Nearly half (47%) of urban Chinese consumers report spending more year on year on food to be consumed inside the home, reports a new study by market research firm Mintel. The segment experiencing the fastest growth was western foods such as chocolate, which grew 20% between 2008-2013, the report continues. Similar growth in in-home spirits suggests consumption occasions are moving into the home as middle class Chinese urbanites spend more on themselves. As lower-tier Chinese cities develop, Mintel expects higher-premium goods to lead the growth in this sector as Chinese consumers develop tastes for new products. Other western foods such as bread and bread products, sweet bakery, cheese, and pasta have grown at a rate of over 30% in the five years to 2013. “Already, we are seeing increasing demand for products like cheese and coffee in second- and third-tier cities as more consumers are integrating them into their diets,” says Ruyi Xu, Head of Research China at Mintel. “Though the overall sizes of these sectors remain small, their recent rapid growth suggests that food and drink to be consumed in-home by middle class consumers are major sectors to watch in the coming years.” “As in other sectors, first-tier consumers tend to be more worldly so the biggest opportunities for growth are in China’s fast-developing lower-tier cities,” Xu commented. Restaurant spending also grew at a rate of 12% between 2008-2013, however this growth can be directly attributed to urbanization, according to the report. The sector doubled in size between 2008 and 2013, reaching a total value of RMB 928.72 bn. Because consumers individually claim to spend roughly the same amount on restaurants year on year, this is due largely to urbanization as lifestyle changes and a greater variety of restaurant options cause new arrivals to eat out more. Within the sector, restaurants promoting healthy food are expanding the fastest, in line with consumer trends across the board. Alcoholic drinks also continue to grow despite recent measures to curb spending in this sector. Whereas previously growth was driven by the high-end sector, it is now lower- and mid-range drinks driving the growth. Between 2008-2012, overall revenue growth was at a compound annual rate of 19.9% when fuelled largely by high-end spirits and wine; in 2013 it dropped to 2.6%, suggesting that current growth is coming from an increasing number of consumers who purchase these lower- and middle-tier drinks for their own consumption. Men’s products to fuel the next wave of consumer spending as men begin to treat themselves In a trend that crosses industries, new data released today by Mintel show that men are expecting to spend more on products for themselves as strong growth in China’s menswear and beauty and personal care markets reveals latent potential. Men’s personal care products grew quickly between 2007-2012—facial care products especially grew at 34% CAGR as compared to 13% for women’s facial care products, showing that men are quickly becoming more willing to spend on themselves. “The markets for menswear and men’s personal care products are in their infancy in China,” said Ruyi Xu, Head of Research China at Mintel. “Yet we are seeing very high rates of growth in both of these sectors as male consumers become more sophisticated in their tastes through exposure to online and offline media. We expect these sectors to grow substantially in the future, especially as consumers based in lower-tier cities become more willing to spend on their personal appearance.” Mintel’s latest research reveals that China’s clothing and accessories market reached a total value of RMB 2417.78 bn in 2012, with growth at 18% between 2008-2013 making it the second fastest growing consumer goods category. Women’s wear continues to dominate the market however strong growth in China’s menswear suggests this sector will push the market even higher. Online apparel grew at an incredible 1880% between 2008-2012 as online shopping and payment services such as Taobao and Alipay became more integrated with people’s lives over the period, as well as expanded internet access across the board powered the growth of China’s online retail sector. Mintel expects this sector to continue to grow as urbanization and rising standards of living expand internet access even further. China’s beauty and personal care market is worth a total of RMB 440.73 bn and grew at a healthy compounded annual growth rate of 9% between 2008-2013. Throughout this period, growth was driven by products marketed at women, who make up the overwhelming majority of customers for this category. Women are expected to continue to make up the majority of consumers of products in this category, however the huge growth in men’s personal care products between 2007-2013 suggests strong potential for the future. You might also be interested in: No related posts.