China’s Snacks Market: a growing trend
The snack food industry in China is rapidly proliferating owing to various factors. Urbanization and rising disposable incomes are fuelling consumerism; the increasing expenditure on packaged snack food among rural populations is also a major driving force. Moreover, development in the logistics segment has expedited the distribution process, contributing substantially to the growth of packaged snack food market in China.
If you are a company selling confectionery, baked goods and savory snacks, there wouldn't be a better time to enter and make it in the dynamic Chinese market.
What you need to know about the evolving snack scene in China:
#1 The Chinese love to snack!
Source: China Daily
Food is a big part of Chinese culture, and snacks are no exception. Snacks are everywhere in China, from roadside shops to department stores. Snack food consumption is also a cultural phenomenon in China as it represents an opportunity for people to socialize with family and friends while eating something tasty and filling along with their drinks during their leisure time. The younger generation especially enjoys sharing snacks because it gives them a chance to bond over something besides work or school-related conversations.
The growing trend of snacking is also a result of the increasing number of urban consumers and their lifestyles. In particular, the fast pace of life has led to an increase in snacking.
#2 What are they snacking?
Source: Honest food Talk
According to the Snack Food Market Overview by USDA Agricultural Trade Office in Beijing, beverages are the largest snack foods sold in China, followed by confectioneries, meat products, dried fruits, and nuts. As per another report by MobTech, the top five categories of snacks sold online in 2020 Q1 were nuts, cakes and pastries, cookies, mat and dried fruit.
Over the pandemic, all savory snacks registered growth - nuts, seeds and trail mixes having the highest growth of 8.6% - where total sales are set to post a fixed CAGR of 7.4% between 2021 and 2025.
#3 Healthier and better-for-you snacks gain popularity.
The COVID-19 pandemic has given rise to health consciousness among Chinese consumers, leading them to seek healthier snack options. The consumer demand for high-value and high-quality snacks is thus increasing. Healthy, light and functional are among China's key snack consumption trends. This has created opportunities for smaller companies that offer healthy alternatives to traditional snacks. People want to eat foods that make them feel light, energized, and easy on the body, such as dried fruits, tofu, dark chocolate etc. Plant-based products and meat alternatives are also increasingly gaining popularity.
#4 The Chinese snack market experiences seasonal variation.
The Chinese snack market also follows a seasonal trend. In particular, the colder months are the peak season for snack consumption. Double 11 ( on November 11) is China's equivalent of Black Friday, a major shopping festival that accounts for much of this spike in sales. Chinese consumers use online sales promotions to snap up heavily discounted products and stock up for the holiday season. Chinese New Year, the most celebrated holiday in China that typically falls in January or February each year, also drives demand for snacks when families and friends get together to celebrate the New Year.
In addition, consumers are becoming increasingly segmented. Companies must develop more products specific to the Chinese market to cater to diverse consumer needs.
E-commerce platforms play a vital role in the growth of the snack market in China.
The pandemic accelerated retail digitalization in China, and snack food sales via e-commerce channels have been growing rapidly ever since. In 2020, e-commerce represented 11.8% of packaged food retail sales in China.
The growth of e-commerce also made it convenient for people to snack. Most snacks are now purchased online via mobile devices, making it easier for consumers to compare prices and purchase items quickly. Many companies even offer delivery services within one hour or less of ordering, which is incredibly convenient for busy working professionals who don't have time to go shopping after work hours.
Snacks will continue to be an upward trend in the food and beverage industry with new brands emerging from all over the world. The Chinese market continues to be viewed as promising for growth in this sector since China's economic and consumption patterns are changing quite rapidly. We've only just scratched the surface, but hopefully, this small guide can help you get a good handle on the rich and colorful, yet very difficult-to-understand Chinese market.
If you also sell confectionery, baked goods, chocolate, savory snacks etc, you'd better get your share of the action . If you need help getting into the heart of the market, get in touch with us!