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5 hot trends in China to watch this year

  • February 18, 2019
  • 4 min read

From wellbeing to the rise of smaller cities, Fonterra China President Christina Zhu looks at some of the developments and disruptions that are affecting consumer behaviour in one of the biggest markets in the world. 

Nothing sits still in China for long. Trends come and go, and consumer tastes are constantly evolving.

Here are five trends that are capturing the imaginations of consumers in China and creating food for thought for executives. 

Happy girl with milk and cookies

1. The rise of "smaller" cities

China’s urbanisation rate is expected to grow to 70% in 2027, but not in the way we might expect. That growth is expected in third and fourth tier cities, which are currently home to around 300 million people.

This rising force is largely untapped, so expect to see brands and businesses shift their attention to cities like Hefei, Xiamen, Chengdu and Qingdao as consumers wanting a break move from the big centres but expect the same choices as their counterparts.

On average, third and fourth tier cities spend more online than their urban counterparts, and their online spending is growing faster.

2. Digital Transformation

A massive 800 million people use the internet every day to read, be entertained, socialise and purchase online. Expect this huge e-commerce market to play an even greater role in China’s retail market in 2019 – particularly in mobile commerce.

Anyone who has purchased on AliExpress or Joybuy.com will know how easy it is to scour, select and buy products on mobile. The frequency of mobile purchases now eclipses offline purchases. Roughly 52% of Chinese consumers use mobile devices to shop every week – much higher than the global average of 14%. Over 90% of consumers are omni-channel shoppers.

Connected to a myriad of social platforms, consumers share their favourite products with their friends, so brands need to think about how to leverage social platforms to help spread the word.

Over half of our Anchor sales are made online and we expect this to grow as food, along with luxury and sports products, are tipped to be the next big segment to see breakthrough growth this year.

3. Wellbeing in focus

Health has always been a big focus for Chinese but they’re now looking to balance their busy lives with a more well-rounded lifestyle. Wellbeing is in.

It’s being partly driven by rising incomes, particularly among younger Chinese consumers who are looking for brands and products that help them manage a healthier lifestyle while on the go.

As consumers focus on lighter enjoyment, we’ve seen them look lower fat options. For example, in beverages, we’ve seen Anchor’s Skim UHT milk jump to number one place.

Digital technology and apps are a big driver of this trend, allowing consumers to better balance and monitor their diet, fitness and overall wellbeing.

Globally wellness is valued at around $3.72 trillion, so expect Chinese consumers to want a bigger share of this market. 

Fonterra farmer feeding cows with grass

4. Driving enjoyment

Another trend to watch out for is how the “New Retail” juggernaut continues to delight and disrupt the consumer shopping experience. New Retail is redefining commerce by engaging with shoppers seamlessly across offline and online.

It’s growing rapidly at impressive rates and is driving retailers and brands to make the whole shopping experience more enjoyable for consumers. Over 80% of food and beverage consumers will only choose a product they love.

Among the many innovations in New Retail, two key areas to watch in 2019 are fresh food and the online-to-offline experience. In China, nearly 60% of daily foods are sold in supermarkets and marketplaces, while e-commerce only accounts for 7%. This leaves plenty of space for expansion – so watch this space.

Happy girl with milk and cookies

5. Personalisation is king

Finally, with so much on offer, expect consumers to demand more personalised products and services.

Bespoke products are no longer just for high-luxury brands. On the horizon is data-driven personalised offerings and companies creating products that fit individual consumers’ needs.

93% of Chinese consumers are plugged into their mobile devices creating a wealth of data for brands to learn and develop new products from. Crowdsourcing will help shape everything from product packaging to customised products.

We all wish we had a crystal ball so we could predict the opportunities ahead.

The key thing to remember is that Brands and businesses compete fiercely Chinese consumers’ attention and dollars, and the ones that will do well in 2019 and beyond will be delivering localised products specific to the China market.