The China Frozen Food Market is a "Hot" One

As Chinese people live a faster modern life, spending long hours at work and on public transport, they don&#;t have time to cook at home and don&#;t always feel like eating out. Because of that reason, China&#;s frozen food market is growing rapidly, with a compound annual growth rate of more than 12%. However, there are many challenges that foreign companies face when trying to enter the Chinese frozen food industry.

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In this blog post, we will discuss some of the key factors you need to consider when entering China&#;s frozen food market. We will also provide some tips on how to overcome these challenges when promoting frozen food companies on the Chinese market. So if you are thinking of entering the China frozen food industry, then keep reading!

China Frozen Food Market Dynamics

The Frozen Food market in China is expected to reach more than USD 26,492.8 Million by , driven by a massive demand for the frozen food sector. Chinese people are becoming more and more sophisticated consumers, so they pay extreme attention while making food purchases. This trend is expected to win the market of frozen food products in China over the coming years.

The target for this industry can be further extended to schools, military camps, tourism, the fast food industry, and other fields which will provide an opportunity for expansion. The Key Players are building intelligent giant factories and storage to focus on cold storage transport, and usage of high-quality ingredients to boost China&#;s frozen food industry growth.

Over the years, the industry of frozen food production in China has developed rapidly. The change in Chinese consumers&#; eating habits has driven the demand upward and China is likely to fulfill the growing demand. Packaged frozen meals, chilled, or shelf-stable that are ready to eat or require additional food ingredients will continue to will become the major drivers of the growth of frozen food consumption rates.

Covid-19 helped in boosting frozen food sales

As everywhere else in the world, China was also fighting the Covid-19 virus outbreak. One of the most critical factors of frozen food markets&#; rapid development was lockdowns, which made people stay at home without any way to go shopping or eat out. This resulted in a higher market demand for cold stored food with prolonged shelf life, as no one ever knew how long each lockdown will last. The frozen product market scale started growing in and is continuously growing ever since.

It is predicted that in the future, post-pandemic Chinese people will be looking for ways to shorten food preparation time without sacrificing quality. As such it can be expected that they will prefer frozen offerings which remain convenient and fresh even after one year since the purchase. Although a lot of people prefer the fresh produce of meals cooked at home, they will gladly shorten the preparation time with the usage of half-done frozen products.

What are the driving elements of the Chinese frozen food market?

In a country where going every day to the market to purchase fresh ingredients is still the mainstream, it&#;s legitimate to ask yourself the reason for the growth of the frozen food industry.

Today, Millennials have a dynamic lifestyle with lesser time available for cooking fresh food and this is the major driving factor for the significant growth of the frozen food market in China. The convenience of frozen food is the key factor that is expected to drive the frozen food market growth over the forecast period.

Hypermarkets, Supermarkets, and convenience stores in China are expected to reach maximum profit margins owing to the sourcing of Chinese frozen food. Chinese mentality about food, diet and eating patterns is changing. Better quality, healthier ingredients, and more reliable nutrition are becoming a new movement in China food production. A different type of frozen food is being added to Chinese grocery lists, creating new opportunities for frozen food companies.

Market Size of Frozen Food Industry by Type in China

The top leading companies in the Chinese frozen food market include Sinian, Sanquan Food Co Ltd, Apex Frozen Foods and Longfeng. However, since the frozen food market is growing, adding up new types of frozen foods, there are a lot of new frozen food companies being launched every year. Only in , there were newly registered companies that sell frozen food products in China.

Although most Chinese families still prefer to buy traditional frozen foods from various local cuisine, such as glutinous rice balls, fish balls, or traditional Chinese rice puddings, there are a lot of modern frozen foods that attract attention among Chinese consumers.

One of the frozen food types that are seeing rapid development in China&#;s frozen food market share is ready-to-eat frozen meals. According to research firm Mintel, this sector will gain huge market share over the next years, with fish singled out as a potentially high-value category. We have noted several areas where demand is skyrocketing:

&#; Breakfast meals &#; 42% growth predicted between -
&#; Low calorie/healthy options &#; 39% growth predicted between -
&#; On-the-go meals &#; 31% growth predicted between -
&#; Kids&#; meals &#; 28% growth predicted between -

China Frozen Food Market: most popular segments

When it comes to the most popular segments of the frozen food industry in China, Chinese consumers usually chose from:

• Frozen ready meals
• Frozen pizza
• Frozen meat
• Frozen fish/seafood
• Frozen potato products
• Frozen bakery products

In the future, frozen potato products are expected to be the fastest-growing segment of the frozen industry in China, owing to ease of consumption and cooking, followed by frozen meat and frozen ready meals. Other segments of China&#;s frozen food market which include soups, fruits, and vegetable products are expected to show faster growth than bakery products.

According to the Chinese urban consumer preference and shopping behaviors, about 48% of Chinese people purchase frozen pork, and 70% of the Chinese population believes that food safety is more important than its price. China has had a lot of scandals regarding food safety in recent years, and that&#;s why Chinese consumers are very conscious of China&#;s food market.

Frozen fish/seafood

One of the biggest segments with a considerable market share in the frozen food market in China is the segment of frozen fish and seafood, which are seeing significant growth over recent years. Chinese middle class is growing and Chinese people spend more and more on food. As high-quality frozen fish and seafood are treated as delicacies, the demand is growing year by year.

For example, &#;Pollock&#;, roughly $883 million worth of frozen Alaskan pollock reaches Chinese shores each year. Moreover, cuttlefish and squid shipments amount to $445 million annually. Cod fish&#; scores are also comparable.

High-end product varieties, such as king crab and lobster, are also seeing an overall distribution channel development. A taste for more gourmet varieties is present, especially in urban areas. Frozen crab exports to the Chinese market rack up $170 million in revenues annually. China also imports roughly half a billion dollars worth of lobster, including rock and Homarus species, each year.

Doing Business in China is not that hard!

With rising disposable income and growing urbanization, China is expected to become a key driver in the purchasing power of frozen food products. China is a good market for the rapid expansion of food outlets along with reduced tariff barriers on frozen food imports by the government. However, the price of frozen food products from multinational brands is still very high in China but sophisticated health-conscious Chinese consumers are ready to spend their money on the quality provided.

Non-vegetarian frozen products also represent the major market share owing to the growing preference and influence of western food services. This trend is encouraged by the expansion of the western restaurant and this is expected to boost the demand for imported seafood such as sushi, platters, lobsters, and oysters.

How to sell frozen food in China?

The frozen food market in China is booming and it offers a lot of new opportunities for domestic and foreign companies. New trends and lifestyle choices of Chinese people work in favor of the frozen food industry, as people tend to look for fast and convenient ways to eat high-quality meals. Further, the overall distribution channel development existing in the realms of the frozen food industry in China is boosting the market expansion readily.

Although the frozen industry occupies a considerable position in the food market in China and offers a lot of opportunities, there are some key factors to consider if you want to start selling frozen food to Chinese people. Here are some of the key considerations;

Sellers and Distributors

Choosing the right seller or distributor is essential for every type of business in China and the frozen food industry is no different. The task is not easy and it is crucial to make a proper market analysis before choosing a partner to work with, as he will be the connecting point between us and the market in China.

Is it advisable to work with a marketing agency that can help with choosing the right partner for your business in China? They can help with finding potential distributors (in both online and offline distribution channels) and take care of the relationship with them.

Supermarkets and hypermarkets are expected to enjoy maximum profit margins representing big opportunities for new international frozen food players to establish their business. Local players can further grow their market with in-store promotions and on-site demonstrations.

Offline distribution is still the leading distribution channel in China and is expected to show decent growth in the future. Having an online distribution channel is also very important to extend your business in China and is expected to grow in the future owing to an aging population that prefers to buy online instead of visiting stores. Due to the huge internet and smartphone usage among young Chinese consumers, having an online distribution channel is something essential to winning the market.

Our experience and our contacts with distributors are right for you if you want to have a successful business in China.

E-reputation and Branding

One of the characteristics of the Internet is that every piece of content leaves a lasting trace over time. On the web, everything that is published on websites and web pages can be found through search engines, even after many years.

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Therefore, it is important to take care of the e-reputation of your brand. Most of the popular online distribution channels let people leave comments and recommendations, so make sure all the comments about your brand are positive and will have a good impact on potential customers. Take care of your brand&#;s image, and try to be visible and recognized on Chinese marketplaces and on social media.

Today more than ever, e-reputation is a fundamental parameter for the success of brands, companies, and professionals. Chinese people usually scroll the Internet for recommendations and other users&#; opinions before buying a service or product, when planning a trip, or orient themselves to vote during the elections. Make sure you maintain a good reputation across all online distribution channels of your brand.

It is also important to have a strong image that is constantly promoted in a positive way, so as to find the best distributors in the frozen food market in China.

Social Media Presence

Almost the whole Chinese Internet population is on Wechat, the biggest messaging app and social media platform in China, with 1.26 billion monthly active users. WeChat offers a lot of features that help companies build brand awareness and sell their products in China, such as WeChat Official Accounts, WeChat stores, or WeChat Payment methods. While entering the Chinese market, being on Wechat is a step that you should never omit, if you want to stay in touch with your audience and build trust.

There are many other platforms that are used by millions of Chinese users every day. You can market your products via short articles on Weibo, amazing photos and user recommendations on Little Red Book, short videos on Douyin, and so on. The possibilities are endless and we can help you with tailoring the best marketing strategy for your frozen food business.

Influencers&#; Collaborations

Like in the West, nowadays influencers are the driving force on all social media and China is no different. Chinese KOLs (Key Opinion Leaders) and KOCs (Key Opinion Consumers) have huge following bases and can help your brand build awareness and trust among Chinese people. They can market your products through photos, videos, and live streams, bringing new customers in abundance.

Selecting the right influencer for your marketing campaign can bring you great sales and recognition that will help you get a name in the Chinese market.

Trade Shows and Exhibitions

Although digital communication is essential when doing business in China, an offline presence is also very important when selling food on the Chinese market. And the best way to enter China&#;s food market is through fairs and exhibitions held in major Chinese cities, like Guangdong, Shenzhen, and Shanghai.

In this kind of show, you can integrate any kind of communication. Our advice? Always show your QR code at these fairs to integrate online and offline experiences for the Chinese audience.

Take a chance in the Chinese frozen food industry

China&#;s frozen food market is growing fast, especially after the Covid-19 pandemic, which is also the case in the Western world. Chinese middle-class&#; earnings are rising and so are their concerns about food safety and quality. They want to eat better, they care about their health, and prefer to spend more money on good-quality food without the need to spend more time preparing their meals. There is more and more room for new players in the frozen food market, as frozen food sales are rising year by year. If you&#;re thinking about entering China&#;s frozen food sector, now it&#;s the right time for you!

Need help with entering China&#;s frozen food market? Contact us!

We are a China marketing agency with more than 70 Chinese and foreign marketing professionals with years of experience in helping companies enter the Chinese market. We can help you build your China marketing strategy, build your Chinese website, find Chinese distributors or help with finding the right online distribution channel for your brand.

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Fruit market in China can be divided into three different submarkets: fresh fruit, dried fruit and frozen fruit markets. However, this report will focus on the fresh fruit market due to three main reasons:

• Quantities for frozen and dried fruits imported into China from the EU are very low or even non-existent.
• The consumption of dried or frozen fruits in China is low and the market is not growing. On the other hand, fresh fruit consumption in China is growing steadily, especially for premium and imported fruits.
• Distribution channels work different for each market. E-commerce platforms, convenience stores and fruits shops are the main channels for fresh fruit, while frozen fruit is mainly sold in supermarkets and hypermarkets and dried fruits in convenience stores to be consumed as a snack.

Production of fresh fruit in China follows the same seasonality as EU producers, making local fruit production the main competitor for EU fruit exporters and leaving a narrow market niche for EU fruits, mainly in the premium segment.

In addition, there are also technical barriers from Chinese authorities to export fruit to China. Firstly, China needs to sign a bilateral agreement (export protocol) with the exporting country, which specifies the fruit species and other export requirements. After this agreement is signed, companies need to be approved and registered annually and follow the requirements on the protocol and by Chinese Customs to export to China.

Once the fruit arrives into China, it needs to be distributed to reach the final consumer. The vast majority of the imported fruit goes through wholesale markets to local distributors and then to retail, although some large platforms or hypermarkets take care of their own imports and fruits go directly from the port to their shelves. Fruit stores, E-commerce platforms and convenience stores are the fastest growing sales channels for fruit, E-commerce having the largest offer of imported fruit.

Main drivers for fruit consumption in China are appearance, flavour and price although country of origin and packaging affect consumers purchasing decision too.

This 66-page market report covers the following aspects:

• Market Size
• EU Fruits Performance in China
• Drivers of Fruit Consumption in China
• Distribution Channels of Imported Fruits in China
• Differences Between Fruit Retail in China and the EU
• Case Studies
• Import Duties
• Recommendations for EU SMEs
• Tradeshows
• List of Frozen and Dried EU Fruit Protocols

About the Authors

Daniel J Pedraza Nogueira, China Director at Eibens Consulting

Daniel Pedraza is Director for China at Eibens, a consulting firm specialized in China&#;s agrifood industry. Eibens assists private companies and government trade promotion agencies dealing with market access issues and trade compliance. It also supports their business development and communication efforts in traditional and online channels.

He is a specialist on trade compliance and marketing for foreign F&B companies in China. He is also responsible for Eibens day-to-day business operations in China.

Daniel has lived and worked in China for over 6 years. Prior to joining Eibens, Daniel worked for the European Union Chamber of Commerce in China and EXTENDA, the trade promotion agency of the Government of Andalusia-Spain in Beijing. He holds a master&#;s degree in International Business from EOI Business School and a Double BA in Business Administration and Economics from the University of Malaga.

Liam Jia, Business Development Advisor at EU SME Centre

China expertise: market entry strategy, cross-border e-commerce, food & beverage, marketing strategies for SMEs.

Liam is a versatile self-starter and an avid learner with working experience in advising European businesses in market access and business strategies in China. Solid experience in the EU working context over the past 5 years and in all aspects of large-scale events and trade mission organisation and management. Liam manages as well, a large network of EU-Sino field experts serving the demands of business enquiries from European SMEs.

Prior to joining the EU SME Centre, Liam served as the Marketing and Membership Manager at the Benelux Chamber of Commerce in China.

This report was published during the EU SME Centre in China Phase II (-), which was funded by the European Union (ICI+//346-276).

The report was drafted in collaboration with external creators, who worked under service agreements with the Consortium running the EU SME Centre Phase II. The copyrights and intellectual property of this publication belong to the Consortium partner China-Britain Business Council. The latter was authorised by and acted on behalf of the Consortium running EU SME Centre in China Phase II. The China-Britain Business Council, which is currently part of the Consortium running the EU SME Centre in China Phase III, has granted the rights of use of this report to the current Consortium. The report is therefore re-published and made available during the EU SME Centre Phase III.

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