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Livestream e-Commerce is 10% of China e-Commerce GMV

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C

Have you heard of “livestream e-commerce” but aren’t quite exactly sure what it is or how your brand can use it? Read on to get up to speed in record time – all it takes is the time to read this blog post.

Like many other things in China, livestreaming has taken on a different route and trajectory to the rest of the world. In other regions, livestreaming is focused on social and gaming. In China livestreaming has these dimensions too and has found an important role in e-commerce.

2020 was a big year for livestream e-commerce in China. Per HSBC and Qianhai Securities, livestream e-commerce is now estimated to be 10% of China’s e-commerce pie and could grow to 20% by 2022. At current levels, China’s estimated livestream e-commerce value is equivalent to the half of Amazon’s GMV in 2019. Needless to say, that’s huge!

Image Credit: SCMP

Livestream e-Commerce Uptake

There are good reasons for the strong uptake:

  • Livestream hosts (KOLs, as they’re called in China) carefully curate their product selections to their fan’s tastes. That leads to high conversion rates. Indeed, Taobao boasts that its conversion rate across livestream is an astonishing 32 percent. That is, for every one million viewers a livestream reaches, 320,000 will add the showcased product to cart, proof of China’s live commerce success.
  • Viewers can see products in action. This is particularly helpful for a number of product categories, like colour cosmetics, clothes and furniture, where size, colour and effect aren’t easily discerned from stock photos or videos.
  • Users’ questions about the product can be answered instantly. Everything from “Can we see what it looks like from another angle?” to “Can my toddler eat this?” can be answered directly by the livestream host, or customer service reps who read and answer user comments.

One of the things that make livestream e-commerce difficult to wrap your head around are how people (more specifically, livestream celebrities) act as a storefront and product curator. Normally, that’s done through a combination of shopping centers, branded stores and their knowledgeable sales assistants. Now, it’s in the hands of individual tastemakers. And, as the chart below shows, the amount of transactions flowing through these livestream celebrities can be as much as the annual revenue of a shopping center.

These tastemakers have enormous influence, and that directly translates to lower prices for consumers. In China Livestream e-commerce has gained so much traction because livestream celebrities offer their fans the ‘lowest price on the internet’. That further disrupts physical retail and brings some disruptive forces to existing online stores. And, as you can see from the chart below, lower prices are a key driver behind livestream purchases in China’s more affluent cities.

Livestream e-Commerce Opportunities

Here are a few things to get you thinking about the opportunity of using livestreaming in China, and a few places where AgencyChina might be able to help:

  • See whether livestreaming has hit your product category yet. You might be surprised to find that livestreaming is already an emerging sales channel in your category. Alternatively, you might still have the chance to take an early lead and get your category exposed through live commerce.
  • Work out what role livestreaming plays in your China strategy. Livestreaming is great for taking folks very quickly from awareness, to interest, to purchase. It’s also great at convincing those who are sitting on a potential purchase. But it can’t work in isolation.  
  • Ascertain what talent works best for your brand. With over 4,000 livestream hosts in the Taobao ecosystem, you’re spoilt for choice. Shortlisting talent that’s interested in your product, and cross-referencing that with who’s got the fans, sales skills and partnership acumen is a process that you need to undertake.

That might sound a little overwhelming, but AgencyChina’s here to help, with services that stretch across shortlisting, to strategy, executing strongly with chosen talent.    

3 Things You Must Know About CBD Skincare in China

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CBD Skincare in China

CBD skincare is expected to become a $1.7 billion market in 2025. A key driver of this growth is the healing properties of CBD-infused skincare products, which can help alleviate acne, dryness, inflammation, and sensitivity problems. What about CBD skincare’s prospects in beauty-obsessed China, where women spend more on skincare luxury handbags?

Below, we give you three essential pieces of information about CBD skincare in China. If you’re a CBD-infused skincare brand and would like to know more about what’s possible in China, get in touch with our experts for a free consultation.

There Are Only Three Permitted CBD Skincare Ingredients in China

CBD-infused cosmetics typically use three leading derivatives of the cannabis plant: fruit, seed oil, or cannabis leaf extract. In 2015, China’s State Food and Drug Administration updated the Inventory of Existing Cosmetic Ingredients in China 2015 (IECIC2015) to include cannabis sativa fruit, cannabis sativa seed oil, and cannabis sativa leaf extract. At present, these are the only permitted CBD ingredients that can be used in CBD-infused cosmetic products. Note that CBD ingredients are not permitted to be used in food in China.

China CBD Skincare from Simpcare

Domestic and International CBD Skincare Players Are Active In China

There are a handful of early movers in the market. These include:

  • Simpcare
  • Cannafever
  • INBRIZ
  • Uncle Buds
  • Pacifica
  • NORDICCOSMETICS
  • Revolution

Of these, Simpcare, Cannafever and INBRIZ are domestic players. All three have been backed by local venture capital. International players would be wise to take note of what domestic players are doing, especially around face masks and ampoules. These are product propositions more attuned to the needs of Chinese consumers.

This is to say, incoming international players think about localizing their products and communications if they are to succeed long-term in China. You can use our handy market entry checklist to think about this.

Most International Brands Sell CBD Cosmetics in China Through Cross-Border e-Commerce

China has strict narcotic control laws. Many international brands have decided to sell only through cross-border e-commerce, rather than attempt to import into China and sell through general trade. This is because cannabis ingredients are subject to strict supervision by China’s Public Security Bureau. This makes importing CBD skincare products into China and selling through retail channels very challenging.

Tmall Global has become a go-to destination for beauty brands that want to reach Chinese consumers without going through a litany of red-tape.

Apart from allowing CBD-infused cosmetics brands to sell into China, launching via cross-border e-commerce also has a number of advantages:

  • Test Market Demand: A launch via Tmall Global allows new market entrants to de-risk their entry into China and assess market demand over a 12 or 18-month period, before looking to commit further resources and explore distribution opportunities within China’s massive consumer market.
  • Validate Market Entry Business Case: North American and European brands prefer test-and-learn approaches to market entry. Entry through e-commerce allows brands to gauge what sort of effort and resource commitment they’d need to pursue entry into China. In addition, it also allows newcomers an opportunity to test and finesse assumptions about their unique value proposition, marketing, pricing, merchandising and relative strength against domestic and international competitors.  
  • Build in-Market Presence: Although there are indirect channels to reach Chinese shoppers (like overseas influencers and airport retail), these don’t deliver the return-on-investment that in-market presence does.

 If you’re a CBD-infused skincare brand and would like to know more about what’s possible in China, get in touch with our experts for a free consultation.

Changes To China’s Nutrition Present New Opportunities & Challenges

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Nutritional changes mean China is getting taller

In addition to its e-commerce and marketing services, AgencyChina has a research & strategy team which conducts consumer research and surveys across China. This means we get a front-row seat as to market trends.

Some of China’s inescapable mega-trends over the next ten years involve public health. China’s population is getting taller, wider and older. This challenges existing stereotypes about Chinese people. If existing and new market entrants meet these trends head-on, they’ll be well-positioned in China for long-term growth. However, if they lose track of these trends, they’ll find themselves outmanoeuvred by more responsive competitors.

Read on to find these mega-trends and which sectors they affect.

China’s Population Is Getting A Wider Waist Size

China is probably not the first place you think of when you hear the word “childhood obesity”. Sadly, it’s a growing problem. Presently, one in five Chinese children aged 7 to 18 are overweight or obese, up from 2.6% in 1985.

More critically, China has a childhood obesity timebomb on its hands – it’s projected there will be 62 million obese Chinese children by 2030. For a sense of scale, that’s close to the population of the United Kingdom.

For all the talk of healthier lifestyles, a combination of doting grandparents, snacking, diet changes and less physical activity equals growing waistlines for China’s children.

For anyone involved in food and beverage, this mega-trend should have your full attention. You’ll need to consider rising sensitivities to fat, sugar and preservatives. That means innovating to update your product portfolio, releasing new products for calorie-conscious consumers (and their parents). Keep up to date with our market updates to learn of this area’s preferences, dynamics and potential regulation.

Credit: Getty Images

China’s Population Is Getting Taller

Thanks to years of uninterrupted economic growth and concomitant improvements in nutrition, the average height of Chinese males and females is the tallest in East Asia. Over the past three decades, the average height of 19-year-old Chinese men has increased by a full 8 cm (3.1 inches) and the average height of similar-aged Chinese women by 6.1 cm (2.4 inches).

If you’re in apparel and footwear, this is a mega-trend you absolutely must be adjusting to. The current phase of the fashion cycle, where oversized rules, is kind to those brands who haven’t adapted sizes for China. When the pendulum swings back to slimmer shapes and tight cuts, getting inventory right really matters.

Credit: NPR

China’s Population Is Getting Older

It’s difficult to capture the scale of China’s aging problem without resorting to the well-worn phrase “unprecedented”. By 2050, 330 million Chinese will be over age 65. For a sense of scale, that’s more or less the entire population of the United States. Already, China has the world’s largest elderly population. In 2019, there were 254 million people over 60. That’s 18.1% of the country’s population, according to China’s National Bureau of Statistics (NBS).

The aging crisis impacts many sectors, including real estate, health care, homewares and nutrition. What’s clear is that very few consumer brands have made the effort to understand elderly need states. This can and should change. While undertaking consumer research with China’s pre-retirees and retirees can be challenging, our team has worked on a number of ways to uncover key insights with this group. Let’s talk about it sometime.

Credit: Financial Times

Sweeping population health change means shifts in lifestyles, preferences and opportunity sets. If existing and new market entrants meet these trends head-on, they’ll be well-positioned in China for long-term growth. However, if they lose track of these trends, they’ll find themselves outmanoeuvred by more responsive competitors.

AgencyChina’s Best Articles on China Market Trends in 2020

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Best China Market Articles in 2020

This year has been a tumultuous year. With all that’s been going on, you may have missed some of the great content on China market trends our team has put together over the year. So, we’ve compiled AgencyChina’s top articles over 2020, highlighting a few key China market trends:

China Market Trends for Imported Brands

  • Imported Food: AgencyChina’s Managing Director Jay Xie breaks down the trends he sees in China’s imported food market. Despite being an avid fitness enthusiast, Jay is betting big on imported snack food making a comeback in China. Read here to find out why.
  • Plant-Based Meat: Chinese cuisine already has a number of meat substitutes, like tofu. Tofu-based foods are already commonly seen at breakfasts, lunches and dinners in China. But what are the trends for plant-based meat in China? This article sets you up for cuccess.
  • Petcare: AgencyChina’s Research & Strategy Manager, Michael Norris, relays what trends he and his team of Chinese market research professionals have found in China’s petcare market. Get up to speed here.
  • Haircare: China’s haircare market is significant, and there’s plenty of headroom to grow. Particularly, China has a premature baldness issue, with 250 million Chinese experiencing premature hair loss. Find out all you need to know here.
Source: Shannon Fagan, Getty Images

Trends in Local Chinese Brands

  • China Vitamin & Supplement Startup: We take a look under the hood at BUFFX, a startup that’s changing the way young Chinese consumers engage with vitamins and supplements. It’s one to watch!
  • Upstart that’s beating Nestle in Instant Coffee: We love innovative products that unlock new growth. Saturnbird Coffee (三顿半), a local instant coffee company, is a standout example. In two consecutive Double 11 e-commerce extravaganzas, Saturnbird has taken top spot from Nestle in the instant coffee category. Find out why here.

China e-Commerce Trends

  • Alibaba Wants to Incubate Promising Imported Brands: Alibaba’s cross-border e-commerce marketplace, Tmall Global, announced plans to bring 1,000 new overseas brands onto its e-commerce platform over the next 12 months. This plan falls under Alibaba’s $200 billion, five-year-import program. Find out about the incubation program through our informative article.
  • e-Commerce Livestreaming Is Big: In China livestreaming has found an important role in e-commerce. Last year, Alibaba’s Taobao Marketplace generated more than RMB 100 billion (USD$15.1 billion) in gross merchandise volume (GMV) through livestreaming sessions, an increase of almost 400% year-on-year. This year, that number increased by triple digits again. Understand where all the growth is coming from here.

As always, if you’ve got questions about China, you can schedule a free call with our experts here.

Have a safe holiday period and we’ll see you back on deck in 2021.

New Opportunities In China Imported Food Market

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China is a major food importer. Although the majority of Imported Food To China are meat, dairy, and seafood, there are also signs of broad consumer interest in imported processed foods and alcoholic beverages, among other specialty items. Indeed, in 2019, there were 2,283 kinds of imported foods from 176 countries and regions registered in China’s market access management system.

Imported food is commonplace in Chinese homes. As early as 2015, more than 96% of Chinese households in large urban areas reported buying imported foods or drinks.

So, what’s next for China Imported Food Market?

We sat down with AgencyChina’s Managing Director, Jay Xie, who relayed what he and AgencyChina’s e-commerce team had found as they operated e-commerce operations for a number of international brands.

Below is an edited transcript. If you like what you hear, you can sign up to arrange a free expert call with Jay, now available till February 31. A unique chance to get some great first-hand China knowledge!

Editor: We’ve just had a massive Singles Day. What are some of the imported food trends you observed?

Jay Xie: We saw a confirmation of a few different trends, such as increased in plant-based, organic and functional foods and beverages. Importantly, we saw consumers continue to be adventurous, ordering more products from niche brands from Eastern Europe, the Middle East and Africa. I think this highlights how important cross-border marketplaces are in connecting varied consumer demand with distinctive brands from all over the world.

Editor: What categories of imported food and beverages are you most excited about?

Jay Xie: As an avid fitness enthusiast, I’ve personally witnessed the changes in how China’s consumers approach nutrition. I think there are still many untapped opportunities in food and beverages that support weight loss, muscle gain and sports performance. However, it’s important for incoming brands to note that it might not just be as simple as selling your existing products to Chinese consumers – you will have to localize the product and packaging. 

Having talked about fitness, I also really like the prospects for comfort food. China is a high-pace, high-stress society and I do think that creates pressures which result in snacking occasions. For that reason, I think biscuits and chocolate will continue to outperform.

Editor: One thing we haven’t talked about is early-life nutrition, which is a real strength of AgencyChina. What trends do you see in food for infants, toddlers and children?

Jay Xie: We’re lucky that we operate the online store of one of the top five sellers of infant formula on Tmall. Imported brands continue to have key strengths online relative to domestic competitors across infant formula, baby food and toddler snacks. The three areas where I hope we see more innovation from imported brands to keep their lead is: low-calorie snacks for children, a greater range of fortified food, and incorporation of superfoods.

Don’t forget, you can book a free consult with Jay until February 31st, Book your time now to talk with him and get your China adventure started!

Imported Food Market China - expert call

Chinese Budget E-Commerce Platforms

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We’ve just passed Double 11, the largest e-commerce extravaganza in the world. Given the occasion, we’d be remiss if we didn’t discuss e-commerce. Before we get to our annual summary of top trends, we thought we’d clarify a few things about Chinese budget e-commerce platforms.

China’s e-commerce landscape is rich and diverse. Currently sitting at a quarter of China’s retail sales, China’s e-commerce platforms includes online retailers, marketplaces and affiliate platforms. Within that range, there’s a number of different platforms catering to specific spending habits.

Indeed, one of the key themes over the last two years has been thrift – consumers are looking for the best deals they can find, whether online or offline.

Previously, we’ve talked about Pinduoduo. Pinduoduo, as you may recall, used group-buying as a way to blower prices of items on its platform. There’s also livestream e-commerce, which we’ve covered extensively. One of the reasons livestream has been a breakout hit is because livestream hosts negotiate with brands to guarantee the “lowest price on the internet” for their fans.

Chinese Budget E-Commerce Platforms Pinduoduo

Image: Pinduoduo APP

Below, we’ve categorized China’s budget e-commerce platforms and functions, listing whether they’re suitable or not for brands looking to enter China.

Summary of Chinese Budget E-Commerce Platforms

Platform Description Positives Negatives AgencyChina Assessment
Pinduoduo
Users:
683 million active buyers

Pinduoduo is China’s second-largest e-commerce platform in China.
Pinduoduo has taken the lead on several new trends, including social e-commerce, team purchase, and consumer-to-manufacturer demand models (C2M).

To encourage its users to spend more and buy a wider range of goods on their platform, Pinduoduo has decided to enter cross-border e-commerce. Pinduoduo’s cross-border e-commerce offer is called Duoduo International. Large international brands with multiple distributors must take care to ensure:
(1) no counterfeits
(2) distributors sell on Pinduoduo using an agreed price architecture 		We believe Pinduoduo’s cross-border e-commerce platform, Duoduo International, is a net positive for brands looking for exposure to consumers in China’s lower-tier cities.
Juhuasuan (inside Alibaba)
Users: Undisclosed		Juhuasuan is a marketing platform for flash sales and group-buying deals inside Alibaba. It uses data analytics to offer flash sales to certain sub-segments, such as price-conscious consumers.Juhuasuan is available to most brands who have a Tmall Flagship Store. Using a steady stream of flash sales and group-buying deals to unlock new consumer segments can be seductive, but it doesn’t replace a clear in-market strategy.We believe Juhuasuan should be part of a brand’s mix of e-commerce tactics in China. It’s best used when the brand has a track record of operating on Alibaba’s e-commerce platforms.
VIP.com
Users:
33 million active buyers		VIP is arguably China’s largest online discount retailer. It’s an e-commerce platform that specializes in time-sensitive discounts, called flash sales. VIP typically stocks out-of-season inventory from leading brands.VIP is well known for offering flash sales for branded fashion, home goods, apparel and accessories.Given all other e-commerce platforms have flash sales, the distinctiveness of VIP’s model has diminished over time. We believe VIP is an effective way for fashion and accessory brands to clear excess inventory.
Taobao Deals
Users:
70 million monthly active users		A standalone e-commerce app from Alibaba that sells items under RMB 50.
It is reported Taobao Deals was released to combat Pinduoduo’s stranglehold of consumers in China’s lower-tier cities.		There is limited upside for most foreign brands to place their goods on this platform, unless they specialize in daily essentials, such as toiletries. There is limited possibility for items to exceed RMB 50, in the short-term. We believe Taobao Deals is ill-suited for foreign brands to use.

We trust you found that summary useful. If you’re looking at entry into China via e-commerce, talk with our research and e-commerce teams to work out the best approach for you to gain traction with online shoppers.

New Horizons in China’s Pet Food And Pet Accessories Market

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China’s pet market is booming. The number of pet cats and dogs in China inched towards 100 million last year. Pet-related products are also one of the fastest-growing categories on China’s cross-border e-commerce platforms. We previously published another blog post about how e-commerce is fueling this market. But today we look further ahead.

So, what’s next for China’s pet food and pet accessories market?

We sat down with AgencyChina’s Research & Strategy Manager, Michael Norris, who relayed what he and his team of Chinese market research professionals had found on a few recent projects.

Below is an edited transcript. If you like what you hear, you can sign up to arrange a free expert call with Michael Norris, now available till December 31. A unique chance to get some great first hand China knowledge!

Question 1

Editor: Recently, we’ve seen data out of China’s e-commerce platforms about strong growth in pet food. What’s driving increased pet food spend?

Michael Norris: Obviously you’ve got a lot of new pet owners coming into the category each year, which underpins some of these gains.

There’s also category premiumization, with pet owners looking for better products for their furry family members. Orijen’s explosive growth in China is a great example of premiumization cues – award-winning cat food for different life stages. This is the type of premium proposition that can excel in-market.

China's Pet Food And Pet Accessories Market - Orijen brand store

Finally, and I don’t think it’s talked about quite enough, is the number of two-pet families is growing at a rapid clip. That means you’ve got pet owners increasing the size of their shopping basket online, ordering double what they did previously and maybe doing some pantry stocking during e-commerce promotions.

Question 2

Editor: Apart from pet food, what else is really hot right now in pet-related categories?

Michael Norris: There’s two things our team in China is looking at right now. The first is pet nutraceuticals – vitamins and supplements for dogs and cats. This sub-category is rich with opportunity – joint care, dental care, general wellness, temperament, skin and nails. Because pets are such an extension of the owner’s identity here, you see a lot of mimicry. So, imagine you’ve got a cat owner who’s recently had her teeth whitened. Not too long after her own dental treatment, she’ll start to focus on her cat’s oral care. There are a few cheeky marketing tactics that could be deployed here.

The second is pet tech – automatic feeders, self-cleaning litter boxes, automated ball dispensers and other gizmos like that. One of the interesting things you observe once you’ve been to a number of pet owners’ homes is the incredible interest in gadgetry. Part of that is due to the relative youth of pet owners here – half are under 30 and lead digital-first lives. Accordingly, I have high confidence in products that alleviate timeless pet owner headaches with technology will be a massive hit in-market.

Question 3

Editor: What is something about China’s pet market that people find surprising?

Michael Norris: I think what many folks don’t realize is that pet insurance is just getting started in China.

There are few pet insurance products, and we estimate 98% of pet owners pay medical bills fully out-of-pocket.

Once you have greater levels of pet insurance coverage in China, medical expenses as a proportion of pet care spend will come down, and will be reinvested in more treats, more pet-related services, more nutraceuticals, and more toys. That’s an incredible unlock for the category.

Question 4

Editor: What does AgencyChina do to help brands access China’s pet market?

Michael Norris: AgencyChina is a full-service agency, covering market research, marketing and e-commerce operations. That means we’re in a great place to help new and established brands at any point in their journey.

We can help size up an opportunity and build a business case, use consumer interviews to understand changing needs, create a distinctive brand in-market, or identify which parts of a brand’s e-commerce operations need some fine-tuning.

I always encourage folks to have an open dialogue with us. Let us know where you’re at, and we can see whether we’re a good fit.   

Free consult with Michael until December 31st!

And don’t forget, you can book a free consult with Michael until December 31st, Book your time now to talk with Michael and get your China adventure started!

Ingestible Beauty in China through Cross-Border E-Commerce

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China’s urbanites want to look as good as possible, for as long as possible. Indeed, China’s urbanites spend more on skincare and cosmetics than luxury, according to a study from Kantar. It’s important to note that this skincare spend isn’t just on creams and serums applied to the face, neck, hands and legs. It also encompasses ingestible skincare or edible beauty products. These are catch-all terms that refer to powders, drinks, and supplements that are consumed orally, and target healthier skin, hair, and nails by nourishing the body from the inside out.

Due to counterfeit and safety concerns, savvy urbanites prefer to purchase these ingestible beauty products in China through trusted cross-border platforms, like Tmall Global. This ensures they get access to original label products and can avail themselves of hassle-free customer service if there’s something wrong with the packaging.

With that context in mind, let’s have a look at a few of the edible beauty propositions that are already widely available on China’s cross-border e-commerce platform.

Collagen as ingestible beauty in China

Collagen powders, liquids and tablets are considered by China’s urbanites as one of the major moves to plump up skin and keep it looking youthful. Data from CBN Data and Tmall shows the number of repeat purchases of edible collagen products increased three-fold between 2018 and 2019. This suggests that skin-obsessed urbanites don’t consider edible collagen as a fad. Instead, they’re looking to deeply integrate it into their beauty routine. Which is good news for brands and companies in the industry.

From our analysis of product reviews, and previous projects in the category, imported edible collagen brands that hit the mark with consumers on cross-border e-commerce include:

  • Swisse
  • FANCL
  • Shiseido
  • HECH
  • Floreve
Ingestible Beauty in China Swisse Tmall

Click here for an example of a product page on the Swisse Tmall Global store.

Nicotinamide as ingestible beauty in China

Nope, this is not a typo. Nicotinamide riboside, or niagen, is an alternative form of vitamin B3. It helps many processes inside the body, including some functions associated with anti-aging. Nicotinamide was one of the big hits in edible beauty last year, coming from nowhere to become a sensation among those looking for secrets to staying youthful for longer. As awareness of enzyme helpers increases across consumers in different city tiers increases, these types of “Benjamin Button” supplements will remain in high demand.

Based on yet more analysis of product reviews, and previous research from our team we have listed the imported brands that made their nicotinamide products a success with the Chinese consumers:

  • Blackmores
  • Biocyte
  • For Becared One
  • Doctor’s Best

Click here for an example of a product page of edible beauty in China by Blackmores on their Tmall Global store.

Dietary Fiber as ingestible beauty in China

There’s a lot to unpack in fiber-related supplements. Some consumers use fiber-related supplements for digestive health, others use it to stop feeling bloated, others use them for meal replacement or appetite control, and some use it to remove toxins from the body that compromise skincare outcomes.

When it comes to skincare and fiber-related supplements, the key for consumers is psyllium husk, which helps remove yeast and fungus that often triggers skin conditions like acne or rashes.


For the imported dietary fiber product category, the overseas brands we found that resonated well with the Chinese consumers via cross-border e-commerce platforms are:

  • Metamucil
  • Herbalife
  • Slimfast
  • Fat Blaster
  • Nutrilett

Click here to see a product page of Metamucil on Tmall Global.

Another note worthy player in the market is Pola Orbis. The Japanese cosmetics manufacturer announced that the sales of its edible beauty product had exceeded even their own expectations. It raked in $264 million in sales its first year.

Opportunities in ingestible beauty in China

Each of the above sub-categories are rich with opportunities. Consumers are still discovering the best solutions that work for them, and they’re open to trying niche imported brands through cross-border e-commerce. If you’re looking at this market, talk with our research and e-commerce teams to work out the best approach for you to gain traction with skin-obsessed millennials and urbanites.

What Brands Can Do To Combat Childhood Obesity In China

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China is probably not the first place you think of when you hear the word “childhood obesity”. Sadly, it’s a growing problem. Presently, one in five Chinese children aged 7 to 18 are overweight or obese, up from 2.6% in 1985.

More critically, China has a childhood obesity timebomb on its hands – it’s projected there will be 62 million obese Chinese children by 2030. For a sense of scale, that’s close to the population of the United Kingdom.

For all the talk of healthier lifestyles, a combination of doting grandparents, snacking, diet changes and less physical activity equals growing waistlines for China’s children.

Childood Obesity In China - scale

A scale shows the weight of a child during a weight loss programme at a hospital in Beijing. Photo: AFP

So, what can brands do to help alleviate this health challenge?

Find thoughtful ways to give the issue more airtime

There’s nervousness about the obesity issue. For instance, large retailers are afraid to stock plus-sized children’s clothing, for fear that they’ll be accused of disparaging Chinese children. However, parents’ desire for managing childhood obesity has never been greater.

Opportunity:

This is what leads us to think there’s a massive opportunity to create chat groups in WeChat or even a dedicated online forum or fearless and frank discussion about managing childhood obesity. This is perfect territory for an ambitious nutrition or lifestyle brand to ‘own the space’.

Develop specialized propositions and address unmet needs

The nervousness and shame over obesity means that some products that we might take for granted overseas. Plus-size clothing, low-calorie foods, fitness camps and exercise equipment are all areas where product and brand propositions are underdeveloped.

Opportunity:

This is the opportunity for brands to combine purpose, social good and profit. We like the look of this space, and are actively looking for brands to partner with to take them to the next level in China.

Champion effective interventions

Obesity is a monumental challenge, but there is research that suggests effective interventions in a Chinese context. Universities of Birmingham and Bristol worked with Guangzhou Centre for Disease Control and Prevention conducted a 12-month randomized trial. It promoted physical activity and healthy eating behaviours among the children—discovering significant reduction in weight gain among those participating.

Opportunity:

We do think large brands are well-placed to champion and enmesh themselves in similar interventions.  There are a whole range of digital use cases to record, encourage and reward exercise and healthy eating habits.

Sweeping demographic change means shifts in lifestyles, preferences and opportunity sets. If you’re looking for themes that will grow in relevance to China’s government and people, look no further than childhood obesity.

Prospects For Plant-Based Meat In China

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Have you heard of Beyond Meat and Impossible Foods? If so, chances are you know a little about the market for meat substitutes and plant-based protein. But what are the prospects for meat substitutes and Plant-Based Meat In China?

Read on to find out what China’s market for plant-based meat looks like today, and where it could lead tomorrow.

Growth Tailwinds for Plant-Based Meat In China

Before getting into some of the tailwinds, it’s worth noting that Chinese cuisine already has a number of meat substitutes, like tofu. Tofu-based foods are already commonly seen at breakfasts, lunches and dinners in China. We think this means the barriers for consumers to accept plant-based proteins are lower in China than other countries.

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Indeed, even before the COVID-19 pandemic outbreak, China’s market for meat alternatives was on track for strong growth. Euromonitor, a consultancy, estimated China’s plant-based meat market would grow from around $10 billion in 2018 to nearly $12 billion by 2023.

Now, after the pandemic’s outbreak, a combination of food safety, quality and health concerns will push China’s market for meat alternatives. Here’s a snapshot of why:

  • Government Policy: China’s government was already aiming to cut the country’s meat consumption by 50% before the year 2030. Interestingly, preliminary research suggests the population could be open to eating less meat.
  • COVID-19 Meat Import Halts:  COVID-19 infections at meat processing plants in overseas countries have triggered meat import bans from select countries, such as Germany and the United States.

Combined, these factors will drive increased appetite for changing diet and meat alternatives.

Early Movers for Plant-Based Meat In China

Make no mistake, a race is underway to corner four key segments in China’s plant-based protein market: 

  • Traditional Chinese snacks (ex.: mooncakes)
  • Packaged meat-based snacks (ex.: beef jerky)
  • Plant-based protein for Chinese cuisine
  • Plant-based protein for Western cuisine
Plant-based meat in China image 2

Critically, most domestic players aren’t making burgers and steaks. Instead, they’re instead focusing on local dishes such as dumplings, mooncakes or meatballs, and opting for pork rather than beef flavors.

Plant-based meat in China image 3
Are you looking to find out whether your food or snack brand has a taste profile that works for Chinese consumers? Contact us to see how research solutions like focus groups and product trials might be able to help!

Both Impossible Foods and Beyond Meat have made a splash in China.  Impossible Foods drew long lines and served tens of thousands of samples, including dumplings, meatballs and sliders at China’s International Import Expo last year. After debuting its products with Starbucks, Beyond Meat has partnered with Alibaba-owned supermarket chain Hema to distribute its burger patties to stores in Shanghai, Hangzhou and Beijing.

However, it remains to be seen whether Impossible Foods and Beyond Meat intended to break out of plant-based meat substitutes for Western cooking, or “stay in their lane”.

Having said this, whether domestic or international players, in-market success is far from guaranteed. Companies producing plant-based meat alternatives face three persistent challenges:

Ongoing Themes for Plant-Based Meat In China

Whether pursuing vegetarianism or experimenting with flexitarian dining habits, Chinese consumers will likely have plenty of meatless options to choose from.

What’s particularly interesting about plant-based meat in China is that it marks the intersection of a number of themes in China’s food and beverage market:  safety concerns, changing lifestyles and new preferences.

We’ve seen similar themes in functional dairy and sports nutrition. If you’ve got an interesting food or beverage proposition, talk to us.

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