China is a paradise for snacks brands. China’s middle class has grown exponentially over the last decade and the country now boasts the second-largest economy in the world, which means that there are tons of consumers for these snack brands to target. The marketer must first decide what type of product they want to sell: salty, sweet, or savory? Once this decision is made it’s time to determine where their market will be located. Will it be Beijing, Shanghai, or Guangzhou? Regardless of location, every brand needs an on-the-ground presence in order to make sure they can manage distribution and quality control as well as keep up with demand for their products. If you’re looking at expanding your snacks business into China, this post is for you.
China snacks market in a nutshell
The snack industry is booming in China. According to the Department of International Trade Promotion (DITP), it has an estimated output value of 3 trillion yuan ($433 billion) in 2020. According to Statista, the market is expected to grow annually by 5.5% (2020-2025). The market will continue it’s growth at a rate of 6.71% by 2027
In 2021, China’s snack foods revenue reaches US$57,991 million. The expected consumed kilograms of snack foods per Chinese customer in 2021 is 4.3 kg.
In Asia, China had the second-largest revenue of the confectionery & snacks segment in 2019 (US$108 billion) behind Japan(US$150 billion). By 2021, China became the largest market in Asia surpassing Japan and only second to the USA worldwide.
The major consumer group for snack foods in China is young people aged between 20 and 30. According to Mintel Group, China is also the largest consumer of salty snacks. Mintel estimated that the country consumed about 5.5 million tons of snacks, followed by 3.7 million tons in the United States and 1.3 million tons in India and 582,000 tons in Japan, and 557,000 in Mexico.
As health awareness rises, the Chinese prefer healthy, nutritional, and fresh snacks. Thus, nuts are hugely consumed by them. Online popular categories are also cakes and pastries, cookies, meat snacks,s, and dried fruits.:
- Natural food;
- Whole grain;
When it comes to e-commerce, according to the Snack Report by the Chinese Ministry of Commerce. snacks are taking up 30 percent of all online food sales.
Chinese snacks market’s characteristics
The food industry in China is constantly evolving. The country’s consumers have become more demanding and for snacks brands to set themselves apart from the large competition, innovation is key. Thinks Flavor, texture, “health” properties, packaging, etc Popular snacks in China usually have attractive packaging, a good brand image, and natural ingredients without sugar.
Chinese Snacks Consumers profile and behaviors
- 56% of snack buyers in China are females.
- The main snack consumer segment is aged from 18 to 44. Specifically speaking, in the age group 18-24, 82% of purchases are let by cravings. More broadly 77% of customers purchase snacks to satisfy a craving (As per Mintel’s findings). Other reasons include satisfy hunger (59%), refueling when exercising (57%), and getting additional nutrition (53%).
- Speaking more of the cravings, Chinese customers prefer crunchy and crispy textures. According to Mintel’s report, 59% of chinese snacks consumers take into account crispiness when purchasing biscuits and crackers. Thus, the rise of the new category of wafer biscuits.
What are the mains occasions to purchase & consumers snacks in China?
- Social activity
In the office, companies often offer snacks and soft drinks to their employee. The purpose being socializing, and bonding. On top of office snacks shelves, colleagues commonly order snacks together and join food groups buying online and offline (such as Pinduoduo – we will talk about it more in detail later in that post). During social gatherings, many Chinese place snacks on tables chatting and snacks. It is also customary to have some sort of night snacks as diners are eaten early.
- Snacks as Gifts
During Chinese holidays/festivals, the Chinese send snacks gift boxes with high-end and gorgeous packaging to showcase their sincerity. For instance, chocolate boxes are popular options for Chinese Valentines Day. Another example would be the mid-autumn festival, where peoples gift each other moon cakes and snacks boxes.
- Imported Snacks Segments finding its public
Chinese customers are opened to new and diverse taste experiences. According to Mintel’s study, 42% of urban Chinese shoppers, reveal interest in buying imported products. One-third (34%) purchase snacks from imported stores, 28% during travel, and 19% buy through foreign websites. While 75 % of consumers have bought foreign products from e-commerce, physical retail channels remain the most popular purchase channel (96%).
Snack Segmentations and Trends in China
- Baked goods
Baked goods include bread, cookies, and cake, etc. Baked goods are predicted to be the snack segment experiencing the biggest growth in China by 2024. Baked goods are seen more and more like a good choice for breakfast. Chocolate and puffed snacks have a high market concentration rate and have a tendency to compete with high-end products in these industries.
According to Leadleo’s report, baked nuts revenue in China grew from 1200 billion in 2015 to 1751.9 billion in 2019. The 3 leading brands of baked nuts per share in China are as follows Three Squirrels (20.4%), Bestore (18.0%), and Qia Qia (13.7%).
- Puffed snacks
The puffed snacks market will experience a 4.5 growth rate by 2024 and recorded 161billion revenue in 2019. This growth can be attributed to the innovation in the segment and an increasing number of brands offering puffed snacks. In the country, Leading brands with a high-penetration rate are China’s Oishi(30%), Lay’s(25%), and Korea’s Orion(25%). In this segment, we observe the multiplication of flavors and textures.
- Meat snacks
According to Daxue Consulting, the market share of meat snacks rose to 21% in 2020 and the leading type of meat is duck. Chinese customers prefer meat-based snacks more than carb-focused snacks. However, this preference for meat snacks is mainly observed in non-1st tiers cities.
- Healthy snacks
According to McKinsey, there is a rising awareness of health in China and consequential lifestyle changes happening. In the McKinsey China Consumer Survey, we can see that 72% of urban consumers are actively seeking a healthier lifestyle which mainly translates by participation in Sports activities and taking healthier foods choices. This health awareness transpires in the Chinese snacks market.
Dried fruits, vegetable chips, nuts, and yogurt are popular healthy products. Multi-grains, less calorie, less-seasoned, sugar-free, low-carb, high-protein, non-fried, high-fiber, additional nutrition are popular features looked for in snacks.
When purchasing nuts and seeds, the majority of people polled by Mckinsey said their choice was determined by the taste (58%), while 44% of consumers like the convenience of consuming this type of snack. Another 9% answered they do not purchase nuts and seeds because they are unhealthy.
FMCG Gurus reports that 59% of Chinese customers plan to intake functional foods with additional nutritions such as protein and vitamins. Additionally, 44% of them seek protein-fortified snacks. Furthermore, 73% of consumers want high protein options in the yogurt category, followed by 68% for the biscuits segment, 62% for drinking yogurt, and 57% for chocolate/confectionery.
However, there is still space for improvement to meet all the expectations. Some 59% of questioned participants said they believe that existing rich protein snack products have too many additives and only 35% are satisfied with the taste.
- Kids healthy snacks: a new trend in China
After the Covid-19 pandemic, Chinese people put more attention to what they buy and they appreciate more and more healthy and high-end products. Healthy and safe will be more valued by Chinese consumers, that’s why healthy snack producers have great opportunities to increase their sales in China.
In addition to adult snacks, kids have become an important segment for the development of healthy snacks. The large Chinese kids’ snacks market is still in its early stage of development and is expected to exceed the market size of RMB 600 billion yuan (USD $86.7) in 2020.
An interesting example of “healthy” snacks is cheeses targeted at kids. Indeed, cheese goods for kids is the most popular type of cheese sold in China and brands have understood that. They promote in a way that speaks to health-conscious parents with labels such as “high in calcium/proteins”. This type of product is also designed to be easy to eat like any other snack would be.
Chinese Consumers Consideration when buying Snacks
- Packaging attractiveness
Chinese customers love nice packaging. Just like in the rest of the world, social media can partly thank/blamed for this but other reasons explain this love for well-designed packaged As said earlier, bt buying snacks as a gift is pretty common. Another reason for this is the competition. An outstanding/memorable packaging will help brands set themselves apart on stores shelves.
Thus, for small and new brands entering the market, branding is apparently important, but attractive packaging can trigger the first purchase as well. The overall design of snacks packaging will help consumers identify the type of products that are sitting in front of them, from knowing if it is expensive/cheap, for kids, healthy, and so on.
Healthiness and Freshness
Most Chinese snacks shoppers (over 80%) prioritize health first. Among this 80%, the vast majority (88%) are millennials (Consumer survey by The Harris Poll). The second-greatest consideration belongs to freshness and millennials account for 85% of consumers looking at this criteria when buying snacks.
What Channels to Sell Snacks in China?
According to sales revenue, supermarket still generates the most snacks sales up to 57% in total followed by franchise chain store (20%), retail store(15%) and eCommerce (8%).
We see more and more small snacks brands blooming on the Chinese online marketplace. For most brands, classic distribution is not a goal easily achievable. With eCommerce, there are fewer difficulties to enter the market. Ecommerce also comes hands in hands with many promotion tools and advantages that classic distribution can’t offer: Full Control of the sales & promotion process / Prices comparison & online review/ easy consumer access and so on. More on eCommerce later in this post.
Best strategies to sell snacks in China?
Why a Chinese consumer should choose your products instead of those of your competitors? This is the question you have to keep in your mind when thinking about the Chinese market. Do not forget that it is a very competitive and fragmented market.
In order to attract consumers’ attention, you have to work to build a good brand image. Reputation in China is everything, especially when you are a new brand trying to set foot into the market. Chinese consumers research extensively when they have to decide which product to buy.
- Omni-channels strategy
All 3 Chinese leading snack brands have online and offline channels. Three Squirrels is present on JD.com, Be&Cherry has a Tmall store and Bestrore collaborates with Alibaba.
Super Brand Day, Supermarket Brand Season, and Super Fan Day initiate with brands to launch marketing events jointly and promote sales growth in eCommerce. In 2020’s Super Fan Day, brands(Yili, P&G, Mars Wrigley, and Mondelēz) reached three-time growth. In 2020’s vacation marketing event, PepsiCo Foods and JD succeeded to push the 220% increased sales.
1. Snacks Brands in China need to work on SEO (Baidu)
As a brand in China, it is essential to be present online where people spend their time and do their research. When stumbling on a new eyes-catching interesting product/brand, the Chinese consumer’s first step is Baidu, China’s most used search engine. If netizens are unable to find anything related to your snacks brands there, I have bad news for you. Indeed, even if they see your products on trusted e-commerce platforms, no results on Baidu when looking for information will impact your conversion rate (at least if you are new on the market with little brand awareness) as Chinese consumers are not risks taker and value peer reviews.
Baidu covers +70% of queries made on the Chinese internet. Just like Google, Baidu has its own ecosystem (Baidu Search, Baidu Promotion, Baidu Video, Baidu Maps, Baidupedia). Baidu is not always very partial when it comes to its SERP and will most time favor content posted on its own platforms. That is how you’ll see Baidu forums post ranking ahead of a Zhihu’s ones on a similar topic for instance.
PS: To optimize your chances of ranking on chosen keywords, have a Chinese Website. It’s easier to control the content on your own website than on third-party apps. To be effective, a website is best to be host in China or Hong Kong, translated into Chinese, UX that appeals to Chinese netizens, an on storytelling, and a lot of information about the company and the products you offer.
Chinese Social media to Promote your Snack Brand
Chinese netizens are always connected. With around 1.4 billion people and over 668 million who regularly access the internet, China is the country with the highest number of web users. To sum up, one in two Chinese surfs, chats, inquires, and finalizes purchases through their computer or mobile devices.
Use WeChat to engage with your community
WeChat is the app where Chinese people spend most of their time. It can be defined as a super App because it allows you to send messages, do video calls, pay at the supermarket, book a taxi, but also buy products, thanks to its mini-program. For a company, the best option is to open an official account, which there are 3 types of. We pretty much always suggest a “service account” to our clients if their core business is not content.
Why using a Wechat Service Account?
Service account unlocks more effective tools to create a “relationship” with your follower. For instance, when publishing content, your follower will receive a push notification, just like if a friend messaged them. You can publish 4 times a month (articles, videos, gifs, audio). It is more complete because it offers extra services like the geolocalization of users, best visibility, e-commerce channel, multiple Qr Codes.
WeChat is one of the best social media to create engagement with your following, to nurture it (it kind of replaces your email marketing – expect you have more tools than with emailing). It offers many tools such as WeChat CRM, WeChat groups, WeChat mini-program, WeChat Channels.
By using WeChat membership functions you can convert your followers into members and keep them interested in loyalty programs (it’s cheaper to retain customers than get new ones). This also allows you to get valuable information. A member can use the geo-localization function to pair up with users by their Wechat ID or phone number. This is perfect to create more custom marketing content to reach your audience more efficiently
Read our Wechat Marketing Guide
There are three types of Paid Advertising on Wechat:
- Moments Ads. Would not recommend for small brands. They are expensive and in our experience, the ROI is not great if you are not a well-known brand.
- Kols (an agreement between an advertiser and a popular blogger that will be paid for the creation of advertising content in the form of a newsletter),
- Banner ads. It presents itself as an announcement that appears at the bottom of another official account. It uses the same targeting system as WeChat Moments ad.
WeChat is an indispensable tool when doing business in China.
Read our Wechat Paid Advertising Guide
Weibo to increase your snacks brand awareness: buzz marketing
Weibo might not be as popular as it was once, but good commercial content on Weibo can be a lot more impactful than on Wechat. It is a social media similar to Twitter; it allows creating micro-blog, sending messages, following brands, Kols, and trends, to do live-streaming and it has some gaming activities. It is a one-to-many platform, so it is easier to have followers here than in WeChat.
Weibo helps to increase brand awareness, to ensure great visibility for events and promotions. It is the best place where brands can post good content: easy to read and easy to share. Your post will get only some seconds of attention so it’s important to make it count. Weibo is a great tool for being commercial.
After a few months of building your reputation and brand image, you are finally ready to test the market with online sales. It’s best not to go into physical stores at least in the initial stages as it will save money from start-up costs until there is enough demand for more brick and mortar locations.
Sell Snacks on Chinese Ecommerce Apps
Ecommerce is not an option that can be overseen anymore when it comes to selling snacks in China. The most popular eCommerce apps are Tmall and JD but there are many others for smaller brands that do not have the resources to start with these expensive options and this is the one we will look at today.
Pinduoduo: the e-commerce platform for your snacks brand
Pinduoduo is famous for its group buying function. It is one of the most important e-commerce platforms in China with Tmall and JD. It works on the model of social commerce, which means it has a mix of social media and e-commerce functions.
One of its strong points is the cheap price and discounts. In fact, generally, the products on the platform have very low prices. Furthermore, users can take advantage of the group buying function to further lower prices. For this reason, Pinduoduo is particularly used by the most attentive consumer groups.
In the first half of 2020, Pinduoduo had 683 million active buyers. This figure marks a 41% growth compared to 2019 and makes PinDuoDuo the fastest-growing e-commerce platform in China. In most cases, these new users are young Chinese boys and girls. In fact, Pinduoduo is the e-commerce platform with the highest growth rate of users between 19 and 35 years in China (the main target audience of snack brands). In 2019, the platform revealed that 55% of Pinduoduo users come from third and fourth-tier cities. The remaining 45% comes, however, from the first and second ones.
Xiaohongshu: the Reviews App to Help with your Snack Brand Reputation in China
Xiaohongshu is social commerce. The user can buy the products directly from the platform. It has more than 200 million users and it is really interesting for beauty, luxury, but also travel and food. 60% of users are Millennials or Generation Z (the target audience of snack brands) and more than 70% live in first or second-tier cities. 85% of users are women.
It is a mix of Instagram, Pinterest, and Amazon. It is based on a “content-driven” model, which gives great importance to content. It was born as a shopping guide. It mainly attracts consumers who reward quality and authenticity.
For this reason, it represents an opportunity for international brands. The content of social commerce shows the dual nature of the platform: a marketplace and social media. While in the traditional e-commerce platforms the user enters when he is interested in a product, in social commerce the user enters even also for diversion.
Read: Guide to Xiaohongshu
Sell Snacks in China: to conclude
The Chinese snacks market is both a great opportunity and a challenge for local and foreign brands. It will keep growing in the coming years, but competition will also become fiercer as well. Brands need to find ways of stepping out from the competition by investing in innovation and societal trends that China is experiencing at this moment. we will see a rise in sales of snacks through online channels, thus increasing, even more, the importance of digital marketing to succeed as a snack brand here. If you are looking for help with your social media strategy or want assistance developing an e-commerce platform tailored to meet your needs, contact us!
Gentlemen Marketing Agency is a digital marketing agency that is an expert in helping foreign companies to establish or strengthen their position in China. We can help your brand increase sales in China, thanks to our services like:
- Baidu SEO&SEM
- Social Media
- KOL & Influencers
- E-commerce and cross-border e-commerce