China’s economic planners have set a 6% GDP growth target for 2021. China, it appears, has shrugged off the worst of COVID-19. This has many brands asking:
Where are the export opportunities to China in 2021?
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 May 31. A unique chance to get some great first-hand China knowledge!
Top Export Product Opportunities in China
Editor: What product categories do you think have the best prospects in China this year?
Michael Norris: I think the pillars for imported brands in China will remain largely unchanged this year – skincare, haircare, pet care and nutrition continue to have strong tailwinds. Principally, the purchasing power of China’s middle-class continues to increase and there’s a universal desire among the type of middle-class consumers we work with to look and feel their best.
However, what we continue to advise new market entrants is China is now a level playing field. That is to say, the ‘halo effect’ imported brands once enjoyed has faded away. As such, brands need to do their homework before they enter.
Top Export Product Niches in China
Editor: Drilling down, what niches do you expect to have strong growth this year?
Michael Norris: There are five niches I really like this year. The first is toothpaste, which is seeing ingredient and format innovation. This driven by a focus on dental beautification – straight teeth and a bright smile.
The next is cat food. Cat ownership is growing faster than dog ownership, and, if current trends continue, cats will become China’s most preferred pet in a year or two.
A further changing preference is perfumes and fragrances. Fragrances are increasingly signifier for style and taste among China’s younger white-collar types, both male and female. Recognizing this demand, Tmall has even opened up a direct air route to carry over niche perfumes by air freight.
When it comes to personal style, we can’t go past hair. I like the prospects of a number of hair care niches, especially anti-breakage and strengthening shampoos. The China Association of Health Promotion and Education reckons that China’s premature hair loss population stands at a whopping 250 million, most of them between 20 and 40 years old. Any help brands can give here is undoubtedly welcome.
I know it’s bigger than a niche, but I do have to say it as it’s one of my favorites: male skincare and cosmetics. We expect the average number of skincare products male consumers to rise from 1.5 to 3.5 over the next five years, which will drive significant category growth.
Advice For Brands Entering China
Editor: What can brands do to keep up with changes in China’s consumer preferences?
Michael Norris: Top performing brands tend to have a strong sense of what they already know and what they want to find out about the consumer. They then craft a research agenda around those things to make sure they keep up to date. There’s a quick mental quicklist anyone can use to start their own research agenda.
- What are the three things you’d most like to know about your Chinese consumers current habits? How are these things important to your business？
- What are the three things you’d most need to learn about to prepare your business for the future?
- What evidence do you have about these things already? How would you rate the quality of that evidence?
- What plans do you have to update existing evidence or gather new evidence?
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.
