Chinese develop a taste for healthy food and drinks
Consumer product makers must adapt to changing preferences to succeed
Guangzhou East Railway Station is an overland gateway to Guangzhou, the capital of China's Guangdong Province. The station is the terminus for trains bound for Dongguan, Shenzhen and Hong Kong. It has helped drive the economic growth reflected in the high-rise buildings offices and hotels that began appearing in the 1990s.
Subways also use the station, which is crowded with commuters during the morning and evening rush hours. At one entrance to the station, a huge sign advertises new low-sugar and sugar-free herbal tea products under the Wanglaoji brand.
Wanglaoji is a pioneer brand in Chinese health drinks. Its herbal tea is touted as being effective in cooling the "hot energy" that accumulates in the body after one eats spicy, pungent food, such as Sichuan cuisine and Mongolian hot pot. The main product is heavily sugared. However, low-sugar and sugar-free Wanglaoji drinks, released last year, are very popular. Orders exceeded 10,000 sets on the Tmall retail website on the day of the release.
Chinese diets are rapidly changing as people become increasingly health conscious. While sales of sweets and ice cream fell more than 11% in 2015, sales of yogurt jumped 20.6% and those for functional beverages were up 6%.
On the Taobao online shopping mall, sales of goods associated with health-related search terms such as "organic," "nongenetically modified" and "low-fat" are reportedly growing. Sales of nuts, which are seen as healthier than other kinds of snacks, have shown the highest growth. Sales of the famous Three Squirrels (Sanzhisongshu) online brand of nuts exceeded 5 billion yuan ($728 million) in 2016. Sales of organic foods top 30 billion yuan, and production of organic vegetables, rice, tea leaves and fruit is growing at an average annual rate of over 30% by volume.
Consumers increasingly prefer natural and healthy products when it comes to cleaners and personal care products. Procter & Gamble and Unilever maintain huge market shares, but they are seeing a continuing decline in sales, while healthier products, such as handmade soaps using natural materials and silicone-free shampoo, are growing in popularity.
Chinese consumer tastes are changeable. In recent years, "health" has attracted attention as a keyword. Companies need to consider this trend, as well as their own strengths in developing products that meet market needs.
Kosuke Okame is a Shanghai-based business and market research consultant.