RIRDC - Research Compendium 1993

Rural Industries
Research & Development Corporation

Research Compendium 1993 - 1994

Research Project

THE MARKET FOR PROCESSED FOOD AND BEVERAGE PRODUCTS IN URBAN CHINA

Objectives

To empirically evaluate consumer expenditure patterns, consumer characteristics, market size, and market growth prospects.

Background

Previous analyses show ongoing and new opportunities for Australia to market processed food and beverages in Asia where the Chinese economy appears set to emerge as the single largest prospect for growth in food consumption. Seizing opportunities such as these is an economic priority for Australia.

Research

The immediate purpose of the survey was to find out who is buying what products and in what quantities. The primary data used in this study comprise over 5150 observations from face-to-face interviews with Chinese consumers patronising urban processed food and beverage shops in four cities. They relate to 79 individual product items within 10 product categories

Outcomes

For 90 per cent of shoppers the number of products did not vary by over four, irrespective of distance travelled to the shop, gender of the shopper, whether or not the shopping was the main shopping, the income level of the shopper, or the size of the family for which the shopping was being undertaken.

Non-alcoholic beverages, meat products, cereal products and fruit and vegetables account for the majority of consumer expenditure on processed food and beverage products.

By far the majority of processed food and beverage products purchased is more 'Western' than 'traditional'. The surveyed urban customers are estimated to spend about 55 percent of their income on food, with about 45 per cent of it consumed in processed form.

The average market growth rate is around 3.7 percent per year, leading to a conservative estimate of the urban market in China in the year 2000 as being worth about $28 billion in the main cities and about $53 billion in urban areas.

Implications

The available evidence tends to question the appropriateness for China of the Western model of retailing with greater centralisation of the retail function in supermarkets and hypermarkets.

The change in Chinese dietary preferences away from traditional home preparation to commercially processed food and beverages could provide marketing opportunities for Australian industries, in a range of processed food and beverage products.

There is a market growth potential for processed foods and beverages in urban China as income per person rises over time with increasing economic growth.

RIRDC Project No: UA-28A

RESEARCHER: Professor Nicholas Samuel

ORGANISATION: Department of Agricultural Business

Faculty of Agricl & Natural Resource Sciences

The University of Adelaide

Roseworthy Campus

ROSEWORTHY SA 5371

PHONE: 08 303 7900

FAX: 08 303 7969

PUBLICATIONS:

Samuel, 1995. "The Market for Processed Food and Beverage Products in Urban China. RIRDC Research Paper, Canberra.