Nowadays with all food delivery apps, it is very easy to have access to fruit and vegetables coming from all around the world thanks to a simple click within a couple of hours or minutes. According to iResearch, the fresh food industry in China and especially e-commerce businesses rose from 59.7 percent to 139 billion yuan. Among the products bought online, fruits are the most purchased ones. Then come dairy products and vegetables.
Market trend
Vegetables are not the most bought products. Indeed there is a heavy demand for imported dairy products. They can purchase vegetables and fruits, meat and eggs, milk and dairy products, aquatics products, and seafood categories. The first 3 most sold types of products are fruits, milk, and dairy products.
Evolution of the market
This industry grows rapidly since 2014. But since 2015-2016, this market knew a new dynamism. Indeed, JD.com opened its first off-line fresh food supermarket in Beijing. Customers had the possibility to buy products in shops or on the app. According to the figures of the company, approximately 10 000 customers visited the fresh supermarket each day during its trial period.
Because people need to buy fresh food regularly, it is good for your retail traffic. They represent the key to success. During the last years consumers’ behavior. Indeed, the rise of new purchasing channels and several retail formats insist on fresh food.
The modernization of distribution channels pushes consumers to move from traditional free markets to hypermarkets and supermarkets for the fresh food market to buy it every day. Even if, the modern channel is becoming more and more important, most people still buy their fruits and vegetables in the free market.
In parallel, we can also notice the new trend which consists of selling fresh food online.
Why online buying is so successful?
It permits us to save time and to have access to many varieties. Nonetheless, one of the drawbacks consists of the fact that people cannot see the product in advance, so they have no guarantee that the products will fit their expectations.
In addition, China knows important urbanization that leads to the continuous growth of the urban population. Consequently, delivery becomes more and more interesting because a more important number of people need to eat.
Concerns of consumers
Because of pollution and safety scandals, people care more about the quality of food and they have higher expectations. A rising number of consumers are ready to pay more in order to have reliable food.
The increasing demand for fresh food pushes the online demand
If you want to sell products in the shop different from selling products online sales. Actually, in China, fresh food requires much higher logistics requirements to ensure product quality especially when it concerns delivery throughout China. The fresh products must be stored and transported under a specific temperature with the shortest delivery time in order to guarantee freshness of the products.
The fact that Chinese consumers show a strong interest in this kind of product makes the fresh food e-commerce market very attractive for overseas importers.
To fulfill the expectations of consumers, e-commerce companies offer a large range of products. While doing this business you may face two major challenges. The first one is about the freshness of the products; the second one is about the rapidity of delivery. For example, Yiguo.com is a fresh food delivery company online. In order to satisfy the demand for customers, the platform looks for partnerships with suppliers and farms in different countries. Yiguo.com sells imported goods and distributes them through its own efficient cold chain logistic system. Then the company expands its cooperative relationship with more suppliers and relies on third-party logistics for some deliveries. Recently, Yiguo.com imports fresh food from 22 countries and distributes it to 310 cities.
Fruit shops knew significant progress during the last decade. According to figures, production and demand will continue to rise. Indeed, the Chinese economy keeps swelling which has stimulated industrial output, import, export, consumer consumption, and also a capital investment. In China, fruit and vegetables represent a big part of the comprehensive market in the food and beverage category. Nowadays, with the extension of transport networks, Chinese people can buy fruit and vegetables and they have more variety than before. Moreover with the increase in incomes and lifestyles that getting better fruit and vegetables will stay a flourishing field.
The pattern of the Fruit and Vegetables Industry in China
A few years ago, Chinese people used to sell their own cultivated vegetables and fruits in open-air markets. Therefore, consumers had the possibility to buy fresh fruit and vegetables from local farmers. Nonetheless, there has been a shift regarding this way of buying. Now, we can notice the emergence of several stores and supermarkets that sell fresh goods. This shift is the result of the evolution in agricultural production and developments in the distribution network. The vegetables and fruit produced are distributed all around the country in different regions.
Chinese Consumers’ Preferences
Today, the increase in wealth in Chinese families led to a shift in their eating behaviors. They care about their future which implies their health. They want to be healthy and have good physical conditions. This is the reason why they are doing a lot of sport and there are careful about what they eat. They desire maximum nutrients and favor healthy food. They tend to have a healthy lifestyle and varieties diet. This trend takes huge importance. Indeed, cooking programmers gain popularity on Chinese TV. Healthy cooking books became more and more popular and attracted a lot of readers. We can notice a considerable growing tendency in cooking and cuisine among local consumers in China.
The Evolution of the Fruit and Vegetable market
This market represents an important share of the total value of agro-business which means, in other words, one-third of the global market. There is a true constant progression in the market. Even though there are still some producers who don’t have modern equipment and continue to produce in old-fashioned ways, this industry is facing transformation for sure which includes dynamic techniques and enterprises. There are many farms and producers that invest more and more in automatic equipment for the harvest. The goal of every producer is to become the leader of the growing market. Some of the producers sold products for 350 million dollars. The increase in production and sales due to the use and improvement of the method including new technologies in order to be more efficient.
The Different Categories of Fruit and Vegetables
We can distinguish two different standards. The majority of fruit production is composed of apples, pears ad grapes. Indeed the market is quite extended for low-cost and especially low-cost fruit. It also implies apples and mandarin with mass production. However, with the changes in Chinese consumers’ mindset, they want products of good quality. Therefore we can see increasing demand in high-end production and this category knows constant growth. Nonetheless, this market is missing production. Moreover, we can also notice the market of organic farming agriculture which follows a healthy trend. This specific market explodes in big cities of China such as Beijing or Shanghai. This category of product is also characterized by higher prices of 5 3 or 4 times higher) than normal fruits.
Evolution of Distribution in the Fruit and Vegetable Market in China
Changing habits and ways of production also led to the transformation in distribution. In major cities, retail accounts for more than half of the market. In addition, there are more and more specialized outlets and e-commerce shops for fruits. For example, the chain Bai Lao Yen opened more than 400 shops in the last decade. The purpose was to reach more than 2 billion RMB in sales every year.
What is the key to entering this business?
Think about the distribution strategy
Once you establish a solid plan for your business, it is essential to consider the best way to distribute your fresh food. As we mentioned earlier, sanity and safety meaning the freshness of the products are very important for Chinese consumers. You need to choose more accurate distributors. You have the choice among several food app delivery or big players platforms.
Design a good website
It is important to choose qualitative pictures to sell you productively. Your products need to be attractive because of the fierce competition. Don’t forget that if you have your own platform, you have to establish an effective SEO for Baidu. Actually, you should remind that in China Google is not allowed. Thanks to our expertise we can help you to do that. Moreover, if you decide to do some advertisements they will lead to your website.
E-commerce
In China e-commerce has much more important than in other western countries. People shop more online rather than offline because they don’t have time to waste. It permits them to have access to different kinds of products which is very useful if you live in a third city. It is very convenient for them because they can compare prices. This is the reason why if you want to be an online retailer, you should focus on high-quality products and develop a strong service of delivery.
You have the choice to decide whether we can help you to create your own e-commerce website or we can help you to get through a successful e-commerce platform such as TMall and JD. In both cases, you have to adopt a solid strategy with these partners and it is not always easy. It also implies a good analysis of the market and your target. You have to think also about a strategy of promotion thanks to a good SEO and advertising campaign in order to be visible.
Read also: China’s healthcare market is expected to reach 400 billion RMB
You might also be interested in our full article on our Strategic Guide to Export Food Brands in China.
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