China is the world’s most populous country and with an economy that is only outperformed by the USA, it is a prime target for UK exporters.
The country is seeing a rise in the middle classes throughout the provinces and with this comes an interest in Western culture, entertainment and products.
Although China has a deeply traditional and unique history, Chinese businesses and the public have created a strong demand for ‘Brand Britain’.
This brand has been often used by new exporters looking to make a mark in the country. Typically, British products are known for their outstanding manufacturing and levels of quality control – something that home-made products do not always possess.
There is also a growing trend amongst the Chinese population to seek out British products that are also organic.
Adam Vines, COO of Join In China, a Gloucester-based company who help provide export contacts, elaborates: “The Chinese mentality is that products from foreign countries tend to be somewhat of a treat. As the rising middle classes get bigger, there is a market for ‘Brand Britain’ organic produce. The logistics of getting fresh food to China have become easier and it will continue like that over the next few years. This will create a bigger market.”
Managing director of Wyke Farms, Rich Clothier talks about his experiences of trading with China: “In terms of the food sector, there is huge growth. One of the drivers is that several provinces are now affluent enough to buy from the west. There has been a huge growth in the middle class and if you look at the University of Chicago data, by 2035, the average Chinese person is going to be wealthier than the average American.
“People are moving from the rural areas to the urban areas as there is more industry and more work. They are more cosmopolitan and more interested in Western products, and in the food sector it means that they are more interested in our products, including organic.”
As with the middle classes in the UK, there is now a growing concern on where our food produce comes from and the affect it is having on the environment and the people who produce it.
This, along with a rise in disposable income, has led to an emerging organic food market for dairy, fish and meat coming from Britain.
Vines comments: “The potential in the dairy market is huge. China is set to be the largest dairy market by 2022. In terms of other growth areas, there is a demand for Scottish salmon and luxury organic food products. They are looked upon as a quality product. The Chinese are very interested in what they are now putting into their bodies and organic food is looked at as a very good source of nourishment.”
Clothier adds: “If we split the organic food into meat and dairy, the Chinese are eating a lot of meat, especially pork type products. The UK meat industry is doing well over there, especially with the lower quality cuts that do not sell as well in the west – things like trotters. There is a lot of value there in the China and Asia market.
“In terms of dairy, China is not very dairy adjusted now, but they are getting there. One of the challenges is that where there is not already a category, it is difficult to build on it.
“In terms of actual trade, it is very exciting. There is something like 1.4 billion people already in China and they are all getting increasingly well-off, and if even 10% of the population move into the middle classes, that is twice the size of the UK. That gives you the true size of the market.
“As they get more disposable income they increasingly look at western products – they want to trust what they are feeding their children. We are very good at bureaucracy in the UK and that gives them some of the assurance that they need. The Chinese respect the fact that we have very high standards of production.”
One of the issues that many, often smaller, companies have faced is the cost and logistics of getting their product on the shelves in China. One of the ways that both the government and export companies have improved this is through specialised bureaucratic and business contacts within certain provinces.
Vines explains: “It has become easier to export to China. There is a Chinese love for organic food, so then it just become about the logistics of getting it into the country and distributed to the different provinces. Companies tend to pick an area that is geographically focused, rather than try and cover the whole country.
“My advice would to be use a specialised business to find those links and help them market their products. You need a good, local partner on your side in China to get your product in front of the right distributors.
“Generally, going through a specialist business will help you with all of the packaging and all the regulations that you need to go through to get your products on the shelves. There are a number of partners which can help, which specialise in food.”
Emerging opportunities in China
Despite the obvious and emerging opportunities within China, a lot of research and preparation is needed in order to understand the habits and traditions of food.
Weetabix tried to enter the breakfast market in the country. Although they received a small amount of success, the company was sold off to a US firm after they couldn’t break the traditional meal of steamed rice and bread. There had been no precedent for a wheat and dairy combined breakfast.
Vines believes this will happen again with British companies looking to make their mark in China. He said: “There are some Western items that will not fit with their culture. The Chinese taste is completely different to ours. They tend not to like food that is sweet. The product needs to be tested so that you have the correct market to enter.”