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Italy And France, Rivals At The Chinese Grocery Store

Italy And France, Rivals At The Chinese Grocery Store

China is now the biggest grocery market in the world. According to a report released by the authoritative UK-based Institute of Grocery Distribution, its value was of $972 billion last year, slightly more than the $916 billion American grocery market, putting China at the top of yet another list. “Groceries” are a combination of food and non-food household products purchased at stores that mainly sell food, including supermarkets and smaller food markets.

This latest Chinese achievement is hardly surprising; China has more than four times the US’s population and its supremacy should be self-evident, but in fact the backbone of China’s population remains agricultural and self-sufficient, loosely linked to the processing industry. China’s goods distribution system is also far less developed than that of other nations. The increase in the grocery market value has been due to a combination of three factors: overall economic growth, the sheer magnitude of China’s population, and growing food inflation.

More than half of the Chinese population is now urbanized, after an epic migration to the coastal cities. Despite deep cultural roots, the eating habits of hundreds of millions of people have changed, having been presented with different choices. Canned and frozen foods are now commonplace, in a country where traditionally the only solution was to cook fresh products. Supermarkets, malls, and convenience stores now dominate the retail food landscape, which until just a few years ago consisted mainly of neighborhood fresh markets. New, powerful food distribution chains have been created to cater to the needs of young and dynamic citizens living in giant urban centers.

The lifting of legislative restrictions in 2004 following China’s bid for inclusion in the WTO paved the way for international megacorporations, namely Wal-Mart, Metro, Carrefour, and Auchan, to enter the Chinese market with hundreds of outlets. Once catering mainly to foreigners, these stores now appeal to the increasing numbers of Chinese who have spent time abroad and have been exposed to different culinary and nutritional customs. Although completely dwarfed by the Chinese giants, these foreign food chains represent the best vehicle for the sale of western products in China, along with delicatessen stores and non-Chinese restaurants.

Even during the hard times of post-war reconstruction, the Chinese have always been very demanding with regards to food quality. The demand for both healthy and tasty food has not been tempered by urbanization, and has made the Chinese grocery market sophisticated and competitive, a climate in which Italian products have performed quite well. China is now the 18th largest destination of Italian food exports, whereas in 2006 it was 31st and in 2002 it was 62nd.  The most sought-after Italian products are chocolate, pasta, tomato sauce, olive oil, mineral waters, and sparkling wines. Foods “Made in Italy” represent the 2nd largest source of imported food products to China, just after France. The worldwide reputation, prestige, and quality of Italian foods make it easy to imagine that had they been able to count on solid distribution channels, such as those enjoyed by the French, their supremacy on the Chinese market would have been assured.

Alberto Forchielli

About Alberto Forchielli

Alberto Forchielli has written 297 post in this blog.

Alberto Forchielli, born in 1955 - MBA with Honors from Harvard Business School and BA cum laude in Economics from University of Bologna - is Founder, Partner, Managing Director, Investment Committee Member and Member of the Board of Mandarin Capital Partners; Founder and President of Osservatorio Asia, a non-profit Research Center focusing on Asia; Founder and President of Cleantech srl, a renewable energy company mainly focused on developing and managing utility-grade solar energy projects. From July 2012 he is Director of the Executive Council of CEIBS (China Europe International Business School) in Shanghai. Forchielli is an expert in international business development, particularly in China and India, thanks to his strategic abilities based on a 30 years experience. He publishes a weekly release: ‘Notebook from Shanghai’ on Radiocor Il Sole 24 Ore, the largest Italian Financial Press Agency. He also holds weekly interviews on China economy on Radio 24 - Il Sole 24 Ore and he publishes his own Blog on Caixin Media website in China: fugeli.blog.caixin.com/, and his own English blog: www.albertoforchielli.com. Born in Bologna, in his own operative background he experienced working and extensively living in several Countries all over the world: Singapore at Finmeccanica, Washington DC at World Bank, Luxembourg at European Investment Bank, Rome at IRI Group, Turin, Boston and London, Santiago and Lima at Mac Group, Hong Kong and Shanghai at Mandarin Capital Partners.

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One Response to “ “Italy And France, Rivals At The Chinese Grocery Store”

  1. Lucita says:

    Superb report regarding culinary.

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