In China, the market for ready-to-eat meals is flourishing. Among the basic living needs, “food” undoubtedly occupies the first place. During the quarantine period and the closure of restaurants, people rushed to buy ingredients on the major digital platforms.
At the same time, ready-to-cook dishes have become the leading choice of many people during this period of isolation.
However, due to problems such as transportation difficulties for the impact of the epidemic, some local supermarkets’ instant food and raw materials shelves could not be restocked, and it was also “hard to find a dish.”
Data shows that since February 2022, the overall sales of instant food on Tmall have increased nearly 7 times year-on-year. And during the epidemic, ready-made food became more popular, especially among young consumers.
What were the favorite ready-to-eat meals during the epidemic in China?
China saw a rapid growth of various kinds of products in the ready-meals industry.
Rice noodles, instant noodles, self-heating rice, and self-heating hot pot have been the best sellers among pre-cooked food, and instant noodles and quick-frozen food are the favorite categories, taking more than half of the market.
The market size of quick-frozen food is about 150 billion yuan, and that of instant noodles is about 100 billion yuan. It is expected that the sales growth rate of the instant food industry to remain at around 6% in the next few years and the scale of the industry will exceed 630 billion yuan in 2025.
The success of noodles in the prepared dishes industry
The River Snail instant noodles, also called Luosifen, are a specialty of Liuzhou, a city located in the southeast province of China Guanxi. Since 2014, due to the impact of takeaway platforms such as Ele.me and Meituan, instant noodle sales have shown a downward trend. In 2019, this negative trend stopped. And since 2020, River Snails rice noodles have become the favorite prepared dish during the epidemic.
- Ramen Talk: The brand RamenTalk was established in 2016. In November 2017, “Ramen Talk” announced that it had received an investment of 4 million yuan. In March 2018, “Ramen Talk” completed another 10-million-yuan A round of financing. On April 17, 2020, “Ramen Talk” thanks to Li Jiaqi’s live-streaming sessions sold hundreds of thousands of pieces.
- Baman beef noodles: This brand also emerged as a fast-food brand during the same period. In 2014, Baman Beef Noodles started from offline stores, and in 2016 they launched a series of quick-cooked beef noodles. Since 2014, Baman Beef Noodles has received investment from many well-known VCs such as Zhen Fund and IDG Capital. In April 2018, after Baman Beef Noodles completed tens of millions of yuan in Series B financing, the valuation reached 500 million yuan.
- Sichuan Baijia Foods: On February 19, 2020, Sichuan Baijia Foods secured 110 million yuan in Series A financing, led by Tongchuang Weiye, with a 10% equity investment in Baijia Foods. The funding will be primarily used to increase factory production capacity and expand offline sales channels and online direct supply business. Baijia Foods experienced a significant increase in orders during the Spring Festival last year, with orders reaching a value of nearly 200 million yuan by the end of February, surpassing the sales of 40 million yuan during the period in 2019.
Self-heating hot pot: another leading product in the prepared dishes industry
Self-heating hot pot products are also popular among Chinese consumers. Since the second half of 2016, self-heating food entered the market. Statistics show, self-heating foods were incredibly desired during Covid-19 pandemic.
The number of company registrations increased by 75% compared to 2016, and 1.7 million products were sold during Double Eleven festival last year. This traditional thick soup, popular among Chinese consumers and present in restaurant chains around the country, also became the go-to ready-to-head dish in China.
The industry structure of self-heating hot pot products is relatively concentrated. Among the traditional leaders, there are Haidilao, Dalongyi, Xiaolongkan, and Dezhuang quickly entered the game relying on their main business experience. Snack manufacturers such as three squirrels, Liangpinpu, and Baicaowei also joined the battle.
Chinese demand a healthy transformation of prepared dishes
Prepared dishes and instant food have been popular in China for a long time. However, the consumption of instant noodles has declined in recent years due to the rise of food delivery platforms.
Chinese people are now more concerned about having a healthy diet, which has led to the emergence of high-end prepared dishes like “Ramen Talk”.
This brand focuses on providing high-quality and healthy ready-to-heat food, such as their classic tonkatsu ramen. It allows consumers to enjoy delicious Japanese ramen at home without going to a restaurant.
Traditional instant noodle brands are adapting to changing consumer preferences by launching high-end dishes. The new Chinese strong demand for instant noodles is focused on nutrition, taste, and convenience.
The report shows that for the whole year of 2022, Master Kong achieved revenue of 38.217 billion yuan, with an increase of 7.97% year-on-year.
In its instant noodle business, while container noodles had the highest revenue, reaching 12.321-billion-yuan, high-priced bag noodles revenue was 10.198 billion yuan, and mid-price bag noodles revenue was 2.59 billion yuan, which increased by 4.46% and 6.89% respectively over the same period last year.
What aspects should foreign companies consider before selling prepared dishes in China?
Chinese cuisine is known for its wide variety of dishes, making it difficult to predict what foreign dishes would appeal to the Chinese palate. However, it is a known fact that the Chinese enjoy consuming hot food and beverages. Soups are particularly popular, and instant noodles are a common choice among pre-prepared dishes. Soups are often paired with noodles, vegetables, and meats.
Additionally, the Chinese prefer to eat rice with sauce and are not fond of dry foods like hard cheese.
Japanese cuisine has gained popularity in China, with Korean barbecue also being well-liked, especially in major cities. Italian pasta and Australian steak are other popular foreign dishes among the Chinese.
Chinese consumer behavior is constantly changing, so companies need to adapt. Chinese consumers are becoming more open to trying new foods, and even small details can impact their perception of a product. This is why its important to promote your brand with such content on Chinese e-commerce platforms.
For example, Kraft successfully entered the Chinese market by studying consumer preferences and creating a less sweet, more affordable version of Oreo biscuits in smaller packages. It’s important for companies to understand and cater to the evolving tastes and preferences of Chinese consumers.
Chinese consumers do their research online: it is also true for premade food
Although the market is growing there are a lot of preconceived ideas about premade food: tastes wrong, is bad for health, and so on. It is important for premade food brands to counter these ideas in order to make it on the market with direct consumers and with distributors.
It does not matter if you are looking for a wholesaler or wish to sell directly to consumers, building your reputation online is the number one step to making it in China.
Today, Chinese citizens spend 5 hours 20 minute searching the Internet. They do many activities on the web and companies leverage this trend to create a business, in fact, the Chinese digital ecosystem is huge, and is easy to lose your way inside it.
Chinese users, especially the younger generation do everything online and have to choose among different apps for multimedia information.
A company can sell something on its own website (the less popular option), or through its online store on one or more eCommerce platforms (and social eCommerce platforms).
Chinese can spend more quickly and rapidly than their western counterparts and this is due to digitalization.
The importance of digital marketing to gain the attention of Chinese consumers
Considering that the Chinese routine includes many hours per day on the internet, a company that wants to be competitive in a such digitalized market must have a strong presence on the web.
After having done some market research and had known what kind of products a certain target can appreciate, the company should study its digital marketing strategy, that even if varies according to the offer and the demand, it usually shall include at least some of the following digital channels:
- Chinese website: A website is a personal space for a company to communicate its mission, history, and offerings. In China, it’s important to have written content in Chinese and adapt the design and communication to Chinese preferences. To increase online visibility, an SEO strategy can be used. However, to be visible on Chinese search engines like Baidu, a Chinese domain ending with .cn is necessary. It’s important to note that having multiple domains can result in penalties from Baidu.
- Chinese search engines, social media, forums, online magazines, and blogs: utilizing digital spaces to enhance your online reputation is crucial. Engaging in conversations and reviews on Q&A forums, online press, and social media helps build trust with your target audience. Word-of-mouth recommendations play a significant role in purchase decisions. Additionally, creating content on these platforms aids in organic SEO by increasing backlinks and improving search engine rankings.
Baidu: the search engine to promote your prepared dishes in China
Baidu is the most popular Chinese search engine with more the 70% of the market share. Other popular Chinese search engines are Shenma, Sougou, and Haosou.
The relevance of Baidu decreases for mobile usage. This is mainly due to the power of the Chinese tech giant Tencent in the social media field. In China, the most used social media app is WeChat, and it is owned by Tencent, which also owns Sougou.
The result is that Sougou is the second largest search engine on mobile research with 23% of the market share, which follows 42% of Baidu.
Use Forums & Q&A to promote your premade food brand undercover
The Chinese equivalent of Quora is Zhihu. Just like Quora, you can write questions and answers and link websites. In this way, you can give and receive reviews about your brands and products and do SEO.
Chinese Social Media are Keys for Premade food brands
Chinese social media: the most powerful tools to improve your reputation in China. According to your target, you should choose which social media use for branding.
WeChat, Douyin, and Weibo are very popular in China but should be used in very different ways. If the communication on Douyin (the Chinese original version of TikTok) mainly relies on short videos, WeChat content is articles send as newsletters in instant message format or promotional messages sent within WeChat groups, but not only.
And while WeChat is a closed network where users are more familiar with them and generally visit the content of friends or people they already know; Weibo is an open social media where users are also used to seeing the content of brands and people that do not follow yet.
Start selling your premade food on Chinese eCommerce platforms
Do you want to sell to Chinese consumers? You need a store on one or more of the numerous eCommerce channels.
Just one suggestion for those who want to sell foreign food in China: the point of strength of foreign products in China cannot be the low price, because surely the Chinese can find cheaper products sold by Chinese players.
And, considering the increasing interest in high-quality products even in the prepared dishes sector, this information is not so bad. The most used cross-border eCommerce platforms to buy high-quality products are Tmall Global and JD Worldwide.
Not by chance, one of the most successful categories of products sold on Tmall was prepared dishes.
Haidilao Hot Pot is a well-known Chinese restaurant chain that specializes in hot pot cuisine. In recent years, they have expanded their business by introducing prepared hot pot dishes for consumers to enjoy at home. This move has been incredibly successful, and Haidilao has become a household name in China.
Here are some key factors contributing to Haidilao’s success:
- Brand Reputation: Haidilao has built a strong reputation for providing high-quality hot pot dining experiences in their restaurants. This reputation has helped them gain the trust and loyalty of consumers, making it easier for them to introduce prepared dishes into the market.
- Product Innovation: Haidilao continuously innovates and develops new products to cater to the evolving needs and preferences of Chinese consumers. They have introduced a wide variety of prepared hot pot dishes that are convenient and easy to prepare at home, without compromising on taste and quality.
- Distribution Channels: Haidilao has leveraged its existing restaurant network and supply chain to distribute their prepared dishes. They have established partnerships with various supermarkets, online platforms, and delivery services, making their products easily accessible to consumers across China.
- Marketing and Promotion: Haidilao has invested in effective marketing and promotion strategies to create awareness and generate interest in their prepared dishes. They have utilized social media platforms, celebrity endorsements, and targeted advertising campaigns to reach their target audience and build brand recognition.
- Customer Engagement: Haidilao focuses on providing excellent customer service and engaging with their customers. They actively seek feedback and suggestions, which helps them improve their products and better meet customer expectations.
By implementing these strategies, Haidilao Hot Pot has successfully introduced prepared dishes into Chinese kitchens, expanding their reach and revenue streams beyond their traditional restaurant business.
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