China's Food Sector: Rapid Growth (No Surprise…)

Those of you interested in China’s food industry may want to check out a new paper discussing the current state of China’s retail food sector. The US Foreign Agricultural Service has a great collection of their Global Agricultural Information Network reports (called GAIN Reports). They recently published their new analysis of China’s retail food sector. The review is geared more towards how it affects US producers and exporters, but it has a lot of fascinating detail that will interest any Sinophile as well as China expat. Here are a couple highlights, as discussed on The Packer website (China’s retailers, at least, are fat and happy):

Hypermarkets

Multinational chains such as Carrefour and Wal-Mart benefit from their reputation for offering better quality products than most domestic retailers, thanks to stricter quality control in a country where food safety is a major concern after several disturbing food scandals in recent years. In food products, especially fresh food, hypermarket retailers benefit from better hygiene controls and a higher volume flow rate, and are thus able to ensure better food safety for consumers. As such, an increasing number of Chinese consumers visit hypermarkets instead of independent food stores for grocery shopping. Fresh produce has become an attractive section to draw in Chinese consumers.

New Trends in Retail

Direct sourcing of food and agricultural products from farm cooperatives has been adopted by most retailers in Shanghai and is growing elsewhere. This allows retailers to address consumers‘ concerns about food safety, reduce cost, and possibly improve product quality. On the imported product side, Wal-Mart started to directly source and import U.S. cherries this year. Neighborhood Supermarkets were opened in Shanghai by Carrefour and Tesco this year. These outlets offer low prices and fresh food as their selling points.


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