China’s retail sector recorded $5.4 trillion in sales revenue in 2017, a 10-percent increase from 2016, with similar strong growth expected to have happened in 2018. China is a huge consumption market, but imported food currently only represents a small percentage of the total consumption volume. These low numbers represent high market potential for importing food in the coming years.
Driven by its huge population, urbanization, and the rising per capital disposable income of the growing middle class, China’s demand for imported consumer-oriented food products is expected to grow at a steady pace, according to a USDA Global Agricultural Information Network (GAIN) report.
Chinese consumers’ demand for convenience is driven by busy lifestyle and facilitated by far-reaching digitalization. In 2018, China’s import of consumer-oriented food products reached approximately $45 billion up 18 percent from 2017. Data driven “new retail” formats combining online and offline have a firm footing and are expanding rapidly and creating new competition and challenges for traditional retailers.
Increased tariffs on U.S. products have some retailers looking for substitute products. Opportunities exist for dairy, seafood, nuts, pork and other products.
In 2018, the United States, previously the second largest exporter, became China’s fourth largest food product supplier, behind New Zealand, Australia and Thailand. In total, $3.3 billion of consumer-oriented products were imported from the United States, down eight percent.
China’s total retail sales in 2017 reached $5.4 trillion, up ten percent from the previous year.
China at a glance (2017) is as follows:
- Population: 1.41 billion (four times that of the United States)
- Per Capital GDP: $8,717 (highest in east China, followed by south China and North China)
- Total Retail Sales: $5.4 trillion (second largest market in the world)
- Online sales: $806 billion (representing 15 percent of the total retail sales)
