Why China remains a strong opportunity for European food and beverage brands
November 11 is Singles’ Day in China. Originally a celebration for people not in a relationship (thanks to 11/11 representing four ones, or four singles, standing together), or a kind of antidote to Valentine’s, the day has morphed, thanks to discount deals from Chinese online shopping giant Alibaba, into what’s claimed the largest shopping day in the world, with sales exceeding €134 billion in 2021. Smaller numbers are expected this year owing to economic uncertainty and the lingering effects of COVID-19 in the country. That said, the largest consumer market in the world remains a potentially attractive opportunity for Europe’s food and beverage industry, according to Zarina Kanji, Head of Business Development & Marketing at Alibaba Group’s cross-border digital marketplace Tmall Global.
The 11.11 shopping holiday marks an opportunity for brands to connect with Chinese consumers, she said. Chinese consumers, she explained, are developing broader taste profiles and seeking more international flavours. “Chinese consumers are internationally minded, attracted by the quality ingredients and provenance of European products, especially in the health and wellness, beauty and food and beverages categories,” she told FoodNavigator.
It is believed over 290,000 brands are taking part in this year’s Singles’ Day shopping spree. During its first sales window, which began on 24 October, 750 overseas brands on Tmall Global more than doubled their GMV growth compared to last year’s first sales period, Kanji said. Among overseas brands on Tmall Global new to China, 300 surpassed RMB1 million (€135,760) in GMV, and 20 surpassed RMB10 million.
One of the biggest trends to have emerged from 11.11 so far is coffee, revealed Kanji. “We have seen an increase in the sales of coffee beans of over 50%, with people seeking to recreate that barista experience at home,” she said.
There is also a strong trend for food and beverage indulgence products, including tea, biscuits, and chocolate, as well as a shift towards affordable luxury foods such as indulgence artisan ice cream. Sales of pre-made Michelin-star food deliveries are up by 70%, noted Kanji.
Many consumer trends in China have originated in Europe. Take plant-based food and beverages. “In the West, we probably think we are leading the way here, however, Chinese consumers are becoming fast adopters of plant-based milks as an alternative tasting drink. They are also increasing their consumption of plant-based proteins, meaning Western brands are able to enjoy the success of this trend.
“Both Beyond Meat plant-based meat alternatives, and Oatly plant-based milk were early leaders into China and are both now available in Starbucks across the country. Oatly is now sold in over 4,300 Starbucks locations in China, bringing its points of sale in the country to around 11,000.”
Low or no alcohol beverages are also highly sought after in China, especially by young, female consumers. Heritage brands are attractive too. For example, 300-year-old British department store Fortnum & Mason is reaping the benefits of this as its Sparkling Tea became a bestseller on Tmall Global just five months after launching into the China market.
“Another trend that always pleasantly surprises us is sweeter flavour tea profiles,” added Kanji. “Teapigs has enjoyed success with its chocolate flake tea and its salted caramel rooibos tea, while Whittard of Chelsea’s special edition peach oolong tea, as well as its hot chocolates, has proved popular with Chinese consumers. These flavours are very different to the brands’ top sellers in Europe.”