As the Chinese younger generation is living faster lives, domestic and Western ready meals and ready-to-cook dishes are becoming extremely popular in China. Young consumers buy ready-made food to take to work, to the gym, or to give kids lunch at school. With the immense workload, young Chinese people don’t have time or resources (many people live without a kitchen) to cook at home, which creates the opportunity for the ready meals industry.
Statistics show that in 2022, the ready meals sector accounted for 122.40 billion dollars, putting China as the world’s leader in this food industry segment. In this blog post, we will take a look at the ready meals market in China and the reasons for its rapid growth and we will check what possibilities are waiting there for foreign food producers.
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Overview of ready-to-eat meals market in China (2022)
China is the world’s leader in the ready meals industry in terms of net revenue, as this sector accounted for 122.40 billion dollars in 2022, with estimated an annual growth of 9.20% between 2022 and 2027. It’s two times more than Japan taking second place (62.04) and almost three times more than the US (44.87). The growing demand for pre-prepared meals creates amazing opportunities for manufacturers and restaurants that want to sell such products on the Chinese market.
Most ready-made food is bought offline, with supermarkets and grocery stores being the first choice of more than half of the consumers. But online distribution channels such as Chinese online marketplaces and cooking websites cannot be neglected, as most of the consumers with the growing appetite for ready meals are the new generation of young consumers, that are used to buying everything they need online.
Young professionals and children are driving the strong demand for ready meals in China
The main target groups for ready-to-heat meals are young professionals and children, as these segments have disposable incomes along with occupied routines and a need for energy. Young professionals and parents don’t have time to cook at home, hence they are choosing pre-prepared meals cooked in central kitchens.
Additionally, there is a growing group of singles and people who live alone, that often chose ready-to-cook and pre-prepared meals, as they don’t have the need to cook only for themselves or eat out.
The covid-19 pandemic helped the sales growth in the ready meals industry
According to China Daily, people are starting to experiment with ready-to-heat or precooked meal kits, treating them as an alternative to food delivery and cooking. This trend started speeding up especially during the Covid-19 pandemic, as many restaurants and dining halls were closed, leaving people without the convenience of ordering food delivery. In the long run, the scale of China’s ready meals industry is foreseen to reach 3 trillion yuan in annual sales.
Chinese people are becoming more health conscious
This target group is also focused on healthy eating therefore manufacturers must develop packaging which appeals to consumer desire for healthy & nutritious meals and desserts. The growing demand for ready-to-eat healthy food goes together with the growing popularity of a healthy lifestyle, therefore food manufacturers need to focus on producing cooked food that is good for health and promoting such content on their social media and e-commerce accounts, as well as on packaging.
As you can see above, Chinese consumers are becoming more health and environment conscious and the government is also supporting this shift in consumer behavior. Therefore, companies need to focus on offering healthy meals that can cater to all groups, without a focus only on meat and seafood. More and more restaurant chains and supermarkets in main cities offer plant-based meat and vegetarian options, as the market is growing rapidly.
How to sell readymade meals on Chinese e-commerce websites
Western-style readymade meals in China are increasingly popular among high-income netizens. There is also an increasing trend of purchasing online. Mostly readymade pre-prepared, frozen, chilled, or shelf-stable packaged meals that are ready to eat or require limited preparation or additional food ingredients and raw materials are popular to sell online.
The serving size is at least 250g and the example products are frozen dumplings, buns, traditional thick soup, meats, pizza, pasta, shelf-stable canned porridge, and chilled lunchboxes. The size helps in the cold chain logistics of a delivery system.
How to enter ready meals in the China e-commerce market?
There are numerous opportunities in the E-commerce market for international readymade meal brands in China. Although, entering the E-commerce market of China is not easy due to cultural barriers, language differences, and strict e-commerce platform policies.
However, there are solutions among which two are vital. Firstly, international readymade food brands need to have a strong branding of their products and secondly, they need to be present on well-known e-commerce platforms.
Chinese people trust overseas food producers, often even more than their domestic ones, due to many food scandals constantly happening in the country. Therefore, foreign brands have an opportunity to win an audience in China, but they need to do it right.
Branding of readymade meals in China on Chinese E-commerce platforms
Most Chinese consumers show a keen interest in cooked food containing fish, meat, and vegetables. There is a huge potential for manufacturers who can demonstrate high nutritional value in their readymade food products. The company needs to build e-reputation in order to gain popularity among customers.
The marketing campaign must address the need of customers, especially Millenials and Gen Z, as these are the groups highly interested in healthy pre-cooked meals. It is highly important for international companies to understand the local culture and demands before it translates their offerings.
Therefore, when approaching China’s E-commerce, it is advisable to partner with a local digital agency as it is equipped with the right set of skills to find a “sweet spot” between the international brand value and the preference of Chinese consumers. An agency can also help with distribution, which is one of the most needed steps in entering the food & beverage market in China.
How to choose the right marketplace for your ready meals?
China is the country with the biggest amount of online marketplaces and e-commerce platforms that have millions of visitors daily. Therefore, it is important to make the right choice when deciding which platform will be the best option for your brand.
Tmall holds the biggest market share in the e-commerce market of China at 57%. It mainly focuses on premium brands. This characteristic makes Tmall the most expensive e-commerce marketplace in China. It provides an opportunity for international brands to open exclusive online stores and directly sell products to Chinese consumers without being physically present in China.
Tmall has an invitation-only policy where only qualified international brands can either be invited to join or can apply through a local digital marketing agency. For more information on how to sell international products through TMALL, please contact a digital marketing agency.
JD.com is China’s largest online direct sales company. It relatively has less market share than TMALL.com. International companies can open individual online stores on JD.com. JD’s cross-border service enables suppliers to sell directly to Chinese consumers without a local presence. JD.com is less expensive than TMALL.com but the site belongs to one of the most expensive marketplaces in China either way.
Taobao is owned by Alibaba Group, just like Tmall. It offers the largest C2C e-commerce marketplace in China. Taobao allows registered or non-registered businesses to sell directly to consumers. Establishing a store on Taobao is virtually free but the online marketplace is ruled by small sole sellers who compete fiercely on price and honesty and authenticity is an unwritten rule of their trade ethics. Sellers with low-budget and low-quality products opt for this platform.
Pinduoduo is a Chinese group buying platform. It was founded in 2015 by Colin Huang, a former Google engineer. Pinduoduo is one of the world’s fastest-growing e-commerce platforms. In less than three years, it has become the third-largest e-commerce company in China, with over 300 million active users.
Pinduoduo is known for its low prices and its unique “social shopping” experience, which encourages users to invite their friends to join group purchases. It was once focused mainly on food and agricultural products, and many Chinese shoppers still perceive Pinduoduo as a go-to platform for food shopping, which makes it a perfect choice for ready meals.
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