China's economy is seeing signs of growth after turbulent years. The uptick is driven, in part, by many consumer trends, one of them is their inclination to purchase fresh and healthy produce and retail goods.

Researched released by Ipsos China shows that total retail sales of consumer goods have been on the rise since hitting a low point during the pandemic. In 2020, retail sales of consumer goods fell to USD 5.5 trillion.

The latest data shows this number has risen to USD 6.6 trillion in 2023. 

Tonnies Feng, executive director of Ipsos said during his presentation at the Global Cherry Summit 2024 that growth in the last three years has been “turbulent.” 

“We project that GDP this year will grow 4.8%,” Feng said. “We call this cautious optimism, considering the corrective trend since the pandemic.”

The consumer confidence index shows a downfall since the pandemic, falling from 121.2 points in 2020 to 88.8 in 2023. 

Government actions to boost consumption

Feng shared some of the initiatives that the Chinese government has taken to enhance consumption. 

In 2023, the Ministry of Commerce organized 300 events to boost consumer behavior. 

“We called it the year of consumption boost, with the government adopting 20 new policies including subsidizing promotion campaigns and consolidating online transaction protection,” Feng said. 

Recovery of the consumer market

Index, per capita consumption expenditure showed an increase of $5,200 since 2019. Between 2022 and 2023, expenditure increased by 9.2%.

“We can say that China’s consumer market is embarking on a development path, forging ahead in the short term, despite challenges,” Feng said. 

Feng added that the recovery of the consumer market signals expansions in market demand and the fresh food industry can anticipate a larger market potential and growth opportunities.

The executive director said that by identifying macroeconomic forces in the country throughout the decade, they can understand the reasons behind changes in consumer behavior in the fresh fruit industry. 

“We have identified four megatrends in China that impact our society, markets, and people,” Feng said. 

Four Macro Trends in China

The first macroeconomic trend identified by Feng is rapid urbanization, which increased 66% last year, causing migration to cities, shifting social structures, and leading people to pursue a higher quality of life.  

He explained that urban residents place greater emphasis on health and high quality, thereby stimulating demands for organic and natural fruits.

Ipsos data shows that 45% of Chinese consumers are purchasing more products with health benefits and that 51% are exploring the impacts of the products on their bodies. 

The second trend is the rise of Gen Z as the main consumer force, which are increasingly getting empowered as the main consumers, setting trends and shifting ideologies, making up 24% of the country’s total population. 

“This generation demands immediate satisfaction of demand, meaning zero delayed shopping experience, for which e-commerce is very useful,” Feng said.

Ipsos found that 89% of Gen Z consumers would try a new food based on its novel packaging.

This age group is the main one showing chilean cherries and other fruits on social media, sharing their enthusiasm about the product. 

Additionally, technological advancements are rapidly expanding the online market for fresh produce as well as cold chain and logistics technology. 

Ipsos data shows that online retail sales in 2023 reached $511.5 billion, a 66.6% growth year-on-year.

In the same period, data registered 513 million new e-commerce shoppers, an 11.5% increase year-on-year. 

“We project a 13% year-on-year growth for the fresh e-commerce market in China this year,” Feng said. 

Feng also added that Chinese consumers are increasingly more aware of the environment, caring for sustainability and reducing their waste. 

“We see increasing concern for environmental protection and sustainable development leads to a rise in demand for fruits that are organic, pesticide-free, and additive-free,” Feng said. 

Ipsos data shows that 81% of Chinese consumers are against excessive packaging, preferring biodegradable and recyclable materials. 

Opportunities and challenges in China

Feng gave members of the cherry industry and fresh produce a few tips to succeed and grow their participation in the Chinese market. 

He said they must capitalize on the “single economy,” and lay out smaller packages and customized packaging to entice these segments and communicate the organic and natural images with consumers.

Growers and exporters must also leverage the shift towards self-gratification and instant gratification and implement marketing strategies that cater to the personalized and social aspirations of Gen Z, as well as the need for zero-delay shopping experiences.

Prioritizing omnichannel integration to meet diverse consumer needs and grab a slice of the “home-based economy,” especially social commerce and live-streaming shopping will also help grow participation. 

Finally, he said they must build a strong value proposition rooted in social responsibility such as “green sustainability” to win brand recognition, possibly by reducing excessive packaging and/or advocating for the use of recycled packaging.

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