How to Tap into the Breakfast Cereal Market in China?

Even if, the Chinese market for breakfast foods has long been dominated by traditional meals

Chinese market with increased emphasis on health and wellness, breakfast cereals are marketed as an integral part of a healthy lifestyle and balanced diet.

Despite recent rapid growth, breakfast cereal remains a small part of the overall breakfast market in China. Chinese consumers are expected to spend CNY1.9trn (US$274.74bn) on breakfast products in 2021, up 46% from CNY1.3trn (CNY56.36bn) in 2015.

The cereals market in China continues to see growth. The increasing popularity of lighter meals and Western breakfast habits are the primary drivers

This emerging trend is a rising demand for imported breakfast cereals in the Chinese market.

The progress of the Chinese middle class is altering eating and drinking habits. Consuming more dairy products, and tasting more imported wine, and beers; cereal consumption, in particular, is trending now in China. Sales are growing at 15% a year, because of

1. The increasing penetration of western culture in China
2. the popularity of the health benefits of consuming grain food, such as oats, a breakfast cereal

Nestle and Kellogg, the two leading international players in China, have implemented marketing campaigns for several years which have been effective at informing and educating Chinese consumers about the benefits of starting the day with a bowl of cereal.

Although there are some foreign brands already reached China market, the demand is rising with awareness of the importance of a healthy lifestyle. In dealing with international trade and imports, China develops at a fast pace with the market demand.

Chinese importers are busy importing foreign brands of breakfast cereals to China. The popular food products in the category are the most popular imported foodstuffs to China. For marketing and distribution, local Chinese brands appear to be unable to compete with imported brands.

Does everything know about Chinese consumers’ habits before diving into the Chinese Market?

Image-Conscious Consumers

Chinese consumers are heavily influenced by culinary tastes and fashion trends worldwide. So this has led to an explosion in the market for luxury consumption over the past decade. As boutique stores and foreign retailers established themselves in China. And international firms began bombarding consumers with media campaigns highlighting the latest “must-haves” from Europe and North America.

Along with this growing market for luxury goods has come an increased appetite for products that make consumers feel and look good, such as dietary supplements, weight-control products, and healthy foods and beverages. Chinese Consumers are increasingly looking for premium food and beverage products. It will provide them with the energy they need to get through their busy days, while also suppressing their appetite and contributing to a healthy lifestyle.

Booming Demand for Healthy Foods

China’s rapidly aging population and the government’s increased emphasis on preventative healthcare and is driving demand for healthy foods. The increased consumption of healthier food and drink is noticeable in China. The fortified drinks are performing well against competitors and organic and reduced-fat food products seeing greater demand in supermarkets. This is driving demand for naturally healthy products, such as berries, that are believed to facilitate cognitive function and disease prevention in seniors while providing the nutrition necessary for proper development in children.

E-Commerce and the Rise of Taobao.com

Chinese E-commerce has seen massive triple-digit growth over the past few years, as China has now officially become the country with the highest number of internet users. Retailers are moving aggressively into the market to capture emerging opportunities to serve the country’s growing middle class. Internet retailing offers Chinese consumers greater choice, more convenience, and the ability to properly research items and shop around for the best deal.

Since 2011, Taobao.com was becoming the leading online retailer in China, with 36% of China’s US$25.7 billion in internet retail sales. Total Chinese eCommerce revenue across all product categories is 584 billion USD and is expected to grow to 917.7 billion USD by 2022. Fashion is currently the leading product category in China, accounting for 195.17 billion USD market share, followed by Electronics & Media, which generates 131.8 billion USD in sales. By 2022, Fashion will become the most purchased online category, with an estimated value of 310.25 billion USD, and the second favorite, Toys, Hobby & DIY, will have an expected worth of 193.69 billion USD.

• Internet penetration in China is currently 73.9%
• should reach 81.8% by 2022.
• Smartphone penetration is much less (50.4%), but is projected to grow to 58.8% in the next four years.
• 48% of online shoppers in China buy via desktop
• a stark contrast to the amount of smartphone (35%) and tablet (12%) shoppers.

As internet security continues to grow stronger, distribution systems become more integrated

You have to understand that Chinese consumers become more comfortable with online grocery shopping. This type of distribution is expected that many more urban Chinese will make online food and beverage purchases in the near future.

Multi-Dimensional Shoppers

Whereas in the past consumers were most concerned about the basic functional attributes of a product, their growing income levels and concerns for food safety have increased the attention they pay to various other dimensions of appeal that are more in line with sophisticated consumer habits commonly found in developed countries.

In the past consumers made a lot of purchasing decisions based on recommendations from social equals, or those higher up the social pecking order, but today they are becoming more interested in aesthetic appeal, innovative design and implied the status of products, and how specific products target their own personal needs. Although this trend is currently concentrated in the more developed urban centers, it is quickly spreading across China. As this trend spreads, this is expected to drive an increasing demand, from consumers, for more information about how food and beverage products are produced, and the internet is expected to play an integral role in disseminating information.

“The Chinese market and Chinese consumers have become a cutting-edge example for the rest of the world… Alipay and Tencent use systems that are cellphone-based. You need a Chinese bank account, to properly set them up.

How to market Breakfast Cereal: Secrets behind the success of Nestle in China

Most multinational brands such as Nestle have been relying on previous growth by expanding their penetration in hypermarkets and supermarkets in the past decade.

Nestle and Chinese government partnership

Nestle has opened 33 factories in China, ranging from a dairy factory in Heilongjiang Province in Northeast China to coffee production in Southwest China’s Yunnan Province, four research centers, and one food safety institute, in order to source, produce and sell locally as much as possible.

The company is closely cooperating with the Chinese government on the State plan to improve the health of the younger generation, providing products and expertise to the National Nutrition Plan (2017-30) initiated by the China Nutrition Society.

The launch of the “Nestle for Healthier Kids” global initiative this May particularly chime with the government’s plan. A visit to a Nestle research and development center shows that the company is keen to demonstrate its dedication to providing healthier products with lower fat and sugar content.

The multinational company implemented the digital marketing strategies

To reach more Chinese consumers, digital marketing campaigns will also shift to social media platforms, such as WeChat, Weibo, or Little Red Book. In an attempt to boost brand loyalty, more promotional campaigns are expected to target health-conscious consumers by linking their breakfast cereal to fashion and fitness goals.

The marketing campaign included the distribution of product samples at fitness centers and the decoration of bus shelters in key fashion areas to showcase Special K models wearing the latest slim jeans.

Nestle integrated the Chinese E-commerce

Leveraging powerful e-commerce platforms like Alibaba’s Tmall will help the brands overcome barriers to building distribution, making their products immediately accessible to consumers in smaller cities.

The company is also pouring resources in to get a foothold in opportunities presented by the sweeping digital transformation of the Chinese market. In the Chinese market, the company is cooperating closely with e-commerce shopping platforms. During this year’s Alibaba-led Double-11 shopping festival, Nestle recorded a double-digit sales growth.

Nestle’s China strategy is also in line with other foreign companies’ recent moves in the country, which are eager to expand their presence in the growing Chinese market despite the current unstable bilateral trade relationship between China and the US.

Nestlé has partnered with China’s online retail leader JD

Global food and beverage leader Nestlé has partnered with China’s online retail leader JD to launch China’s first AI family nutrition-smart speaker on Tuesday.

The device”Nestlé XiaoAI” is the first attempt that Nestle has carried out in a conversational interface, which combines smart speaker technology with nutrition and health knowledge. Nestlé XiaoAI is built on JD’s best-selling DingDong smart speaker system and features Nestlé’s custom recipes, music, and nutrition advice. In addition to Nestlé XiaoAI, all of DingDong’s speakers will also contain this Nestlé content. A limited-edition beta version of Nestlé XiaoAI is now available on JD.com.

Nestle SA and Alibaba Group Holding Ltd have launched a digital commerce and marketing campaign, a move the Swiss food giant hopes will boost its disappointing business in China through innovation in products and digital distribution channels.

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