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Promising Outlook of the Fresh Category in China

Promising Outlook of the Fresh Category in China

Fresh: the number one destination category offline

To the people, food is heaven. As it goes with the Chinese proverb, fresh produce is utterly important to Chinese in their shopping missions. Fresh is the number one destination category, with purchasing frequency about 2-3 times per week. Therefore, the category has become the last and most powerful weapon traditional retailers have against e-commerce and it also explains why online retailers are pouring their efforts in fresh produce in the past year thanks to advancement in logistics.

Change in shoppers’ lifestyles

Looking into the future, the top trend in fresh produce comes with the change in busy shoppers’ lifestyle. For example the young generations, aged 30 and below and without kids, are busy either with work or their own personal leisure, do not care about cooking much but rather would take it to restaurants or order deliveries. Families aged under 50 and with kids on the other hand, are also busy with their work oand kids, and are struggling with the balance of healthy cooking and busy life.

Hema Fresh offers on-site cooking and dining for busy customers who can pick their own fresh food and watch it cooked. In addition, the retailer can also deliver the cooked food to customers’ home.
Supermarkets located in business districts serve fresh lunch boxes with a range of choices to attract office workers and also in efforts to lure them to buy groceries in the store.

What trends do we see in China regarding these shoppers lifestyles?

For the young generations, the opportunity is more for O2O formats or restaurants. And it is key for e-commerce retailer to crack in the offline business, leveraging their online platform, young customer base, and third-party couriers. For example, Alibaba’s Hema Fresh, which offers delivery within 1 hour, works with restaurants in and near its offline store to deliver a wide range of meals together with its own grocery lines and strong seafood category. Convenience stores are also taking advantage of the opportunity to offer meal boxes heatable by microwave instore or salad boxes to capture young busy customers.

Typical prepared food in supermarkets, not so attractive or convenient and the price certainly does not reflect the quality.

However, for families with kids, delivered meals are certainly not healthy at all and can not be an option for the long run. They need to cook themselves but want to save time in shopping as well as preparing. Thus, two opportunities have emerged. First, retailers can deliver the fresh produce to doors for those customers. But the weekly delivery service proves unsuccessful due to poor quality control and lack of choices, which Chinese shoppers really care about. It is always inspiring and exciting to see the actual fresh produce than pictures online and therefore, retailers are opening neighbourhood stores to get as close as possible to save shoppers’ shopping time. In fact, shoppers are combining e-commerce and smaller stores, making purchase of standard products online such as condiments and buy other food mostly fresh offline. Second, retailers can sell prepared or ready-to-cook meals so as to help customer saving precious time while keeping healthy meals.

Few really benefit… Opportunities!

Neither is new but why few are doing well to benefit from this trend? In our next China blog we will go into the reasons why only few are able for benefit from this trend and what opportunities this gives for international suppliers in the Chinese market! Because remember, 1% of the Chinese market equals 14 million customers! Opportunities are big! Please like and follow Caracter Community to keep you posted on opportunities China can have for you!