5 Things You Need to Know Before Investing in the Organic Food Market in China

Nov 21, 2017

logistics and supply chain management

Organic food was earlier seen as a luxury in the Chinese markets, but the recent food scandals in China have resulted in widespread distrust of domestic products among the consumers in China. Due to this, many middle-class Chinese consumers are now ready to shell out extra cash on organic food products and the health food market to overcome the anxieties of domestic food safety. This trend has paved the way for new investment opportunities for foreign investors in the Chinese health food market.

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The Chinese Food Safety Law

The Chinese government has established stringent food safety laws recently. The manufacturers are held accountable for food additives and imposing severe fines for any food safety violations. For people planning to venture into the Chinese food market, this calls for mandatory product regulation and certification, especially for organic food and the health food market.

Food Imports are Trending

The domestic food scandals have opened the doors of the Chinese markets for foreign food products. In the next couple of years, China is expected to be the highest importer of international and organic food products. Edible vegetable oil, cereal, and milk products hold the majority chunk in the foreign food products imports.

The Rise of High-end Specialty Stores

To meet the growing demand for food imports, a large number of high-end specialties have opened up across major cities in China.  Supermarket chains like Walmart and Carrefour food have already stocked up heavily on imported and organic food products and are also taking extra measures to assure food quality. In fact, Walmart sources its organic food products from their own farm cooperatives in China.

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Growing Organic Food Market

As mentioned earlier, Organic food was always seen as a high-end luxury food in China. However, in the recent years, the awareness about food safety has compelled a large chunk of the Chinese population to resort to the health food market. With the growing disposable income of the Chinese consumers, the organic food market is a promising market for investors and manufacturers.

Online to Offline Platforms and Online (O2O) Retailers

The Chinese consumers are increasingly moving to online and O2O platforms to meet their food and beverages demand. Online retailing for health food products is also budding, luring many new players to venture into this market. Online distribution platform is very promising especially in the case of organic and specialty foods as they are more suited to cut product cost and provide more product guarantees.

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