinese cabbage
restrictions implemented in major cities to prevent this harvest, but locals can consume only about a
COVID-19 cases. The pandemic has brought new tenth. The rest is stuck in nearby villages because
opportunities to the grocery delivery market (Cheng). trucks cannot enter to collect the vegetables. The
virus restrictions are starting to filter through to
Food Waste consumers in China. The consumer price index
rose by 2.1% in October 2022 from a year earlier,
President Xi Jinping declared war on food waste in while food prices rose by 7% in the same period,
August 2020 as China battled floods and pandemic- compared with 8.8% growth in September.
induced supply problems. The nationwide initiative While consumers have paid nearly 10% more for
was known as the “clean plate campaign”, and vegetables since the end of October through early
it raised the curtain on Beijing’s push to achieve November 2022, farmers have seen wholesale
greater self-sufficiency in the drive to feed the prices drop to nearly nothing, according to a survey
nation’s 1.4 billion people. In the face of rising food- from Xinfadi Market Supermarket in Beijing cited
security challenges, realizing a 1% 2022’s summer by Farmers’ Daily. The market provides more than
wheat harvest from 2021’s record-high level came 90% of the capital’s fruits and vegetables (Sun).
at a massive cost to the central government, local
governments and hundreds of millions of farmers. Alternative Protein
It is difficult at this point for China to increase its
already efficient grain output, therefore reducing 2021 is regarded as the year in which China’s
grain loss and waste is equivalent to increasing alternative protein industry underwent a rapid
grain production. The official measure published in development thanks to the large amounts
2020 also showed that China was losing more than of financing and investment poured into the
35 million tons of grain each year during storing, sector during this period. According to the latest
transportation and processing. Overlapping statistics from QCC (China’s local database for
factors, including the pandemic, extreme weather business registration information), a total of
and Russia’s invasion of Ukraine, are widely viewed 15 plant protein start-ups received investment,
as having combined to negatively affect the global for a total amount valued at 1.563 billion RMB
agricultural and food market. While international (£183.2 million). 2022 also saw a 650% increase
270
