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China’s Packaged Food Market: Consumer Dairy Product Preferences

In China, the market demand for milk, traditionally seen as the source of a great variety of nutrients, has always been steady. In recent years, a wide range of dairy products, with varying nutritional content, has been launched onto the mainland market. Respondents to a recent HKTDC Research survey on the mainland packaged food market [1] had bought an average of 3.37 types of dairy products in the three months preceding the survey. That’s a notable increase on the figure of 2.39 recorded in a similar 2013 survey.

The market for ultra-high temperature processing (UHT) yoghurt, ranking as the second most frequently bought dairy product, has been expanding rapidly, while the purchase frequency of cheese / butter has also seen a marked growth. Apart from brand and word-of-mouth, manufacturing date and expiry date and nutrition are also consumers’ primary considerations when buying dairy products.

UHT Milk Most Popular

The market demand for milk, traditionally seen as the source of a great variety of nutrients, has always been steady. In recent years, a wide range of dairy products, with varying nutritional content, has been developed on the mainland, which has, in turn, nurtured greater demand for such products. The survey found that the purchase frequency of dairy products has been on the rise, with 83% of respondents having bought such products more often than two to three years ago. Respondents bought an average of 3.37 types of dairy products in the three months preceding the survey, more than the 2.39 types reported in a similar 2013 survey. Among the different types of dairy products, UHT milk is the most popular item, with 76% of respondents having purchased it in the preceding three months.

In focus group discussions, it was discovered that the rise in popularity of UHT yoghurt is the biggest change in people’s consumption of dairy products. Following the launch of UHT yoghurt and the huge investment in advertising and promotion by leading dairy product brands in China, the UHT yoghurt market has been growing rapidly. Respondents pointed out that yoghurt is not only available in a wide range of new flavours and novel packaging, but also provides more nutrients for children. Hence, it has won the hearts of children and attracted more purchasers. Overall, 74% of respondents have purchased UHT yoghurt / probiotic drinks, with yoghurt products scoring the highest growth in purchase frequency among the different types of dairy products.

As consumers have become more familiar with western lifestyles, their demand for western food (including food for breakfast and other meals) is expanding, which has in turn boosted the demand for cheese and butter. According to the survey, 38% of respondents purchased cheese / butter in the preceding three months, more than double the 17% recorded in the 2013 survey. Female respondents tend to buy more refrigerated probiotic drinks, refrigerated milk, cheese / butter, and adult milk powder. Respondents with a higher income also tend to buy more cheese / butter.

Chart: Dairy Products Purchased in Past Three Months
Chart: Dairy Products Purchased in Past Three Months
Table: Dairy products purchased in past three months (by city)
Table: Dairy products purchased in past three months (by city)
Table: Dairy products purchased in past three months (by gender, age and income)
Table: Dairy products purchased in past three months (by gender, age and income)

 

Dairy Products Purchase Criteria

The survey found that the most important factor consumers take into consideration when buying dairy products is brand / word-of-mouth recommendation. However, compared with 2013, among the top three considerations in buying dairy products, manufacturing date and expiry date and nutrition have replaced texture and flavour and raw materials used. This indicates that fresh and nutritious is now one of consumers’ prime dairy products purchase criteria. Moreover, the importance attached to quality certification, packaging design / small packs / convenient and hygienic, new products / new flavours has also increased. However, compared with 2013, the emphasis placed on texture and flavour, raw materials used and price has declined.

Chart: Dairy Products Purchase Criteria
Chart: Dairy Products Purchase Criteria

Appendix

Survey Background

Thanks to rapid urbanisation and rising incomes, China’s packaged food market has grown steadily over recent years. Today, mainland consumers place more emphasis on “food safety” and “healthy diet”. A more westernised lifestyle also has an impact on packaged food market development, offering opportunities for Hong Kong and international brands keen to enter or further expand into the mainland market.

The economic and social environment on the mainland has undergone significant change over recent years. To provide a useful reference for Hong Kong companies interested in venturing into the mainland market, HKTDC Research conducted a consumer survey in October 2017 to gauge the changes in consumer preferences, spending mentality and trends of the mainland packaged food market. This updates the findings of a similar study commissioned in 2013.

Packaged foods consist of numerous varieties. The survey covers five major categories, namely dairy products, seasoning products and sauces, snacks, grains, oils and dried products, and convenience food (including chilled and frozen food).

Methodology

The survey was carried out during October 2017 in 10 major mainland cities. A total of 2,400 consumers were polled by online questionnaire. Before conducting the questionnaire survey, six consumer focus group discussions were held in Shanghai, Wuhan and Chengdu (two in each city). The objective of the focus group discussions was to further understand mainland consumers’ spending mentality by way of qualitative analysis.

Table: Design of Focus Groups
Table: Design of Focus Groups
Table: Design of Online Questionnaire Survey
Table: Design of Online Questionnaire Survey
Table: Average Monthly Household Income of Respondents
Table: Average Monthly Household Income of Respondents
Table: Marital Status of Respondents, by City
Table: Marital Status of Respondents, by City
Table: Education Level of Respondents, by City
Table: Education Level of Respondents, by City
Table: Occupation of Respondents, by City
Table: Occupation of Respondents, by City

[1] See Appendix for details of the survey. See China’s Packaged Food Market: Major Consumer Trends, China’s Packaged Food Market: Defining Characteristics (Part 1) and China’s Packaged Food Market: Defining Characteristics (Part 2) for details of major consumer trends and characteristics of the market.

Content provided by Picture: Billy Wong
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