The Snacks Market in China - CCILCccilc.pt/wp-content/uploads/2017/07/SNACKS.pdf · 2019-09-17 · introduction, China is one of the countries with the lowest sugar consumption per

© EU SME Centre

The Snacks Market in China

January 2019

November 2018

© EU SME Centre

This EU SME Centre Market Access Guide was written by:

Daniel J Pedraza Nogueira, China Director at Eibens Consulting

Domenico Di Liello, Business Development Advisor at EU SME Centre

Giulia De Paolis, Project Assistant at EU SME Centre

Liam Jazcii, Knowledge Centre Coordinator at EU SME Centre

Disclaimer

This document is provided for general information purposes only and does not constitute legal, investment or

other professional advice on any subject matter. Whereas every effort has been made to ensure that the

information given in this document is accurate, the EU SME Centre accepts no liability for any errors,

omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of

any individual, firm, company or other organisation mentioned. Publication as well as commercial and

non-commercial transmission to a third party is prohibited unless prior permission is obtained from the EU

SME Centre. The views expressed in this publication do not necessarily reflect the views of the European

Commission.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use

of them does not imply any affiliation with or endorsement by them.

EU SME Centre – The snacks market in China

© EU SME Centre

Table of Contents

1. Introduction ................................................................................................................................... 2

2. Segmentation ................................................................................................................................. 3

3. Categories ...................................................................................................................................... 5

3.1. Chocolate ........................................................................................................................................... 5

3.2. Sugar confectionary ........................................................................................................................... 8

3.3. Other sweet confectionary ............................................................................................................... 11

3.4. Nuts, seeds and rice crackers ........................................................................................................... 14

3.5. Chips and savoury crackers ............................................................................................................. 17

3.6. Dried and preserved food................................................................................................................. 20

3.7. Yoghurts ........................................................................................................................................... 25

3.8. Others .............................................................................................................................................. 27

4. Imports ......................................................................................................................................... 28

5. Duties and taxation ...................................................................................................................... 41

6. Sales channels .............................................................................................................................. 44

6.1 Brick-and-mortar retail ..................................................................................................................... 44

6.2 E-commerce ...................................................................................................................................... 52

7. Labelling ...................................................................................................................................... 53

7.1 Imported snacks labels design .......................................................................................................... 53

7.2 Biscuits label example: ..................................................................................................................... 55

7.3 Changes ahead: ................................................................................................................................. 55

8. Key takeaways ............................................................................................................................. 56

9. Annex .......................................................................................................................................... 57

9.1 Further reading ................................................................................................................................. 57

9.2 Exhibitions ........................................................................................................................................ 57

9.3 Useful websites ................................................................................................................................. 59

2

1. Introduction

Consumption habits among Chinese urban population are rapidly changing. Consumers are now looking for

convenience and are eager to taste new products. The growth in sales of snacks is a response to both trends,

since urban consumers spend less time eating due to, among other reasons, the extraordinary long commute

times –almost two hours per day in Beijing or Shanghai-1.

While European countries lead global rankings in sugar consumption2, China is one of the countries with the

lowest consumption per capita at 15.7 grams –less than a sixth of that of the Netherlands or Germany-. This

has a massive impact on the type of snacks Chinese consume and the quantities. Chocolate, sugar or other

sweet confectionery are less important as snack categories in China when compared to Europe. However, due

to the mere size of the market, even niche segments represent big opportunities for EU SMEs.

Snacks are a broad food category composed of many sub-categories with different market sizes, performance

and characteristics. This report takes that into account and incorporates the particularities of Chinese eating

habits to analyse the “snack” category as a whole, while providing specific insights into each of the segments.

A store check in several locations in Beijing has been carried out for this report. Most of the pictures and some

of the data included have been obtained from this store check, which does not intent to be an exhaustive

analysis of retailers nationwide, but a representation of the reality of China’s snack market.

1 South China Morning Post (27-1-2015)

https://www.scmp.com/news/china/article/1692839/beijingers-lead-chinas-pack-longest-daily-commute

2 The Washington Post (5-2-2015)

https://www.washingtonpost.com/news/wonk/wp/2015/02/05/where-people-around-the-world-eat-the-most-sugar-and-fat

/?utm_term=.57e906d90330

https://www.scmp.com/news/china/article/1692839/beijingers-lead-chinas-pack-longest-daily-commute

https://www.washingtonpost.com/news/wonk/wp/2015/02/05/where-people-around-the-world-eat-the-most-sugar-and-fat/?utm_term=.57e906d90330

https://www.washingtonpost.com/news/wonk/wp/2015/02/05/where-people-around-the-world-eat-the-most-sugar-and-fat/?utm_term=.57e906d90330

3

2. Segmentation

It is appropriate to start this report by defining what is a snack. The Oxford Dictionary3 defines it as:

“Snack: a small amount of food eaten between meals.”

This broad definition—especially considering current eating habits—is easy to understand but more difficult

to narrow down.

The “snack market” is very diverse. It is composed of many different product categories and the

characteristics of each one may be very different, even if they are all considered snacks. There is no consensus

on what categories are included. For example, are yogurts snacks? Well, they could be, they can be eaten

between meals or as a dessert. Are bakery products a snack? They are often consumed as breakfast and

desserts, but also between meals.

Another difficulty to define what food categories are snacks, is that eating habits change regionally. People

from one country may snack on a specific category that may not even exist in others. For example, Chinese

snack on chicken feet, while Europeans do not. Also, the same product can be consumed as a snack in one

place, while in other could be eaten more as part of a meal. For example, Chinese are increasingly consuming

cheese, but mostly as part of pizza, sandwiches and desserts, almost never as a snack between meals.

Therefore, it is imperative to segment the “snack market” in China into different categories to be able to

analyse it and extract valuable conclusions for EU SMEs. This segmentation will allow us to go into the

specific characteristics of each category.

The segmentation proposed in this report is the conclusion of an in-depth research of primary and secondary

information sources, based mostly on field work. However, there might be other segmentations equally valid,

since there is always a certain level of subjectivity implicit when deciding whether to include a category.

We have divided China’s snacks market into eight categories:

Category Includes:

Chocolate • Chocolate confectionary

• Chocolate candy bar

• Chocolate bar

Sugar confectionary • Candies

• Gum

• Sugar fruit

Other sweet confectionary • Sweet biscuits

• Waffles and wafers

• ‘Pretzel’ sticks

Nuts, seeds and rice crackers • Nuts

• Seeds

• Rice crackers

3 Oxford Dictionary https://en.oxforddictionaries.com/definition/snack

https://en.oxforddictionaries.com/definition/snack

4

Chips and savoury crackers • Potato and corn chips

• Popcorn

• Savoury crackers

Dried and preserved food • Dried fruit

• Dried vegetables

• Dried seaweed

• Dried meat

• Dried seafood

Yoghurts • Creamy yoghurt

• Liquid yoghurt

Others • Cereal bar

5

3. Categories

All the categories and sub-segments listed before are explained in this epigraph. There is a breakdown of some

key data (number of Stock Keeping Units, percentage of Stock Keeping Units over the retailer’s snacks total

and percentage of imported Stock Keeping Units) for four out of the five sales channels analysed—all but

e-commerce. The reason is that everything that is sold in the other four is also sold in e-commerce. The offer

for any given category in any large e-commerce platform is so huge that it does not make sense to include it in

this analysis.

3.1. Chocolate

3.1.1. Chocolate confectionary

In this sub-segment, chocolate is combined with other ingredients and sold in small pieces in different-sized

packages. Chocolate confectionary is commonly sold in boxes, which are relatively larger than in other

chocolate products in combination with relatively high prices. Products in this segment can be consumed as an

easy snacking option, for on-the-go or home consumption and, due to its often-luxurious features, boxing and

pricing, it is also a popular gifting option. In most retail channels, chocolate confectionary is the most

frequently found form of the chocolate category. Well-known players offering chocolate confectionary

products are Ferrero Rocher, Hershey, Malteser, Dove, generally produced locally.

Price and sizes: 10 RMB for 3 pieces box, 20 RMB for 6 pieces box, 4.5 RMB for 40 gr, 16.8 RMB for 160 gr

Formats: Small pieces with different shapes in a larger package

Main brands: Ferrero Rocher, Hershey, Malteser, Dove

Number of Stock Keeping Units (SKUs), percentage of SKUs over the retailer’s snacks total and percentage

of imported SKUs per sales channel

Local

supermarket

Specialty

supermarket Hypermarket CVS

SKUs (count) 13 50 50 15

% / Snacks 4% 6% 4% 4%

Imported <5% >75% 5-25% <5%

6

3.1.2. Chocolate candy bars

This sub-segment refers to bite-size (50 gr) rectangular chocolate bars combined with other ingredients, such

as peanuts, caramel, biscuit or coconut. They are sold individually or in packs of all types (boxes, cubes and

bags). The main difference with the previous sub-segment is the format (small rectangular bars) and that they

are also sold individually. International brands (Dove, Mars, Snickers, Twix, Bounty and KitKat) dominate

this sub-segment and thus, products sold in China vary very little from what can be found in most Western

markets, but they are not imported, they are produced domestically.

Price and sizes: 4-5 RMB for 35 gr and 7-8 RMB for 70 gr

Formats: rectangular bars wrapped in plastic. Sold individually and in packs of different counts and types.

Main brands: Dove, Mars, Snickers, Twix, Bounty, KitKat

Number of SKUs, percentage of SKUs over the retailer’s snacks total and percentage of imported SKUs per

sales channel

Local

supermarket

Specialty


SKUs (count) 8 20 15 15

% / Snacks 3% 3% 1% 4%

Imported <5% 5-25% <5% <5%

7

3.1.3. Chocolate bar

This sub-segment includes dark, milk and white chocolate bars, mixed sometimes with other ingredients,

mostly nuts in small quantities. Chocolate is sold in blocks of 100-125 gr, being this the main difference with

Europe. It is very uncommon to find any bar larger than that. The offer is increasing fast, nowadays it is

possible to find most of the same brands and flavours sold in Europe. Most consumed option is milk

chocolate, followed by dark chocolate, while white chocolate is not too common. Prices are considerably

higher than in Europe and depend greatly on the origin of the chocolate, e.g. Russian chocolate is cheaper than

Swiss chocolate.

Price and sizes: 20-30 RMB for 100 gr

Formats: Blocks with a plastic or carton package

Main brands: Dove, Cote D'or, Hershey, Lindt, Meiji


sales channel

Local

supermarket

Specialty


SKUs (count) 5 60 50 15

% / Snacks 2% 8% 4% 4%

Imported <5% >75% <5% <5%

8

3.2. Sugar confectionary

3.2.1. Candies

This sub-segment includes hard and soft candies; whose main ingredient is sugar. As mentioned in the

introduction, China is one of the countries with the lowest sugar consumption per capita. Candies were not

traditionally consumed in China, most famous domestic brands developed in the second half of the past

century, such as the iconic White Rabbit Creamy Candy. In recent years, Chinese consumers are becoming

more and more health-conscious4, and now showing the candy’s fruit content percentage is a common feature

in the packaging. There are both domestic and foreign brands (mostly from other Asian countries) competing

in the market, producing very similar products. However, candies produced in China can be found more easily

than those imported. Most frequent package sizes are 50 and 100 gr. Although most candies are sold in plastic

bags, there are also some packed in small plastic jars or tubes.

Price and sizes: 10-12 RMB for 100 gr and 5-6 RMB for 50 gr

Formats: Small bags, plastic jars or tubes

Main brands: White Rabbit Creamy Candy (大白兔奶糖), Skittles, Bonumee, Haribo


sales channel

Local

supermarket

Specialty


SKUs (count) 35 52 254 50

% / Snacks 11% 7% 20% 12%

Imported <5% >75% 5-25% 25-50

4 McKinsey. 2017 China Consumer Report

https://www.mckinsey.com/~/media/mckinsey/featured%20insights/china/double%20clicking%20on%20the%20chinese

%20consumer/double-clicking-on-the-chinese-consumer.ashx

https://www.mckinsey.com/~/media/mckinsey/featured%20insights/china/double%20clicking%20on%20the%20chinese%20consumer/double-clicking-on-the-chinese-consumer.ashx


9

3.2.2. Gum

Same as in Europe, chewing gums in China have generally two different shapes: dragées and thin, flat slabs,

although some new shapes, such as cubes, can also be found in the market. Dragées are packed in small plastic

jars or bags, and slabs are sold in paper packages, normally in a plastic bag including 4-5 paper packages.

Regarding flavours, in addition to mint and strawberry, which can also be seen widely in Western countries,

brands have adapted to Chinese tastes and offer a huge variety of flavours like lychee, grapefruit, peach and

even flower flavour. Products are both domestically produced and imported. Generally speaking, Wrigley

(market leader) chewing gums are produced locally, while Stride gums are imported (most frequently from

Thailand). Prices are lower than in Europe.

Price and sizes: 8-9 RMB for 56 gr (40 dragées) jar or 3-4 RMB for 5x3 slabs/bag

Formats: Small plastic jars or bags sold individually or packs including 4-5 smaller paper packages.

Main brands: Wrigley and Stride (Cadbury)


sales channel

Local

supermarket

Specialty


SKUs (count) 20 8 40 30

% / Snacks 6% 1% 3% 7%

Imported <5% 5-25% <5% <5%

10

3.2.3. Sugar fruit

This sub-segment refers to the fruit that has been processed and sugar has been added. In general, there are

fewer options available for sugar fruit than for dried fruit, and it is, in most cases, domestically produced by

local brands, such as Jinye and Yida. Sugar fruit is sold in small resealable bags.


Formats: Small resealable bags

Main brands: Jinye, Yida


sales channel

Local

supermarket

Specialty


SKUs (count) 6 6 30 20

% / Snacks 2% 1% 2% 5%

Imported <5% <5% <5% <5%

11

3.3. Other sweet confectionary

3.3.1. Sweet biscuits

Sweet biscuits can be found easily in any shop in China and is one of the snacks categories with the highest

number of SKUs in the retail point of sales analysed. As a widely consumed product, there are many Chinese

brands producing sweet biscuits, some of them for over 30 years already. Except for those sold in specialty

supermarkets and in the imported product section of hypermarkets, most of the sweet biscuits, even if

produced by foreign brands, are produced locally. Sizes vary a lot depending on the point of sale, having

specialty supermarkets and hypermarkets bigger sizes to be consumed at home; while local supermarkets and

convenience stores tend to have smaller packs, for consumption on-the-go.

Price and sizes: For imported, 25-30 RMB for 150 gr, for domestic 7-10 RMB for 150 gr

Formats: Plastic package with a plastic tray inside to separate biscuits or individual packages of 2 or 3 biscuits

inside a bigger package.

Main brands: Silang, Kangshifu, Walkers, Gullón, McVities, Oreo, ChipsAhoy, Khong Guan


sales channel

Local

supermarket

Specialty


SKUs (count) 40 100 110 40

% / Snacks 13% 13% 9% 10%

Imported <5% >75% 25-50% 5-25%

12

3.3.2. Waffles and wafers

Waffles and wafers, although can be found in Chinese local supermarkets and in convenience stores, are not a

product that Chinese people consume frequently. This is why they are mostly sold in specialty stores and

imported product section of hypermarkets. Most common flavours are chocolate, lemon and tiramisu.

Regarding packaging sizes, sweet wafers are normally sold in 45, 125 or 250 gr bags, while products from

Nabati brand can be found in many different sizes from 58 gr bag to 560 gr box with individual packages

inside. Foreign brands most commonly found in China for wafers are Loacker and Nabati, although there are

also some local brands, such as Garden.

Price and sizes: 22-25 RMB for 125 gr, 5-7 RMB for 50 gr

Formats: Large and medium sized packages for consuming at home and small on-the-go packages

Main brands: Loacker, Nabati, Kooper, Garden (嘉顿)


sales channel

Local

supermarket

Specialty



% / Snacks 1% 3% 3% 1%

Imported <5% >75% 5-25% >75%

13

3.3.3. ‘Pretzel’ sticks

Although ‘Pretzel’ sticks in Europe are almost limited to classic flavours, such as chocolate, matcha,

strawberry or cookies and cream, in China, producers have adapted to local tastes and ‘pretzel’ sticks can be

found in dozens of different flavours, from banana and cream, milk or coffee with milk to pizza, chocolate

with red wine, salad, seaweed or spicy prawn flavours. Prices are low and depend on the flavour, ranging from

5 to 7.5 RMB approximately for a 48-gr box. The most important brands in the Chinese market are Pocky,

Pejoy and Pretz, all of them owned by the Japanese company Glico. However, most of the ‘pretzel’ sticks sold

in China are produced domestically.


Formats: Carton boxes

Main brands: Pocky, Pejoy and Pretz


sales channel

Local

supermarket

Specialty


SKUs (count) 21 - 20 20

% / Snacks 7% - 4% 5%

Imported <5% - 5-25% <5%

14

3.4. Nuts, seeds and rice crackers

3.4.1. Nuts

Nuts is largest sub segment among all analysed. It’s so big that even some retailers have their own retail

brand. The nuts most frequently consumed in China are macadamia nuts, pine nuts, pecans and almonds5.

There are many different brands, the vast majority are Chinese and most of them advertise the foreign origin

of the nuts if that’s the case. Packaging sizes greatly vary, ranging from small resealable bags for consumption

on-the-go to medium-sized cans and large plastic jars for consumption at home.

Price and sizes: 28-30 RMB for 200 gr, 35-40 for 300gr, 75-80 for 560 gr

Formats: Small resealable bags, cans, large plastic jars

Main brands: Jiazhouchuanye, Dan-D Pak, A’gan, Etfin Princess, Planters, Saiweiguan


sales channel

Local

supermarket

Specialty


SKUs (count) 13 58 85 30

% / Snacks 4% 7% 7% 7%

Imported <5% >75% 25-50% <5%

5 https://www.ptnpa.org/news/416803/Nut-Sales-Surge-in-China.htm

https://www.ptnpa.org/news/416803/Nut-Sales-Surge-in-China.htm

15

3.4.2. Seeds

Seeds most commonly sold in China are sunflower seeds, pumpkin seeds and watermelon seeds. Seeds are

consumed frequently as snacks while waiting for food in a restaurant or having a relaxed talk with friends.

They are normally slightly flavoured, either salty (salt and pepper) or sweet (caramel, fruit) and sold in 285-gr

brownish plastic carton bags. The most important brand in this sub segment is Qiaqia (洽洽).

Price and sizes: 13.5-15 RMB for 285 gr, 7.5-10 for 250 gr

Formats: Plastic carton bags

Main brands: Qiaqia, Ganyuan


sales channel

Local

supermarket

Specialty


SKUs (count) 11 4 42 12

% / Snacks 4% 1% 3% 3%

Imported <5% >75% <5% <5%

16

3.4.3. Rice crackers

Rice crackers are mostly (or even completely) produced in China by Chinese brands. Crackers are very light;

therefore, packages are generally large, with many smaller packages of 2-3 crackers. There are two main

shapes and flavours, rounded-shaped rice cracker has a sweet flavour and rectangular-shaped has a salty and

spiced flavour. Prices are higher than for savoury crackers (made from wheat flour).

Price and sizes: 18.5-20 RMB for 360 gr, 25-30 RMB for 560 gr

Formats: Small bags of 1-2 units inside larger bags and plastic jars

Main brands: Wangwang


sales channel

Local

supermarket

Specialty


SKUs (count) 3 - 28 -

% / Snacks 1% - 2% -

Imported <5% - <5% -

17

3.5. Chips and savoury crackers

3.5.1. Potato and corn chips

This sub segment is one of the largest. Potato and corn chips can be found in any food shop selling

pre-packaged food and they normally occupy a large area (at least four shelves). They are mainly produced in

China, even for foreign brands, except for those new to the market or those sold in specialty stores. Foreign

brands dominating the market are Doritos, Lays and Pringles, while domestic brands are Yatudou and

Haoyouqu. Generally speaking, there are three different packaging sizes, even for the same product. Flavours

are varied, from the classic flavours in Western countries (original, cheese and sour cream and onion), to some

flavours adapted to Chinese taste (cucumber, prawns, seaweed, durian and even hotpot).

Price and sizes: 5-6 RMB for 70 gr, 8-10 RMB for 145 gr, 12-15 for 180 gr

Formats: Plastic bags

Main brands: Lays, Doritos, Yatudou, Pringles, Haoyouqu


sales channel

Local

supermarket

Specialty


SKUs (count) 50 180 120 65

% / Snacks 16% 23% 10% 16%

Imported <5% >75% <5% 5-25%

18

3.5.2. Popcorn

This sub segment includes both ready-to-eat popcorn and corn specially prepared to make popcorn, although

they are really differentiated from each other. Ready-to-eat popcorn is produced in China, normally has a

sweet flavour (caramel or sweet cream) and commonly there are two types of packaging: resealable plastic

jars in smaller quantities (100 gr), and plastic bags for larger quantities (260 gr). On the other hand,

microwave popcorn is imported, packaged in carton bags inside a carton box and the most popular flavour is

butter. Main brands of popcorn sold in China are Marswell, Bobocorn and Act II.

Price and sizes: 10-12 RMB for 100 gr and 13.8-16 RMB for 260 gr (ready-to-eat) and 15-20 RMB for 255 gr

(microwave)

Formats: Resealable plastic jars, bags and carton bags inside carton boxes

Main brands: Marswell, Bobocorn, Act II


sales channel

Local

supermarket

Specialty


SKUs (count) 1 12 12 -

% / Snacks <1% 2% 1% -

Imported <5% 50-75% <5% -

19

3.5.3. Savoury crackers

Except for specialty stores, savoury crackers (also named soda crackers) are normally sold in four different

flavours: salt, green onion, sesame and salmon. Although few brands compete in the market, flavours are the

same for all of them. The standard size is 100 gr; it can be sold individually for consumption on-the-go or in

larger packages for consumption at home. Specialty stores sell many more different brands, formats and

flavours (such as rosemary). Main brands for savoury crackers are Pacific, Garden, PopPan and Ritz.

Price and sizes: 2.8-4 RMB for 100 gr, 10.2-15 RMB for 400 gr, 14.4-20 RMB for 600 gr

Formats: Bags, sold individually or in larger plastic or carton packages

Main brands: Pacific, Garden, PopPan, Ritz


sales channel

Local

supermarket

Specialty



% / Snacks 1% 3% 3% 1%

Imported <5% >75% <5% <5%

20

3.6. Dried and preserved food

3.6.1. Dried fruit

Dried fruits are gaining traction as snacks in China, in part due to the increasing health concern among

Chinese consumers. Also, thanks to the geographic proximity to South East Asian countries, many tropical

fruits can be introduced to China. There are many dried fruits sold in China as snack. The most popular are the

Chinese date and some Chinese plums, followed by banana, mango, durian and many others. Prices depend on

the origin and brand, but are relatively high compared to other snack categories. Most brands use small

resealable bags of 50-60 and 120-150 gr.

Price and sizes: 12-15 RMB for 65 gr, 20-25 RMB for 120 gr


Main brands: Vinamit, Sabava, Fresh Gravitational


sales channel

Local

supermarket

Specialty


SKUs (count) 9 31 44 10

% / Snacks 3% 4% 4% 2%

Imported <5% 50-75% 25-50% <5%

21

3.6.2. Dried vegetables

This sub segment, although present across all channels, is one of the smaller within the snack category. The

most common products are a mix of dried vegetables including cucumber, carrot, mushrooms, sweet potato,

green beans, among others and flavoured broad beans. Dried vegetables sold in China are produced in the

country and are normally sold in small resealable bags for consumption on-the go. The brands most frequently

found in the analysed points of sale are Ganyuan and Dakouchicai.

Price and sizes: 20 RMB for 60 gr (vegetable mix) and 6.8 RMB for 138 gr (broad beans)


Main brands: Ganyuan, Dakouchicai


sales channel

Local

supermarket

Specialty



% / Snacks 2% 1% <1% 3%

Imported <5% <5% <5% <5%

22

3.6.3. Dried seaweed

Seaweed is common as a flavour -as mentioned before, there are seaweed flavoured chips and ‘pretzel’ sticks-

and a snack when dried. It is also flavoured (classic flavour, cheese flavour, Japanese sauce flavour, seafood

flavour and spicy flavour). In general, convenience stores and local supermarkets sell domestic products,

while specialty supermarkets and hypermarkets have a larger offer of imported product. Most common

packaging are small resealable bags or bags inside a carton box. Most frequently found brands are Big sheet

and Sweet hour.

Price and sizes: 22.8 RMB for 40 gr

Formats: Small resealable bags or bags inside a carton box

Main brands: Big sheet, Sweet hour


sales channel

Local

supermarket

Specialty



% / Snacks 2% 2% 2% <1%

Imported <5% 5-25% 25-50% <5%

23

3.6.4. Dried meat

Having dried meat as snack is very common in China. It is a relatively large sub segment, similar to the size of

chocolate candy bars sub segment. It is a very local product, therefore it is produced domestically. There are

many different products included in this sub segment, from chicken feet, to duck neck and shredded pork

meat. Dried meat is normally sold in small resealable bags for consumption on-the-go and most common

brands are Youyou and Ziyan Foods.

Price and sizes: 25 RMB for 180 gr, 18 RMB for 95 gr


Main brands: Youyou, Ziyan Foods


sales channel

Local

supermarket

Specialty


SKUs (count) 15 24 96 27

% / Snacks 5% 3% 8% 7%

Imported <5% <5% <5% <5%

24

3.6.5. Dried seafood

Along with dried vegetables, dried seafood is one of the less frequently found sub segments. As it happens for

the dried meat sub segment, this includes many different products –for example roasted cod fillets, fish tofu or

shredded squid-. Except for specialty supermarkets, it is mainly produced in China and sold in small

resealable bags for consumption on-the-go. Main brands are WinZen and Beihai.

Price and sizes: 10 RMB for 85 gr


Main brands: WinZen, Beihai


sales channel

Local

supermarket

Specialty



% / Snacks <1% 1% 1% 1%

Imported <5% >75% <5% <5%

25

3.7. Yoghurts

3.7.1. Creamy yoghurt

Yoghurt is probably the category that changes the most –compared to Europe- towards being a snack. In the

case of creamy yoghurt, cups are a little larger to reach a small meal size compared to their traditional dessert

size, and they normally have a small foldable spoon sold together with the yoghurt to facilitate its

consumption on-the-go. Prices for this kind of cups are around 6 RMB (180 gr). Flavours range from the

traditional ones in Western countries (mainly fruits and berries) to some adapted to Chinese tastes, such as red

dates. Most frequently found brands are local (Herun, Weiquan, Mengniu, Yili and Sanyuan) but there are also

some foreign brands competing in the market (Yoplait, Yoginos, Elle&Vire and Pascual).

Price and sizes: 6 RMB for 180 gr, 10.9 for 360 gr, 15 RMB for 910 gr

Formats: Bottles and cups (including a spoon)

Main brands: Herun, Weiquan, Mengniu, Yili, Sanyuan Yoplait, Yoginos, Elle&Vire and Pascual


sales channel

Local

supermarket

Specialty


SKUs (count) 18 67 50 21

% / Snacks 6% 8% 4% 5%

Imported <5% 50-75% <5% <5%

26

3.7.2. Liquid yoghurt

As it has been mentioned in the previous sub segment, China’s liquid yoghurt also shows certain

characteristics different to Europe. Bottles or briks sizes are smaller than in Europe and include a straw to

make them consumption ready. Flavours are similar to those in creamy yoghurt. Most frequently found brands

are local brands (Herun, Purjoy and Mengniu). Foreign brands have a reduced presence in this sub segment.

Price and sizes: 7 RMB for 230 gr, 8.9 RMB for 330 gr

Formats: Small and big bottles, bags and small bricks including a straw.

Main brands: Herun, Mengniu, Purjoy, Sanyuan, Yili


sales channel

Local

supermarket

Specialty


SKUs (count) 29 16 40 16

% / Snacks 9% 2% 3% 4%

Imported <5% 50-75% <5% <5%

27

3.8. Others

3.8.1. Cereal bar

Cereal bar presence in Chinese points of sale is still very limited and products can only be found in specialty

stores and hypermarkets. Products are imported and there are few brands competing, mainly Nature Valley,

Alpen, Go ahead and Nice&Natural. As these are imported products, flavours, brands and sizes are the same

as those sold in Western countries. Cereal bars are packed individually in plastic bags and then packed inside

a large carton package. Prices vary depending on origin and brand, but average price is around 29 RMB for

110 gr.

Price and sizes: 29 RMB for 110 gr

Formats: Bars individually packed in plastic bags inside a large carton package

Main brands: Nature Valley, Alpen, Go ahead, Nice&Natural


sales channel

Local

supermarket

Specialty


SKUs (count) - 26 8 -

% / Snacks - 3% 1% -

Imported - >75% >75% -

28

4. Imports

The categorisation of snacks made in this report is based on the definition of “a small amount of food

consumed between meals”. Therefore, snacks have been categorised based on consumption patterns. This

criterion does not match well with the harmonised system used in international trade, which is mostly based

on the main ingredient of the product. Consequently, analysing import data for snacks is difficult and

imprecise, especially for some categories.

In some cases, the snack product represents a tiny portion of the HS Code. It happens in the case of popcorns,

included in the HS code 1005 Cereals; maize (corn). China imported almost 3 million tonnes in 2017, worth

about USD 600 million. It is evident that the vast majority of that amount does not correspond with popcorns.

In some other cases, a very detailed breakdown of HS codes (8 or more digits) could make possible to find

more relevant information, but there is no import data available for such breakdown.

However, after making some adjustments, it is possible to make equivalences between the classification used

in this report and HS codes. This allows us to get an understanding of the size of the market, the evolution and

the main origins for some categories.

Category Sub-category HS codes

Chocolate

Chocolate

confectionary 180631 + 180632 Chocolate and other food preparations

containing cocoa; in blocks, slabs or bars, filled, weighing 2kg or

less

Chocolate candy

bar

Chocolate bar

Sugar

confectionary

Candies 170490 Sugar confectionery; (excluding chewing gum, including

white chocolate), not containing cocoa Sugar fruit

Gum 170410 Sugar confectionery; chewing gum, whether or not

sugar-coated, not containing cocoa

Other sweet

confectionary

Sweet biscuits

1905 Bread, pastry, cakes, biscuits, other bakers' wares, whether

or not containing cocoa; communion wafers, empty cachets

suitable for pharmaceutical use, sealing wafers, rice paper and

similar products

Waffles and

wafers

Sweet ‘pretzel’

sticks

Nuts, seeds and

rice crackers

Nuts 0801 + 0802 Nuts; fresh or dried, whether or not shelled or

peeled:

Seeds N/A

Rice crackers 1905 Bread, pastry, cakes, biscuits, other bakers' wares, whether



29

similar products

Chips and savoury

crackers

Potato and corn

chips

200410 Vegetable preparations; potatoes, prepared or preserved

otherwise than by vinegar or acetic acid, frozen

Popcorn 100590 Cereals; maize (corn), other than seed

Savoury crackers

1905 Bread, pastry, cakes, biscuits, other bakers' wares, whether



similar products

Dried and

preserved food N/A

Yoghurts

Creamy yoghurt 040310 Dairy produce; yoghurt, whether or not concentrated or

containing added sugar or other sweetening matter or flavoured or

containing added fruit or cocoa Liquid yoghurt

Other Cereal bars 190490 Food preparations; cereal or cereal products (excluding

maize), in grain form, pre-cooked or otherwise prepared.

30

Let’s see the evolution of the imports and the main origins for each of the sub-segments.

HS Code 180631 Chocolate and other food preparations containing cocoa; in blocks, slabs or bars, filled,

weighing 2kg or less

Evolution of China’s imports

Source: own elaboration based on data from UN Comtrade

Top 10 origins of imports in 2017

0

2

4

6

8

10

12

14

16

0

20

40

60

80

100

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M

Thousand tonnes USD M

Country Thousand

tonnes USD M

Russian Federation 7.5 20

USA 0.6 7

Italy 0.9 7

Germany 0.8 7

Belgium 0.2 5

Rep. of Korea 0.8 5

Austria 0.6 3

Turkey 0.9 3

Australia 0.5 3

France 0.1 2

Rest 1.7 11

TOTAL 15 71


31

HS Code 180632 Chocolate and other food preparations containing cocoa; in blocks, slabs or bars, not

filled, weighing 2kg or less




0

1

2

3

4

5

6

7

8

0

10

20

30

40

50

60

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M


Country Thousand

tonnes USD M

Germany 1.1 10

Belgium 1.2 9

Switzerland 0.9 7

France 0.6 6

Malaysia 0.6 4

Japan 0.1 3

USA 0.2 2

Italy 0.2 2

New Zealand 0.1 2

Spain 0.2 1

Rest 1.7 10

TOTAL 7.0 55


32

HS code 170490 Sugar confectionery; (excluding chewing gum, including white chocolate), not

containing cocoa




0

5

10

15

20

25

30

35

40

45

50

0

20

40

60

80

100

120

140

160

180

200

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M


Country Thousand

tonnes USD M

Thailand 7.7 26

Malaysia 10.1 24

China, Taiwan 6.5 18

Japan 1.2 14

USA 2.4 12

Germany 2.9 12

Belgium 2.1 9

Australia 0.3 9

Rep. of Korea 1.1 8

China, Hong Kong SAR 1.7 7

Rest 11.7 49

TOTAL 47.5 188


33

HS code 170410 Sugar confectionery; chewing gum, whether or not sugar-coated, not containing cocoa



As we have already explained in the category, nearly all chewing gum consumed in China is domestically

made. Therefore, such small import quantities do not surprise. In 2017, total import amount was USD 1.6

million, and the main supplier was Japan with a third of this tiny market.

0

0

0

0

0

1

1

1

1

1

0

1

1

2

2

3

3

4

4

5

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M


34

HS Code 1905 Bread, pastry, cakes, biscuits, other bakers' wares, whether or not containing cocoa;

communion wafers, empty cachets suitable for pharmaceutical use, sealing wafers, rice paper and

similar products




0

20

40

60

80

100

120

140

160

180

0

100

200

300

400

500

600

700

800

900

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M


Country Thousand

tonnes USD M

Indonesia 60 208

China, Hong Kong SAR 6 137

Malaysia 19 73

Denmark 8 51

China, Taiwan 14 49

Japan 3 34

Rep. of Korea 4 25

Thailand 6 24

Viet Nam 6 20

USA 1 20

Rest 34 135

TOTAL 161 774


35

HS code 0801 Nuts, edible; coconuts, Brazil nuts and cashew nuts, fresh or dried, whether or not shelled

or peeled




0

50

100

150

200

250

300

350

400

450

0

50

100

150

200

250

300

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M


Country Thousand

tonnes USD M

Indonesia 247.7 87

Viet Nam 43.6 63

Thailand 72.2 62

Philippines 23.0 16

Nigeria 3.0 5

Malaysia 2.0 5

India 8.9 3

Mali 1.5 3

Togo 2.2 2

Cote d'Ivoire 0.4 1

Rest 0.9 1

TOTAL 405.2 247


36

HS code 0802 Nuts (excluding coconuts, Brazils and cashew nuts); fresh or dried, whether or not shelled

or peeled




0

50

100

150

200

250

300

350

400

450

0

50

100

150

200

250

300

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M


Country Thousand

tonnes USD M

USA 61 345

Mongolia 13 89

Dem. People's Rep. of Korea 24 78

Australia 12 61

Pakistan 6 39

Turkey 3 28

Russian Federation 8 25

South Africa 3 17

Rep. of Korea 8 17

Japan 1 5

Rest 3 17

TOTAL 142 721


37

HS code 200410 Vegetable preparations; potatoes, prepared or preserved otherwise than by vinegar or

acetic acid, frozen




0

20

40

60

80

100

120

140

160

130

135

140

145

150

155

160

165

170

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M


Country Thousand

tonnes USD M

USA 76.1 96

Belgium 17.7 16

Turkey 11.8 13

Netherlands 10.1 9

India 3.8 4

Canada 2.3 3

Germany 1.5 1

France 0.9 1

New Zealand 0.2 0

Poland 0.1 0

Rest 0.0 0

TOTAL 124.4 143


38

HS code 100590 Cereals; maize (corn), other than seed




0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

0

200

400

600

800

1000

1200

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M


Country Thousand

tonnes USD M

Ukraine 1821.8 369.6

USA 756.6 159.9

Lao People's Dem. Rep. 150.6 45.1

Myanmar 93.1 24.4

Peru 0.3 0.6

Russian Federation 2.2 0.3

Rest 0.9 0.2

TOTAL 2826.4 600.3


39

HS code 040310 Dairy produce; yoghurt, whether or not concentrated or containing added sugar or

other sweetening matter or flavoured or containing added fruit or cocoa




0

5

10

15

20

25

30

0

10

20

30

40

50

60

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M


Country Thousand

tonnes USD M

Germany 22.9 40.7

Spain 1.4 3.0

Switzerland 0.6 2.5

Australia 0.3 1.3

Poland 1.0 1.1

Austria 0.8 1.0

Rest 1.3 2.9

TOTAL 29.3 55.4


40

HS code 190490 Food preparations; cereal or cereal products (excluding maize), in grain form,

pre-cooked or otherwise prepared



Statistics show that import quantity for this category of products is very small. In 2017 the total import

amount was only USD 5 million in 2017. Main origins were Taiwan and Thailand. There were some imports

from the EU, valued approximately USD 0.4 million, from Italy and France.

0

1

1

2

2

3

3

0

1

2

3

4

5

6

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

TH

TO

NN

ES

US

D M


41

5. Duties and taxation

China has been reducing import tariffs across the board and food products are not an exception. In 2016, the

average tariff for primary products in China was 8.17%, down from 34.67% in 19926.

In addition to import tariffs, importers have to pay VAT. This levy was reduced in 1st May, 2018, from 17% to

16% for general foodstuffs (among other products) and from 11% to 10% for agricultural products, starting on

May 1st, 20187.

Following the HS code equivalences made before, we can see that tariffs for most snack categories are around

10%, while VAT is 16%. This is the breakdown:

Category Sub-category HS codes Tariff VAT

Chocolate

Chocolate

confectionary

180631 + 180632 Chocolate and other food

preparations containing cocoa; in blocks, slabs or bars,

filled, weighing 2kg or less

8%

(180631)

10%

(180632)

16% Chocolate

candy bar

Chocolate bar

Sugar

confectionary

Candies 170490 Sugar confectionery; (excluding chewing gum,

including white chocolate), not containing cocoa 10% 16%

Sugar fruit

Gum 170410 Sugar confectionery; chewing gum, whether or

not sugar-coated, not containing cocoa 12% 16%

Other sweet

confectionary

Sweet biscuits

1905 Bread, pastry, cakes, biscuits, other bakers' wares,

whether or not containing cocoa; communion wafers,

empty cachets suitable for pharmaceutical use, sealing

wafers, rice paper and similar products

10% 16% Waffles and

wafers

Sweet ‘pretzel’

sticks

Nuts, seeds and

rice crackers

Nuts 0801 + 0802 Nuts; fresh or dried, whether or not

shelled or peeled: 7-25%8 10%

Seeds N/A

Rice crackers 1905 Bread, pastry, cakes, biscuits, other bakers' wares,

whether or not containing cocoa; communion wafers, 10% 16%

6 The World Bank (retrieved in November 2018)

https://data.worldbank.org/indicator/TM.TAX.MRCH.SM.FN.ZS?end=2016&locations=CN&start=2016&view=bar 7 State Administration of Taxation (retrieved in November 2018)

http://www.chinatax.gov.cn/n810341/n810755/c3377945/content.html 8 See breakdown on the next page

https://data.worldbank.org/indicator/TM.TAX.MRCH.SM.FN.ZS?end=2016&locations=CN&start=2016&view=bar

http://www.chinatax.gov.cn/n810341/n810755/c3377945/content.html

42



Chips and

savoury

crackers

Potato and corn

chips

200410 Vegetable preparations; potatoes, prepared or

preserved otherwise than by vinegar or acetic acid,

frozen

5% 16%

Popcorn 100590 Cereals; maize (corn), other than seed 1%9 10%

Savoury

crackers

1905 Bread, pastry, cakes, biscuits, other bakers' wares,

whether or not containing cocoa; communion wafers,



10% 16%

Dried and

preserved food N/A

Yoghurts

Creamy yoghurt 040310 Dairy produce; yoghurt, whether or not

concentrated or containing added sugar or other

sweetening matter or flavoured or containing added

fruit or cocoa

10% 16%

Liquid yoghurt

Other Cereal bars

190490 Food preparations; cereal or cereal products

(excluding maize), in grain form, pre-cooked or

otherwise prepared.

10% 16%

Source: China Customs10

9 65% after exceeding quota 10 As of 1st November 2018

43

Due to the size, importance and variability in nuts, it is worth to break it down in more detail:

HS codes (nuts category) Tariff VAT

0801110000 Nuts, edible; coconuts, fresh or dried, whether or not shelled or peeled,

desiccated 7% 10%

0801120000 Nuts, edible; coconuts, in the inner shell (endocarp) 12% 10%

0801191000 Nuts, edible; coconuts, fresh or dried, whether or not shelled or peeled,

other than desiccated 12% 10%

0801210000, 0801220000 Nuts, edible; brazil nuts, fresh or dried, in shell or shelled 10% 10%

0801310000 Nuts, edible; cashew nuts, fresh or dried, in shell 20% 10%

0801320000 Nuts, edible; cashew nuts, fresh or dried, shelled 10% 10%

0802110000, 0802120000 Nuts, edible; almonds, fresh or dried, in shell or shelled 10% 10%

0802210000 Nuts, edible; hazelnuts or filberts (corylus spp.), fresh or dried, in shell 25% 10%

0802220000 Nuts, edible; hazelnuts or filberts (corylus spp.), fresh or dried, shelled 10% 10%

0802310000 Nuts, edible; walnuts, fresh or dried, in shell 25% 10%

0802320000 Nuts, edible; walnuts, fresh or dried, shelled 20% 10%

0802411000, '0802419000, '0802421000 Nuts, edible; chestnuts (Castanea spp.),

fresh or dried, in shell or shelled 25% 10%

0802510000, '0802520000 Nuts, edible; pistachios, fresh or dried, in shell or shelled 10% 10%

0802611000 Nuts, edible; macadamia, fresh or dried, in shell 0 10%

0802619000, '0802620000 Nuts, edible; macadamia, fresh or dried, in shell or

shelled 24% 10%

0802700000 Nuts, edible; kola nuts (Cola spp.), fresh or dried, whether or not

shelled or peeled 24% 10%

0802800001 Nuts, edible; areca nuts, fresh or dried, whether or not shelled or peeled 10% 10%

0802800090 Nuts, edible; areca nuts, fresh or dried, whether or not shelled or peeled 10% 10%

0802902000, 0802903010, 0802903090, 0802909010, 0802909020, 0802909030,

0802909040, 0802909090 Nuts, edible; n.e.c. in heading no. 0801 and 0802, fresh or

dried, whether or not shelled or peeled

25% 10%

Source: China Customs11

11 As of 1st November, 2018

44

6. Sales channels

6.1 Brick-and-mortar retail

6.1.1 Local supermarkets

These establishments are experiencing a deep transformation, after changes in consumption patterns and other

external (real estate cost, increased competition from CVS and e-commerce) and internal (management)

factors. They are affected by two main trends:

1. Fresh departments are being included or growing in size. This is a great advantage for supermarkets,

because CVS are still not working with fresh produce and the increasing real estate costs is pushing

small traditional corners in tier 1 cities out of business, so supermarkets are filling that gap.

2. The type, size, formats and number of products sold in the rest of the supermarket (other than the

fresh department) are changing, small and mid-size local supermarkets are slowly becoming CVS.

There are, of course, exceptions to the rule, especially for large supermarkets that are located in privileged

areas. Local supermarkets are ubiquitous in older neighbourhoods and now they face strong competition from

e-commerce (lower prices and more product availability for bulk purchases) and CVS (daily necessities).

They are quickly improving their standards, but they still are far behind other alternatives. Leading foreign

brands can easily be found, but imported products are still rare (although increasing rapidly in the last few

years) and their sourcing department almost always buy from distributors, hardly ever from exporters directly.

Products rotate quickly, but the number of brands and options is limited.

This is the most important channel for domestic snack producers, but not yet for imported snacks. However,

we can expect that successful imported snacks sold in CVS will be found in local supermarkets with some lag,

especially after large Chinese distributors include them in their portfolio, as it has happened with imported

pasta, olive oil, wine or beer.

45

Category Sub segment SKUs (count) % / Snacks Imported

Chocolate

Chocolate confectionary 13 4% <5%

Chocolate candy bar 8 3% <5%

Chocolate bar 5 2% <5%

Sugar confectionary

Candies 35 11% <5%

Gum 20 6% <5%

Sugar fruit 6 2% <5%

Other sweet confectionary

Sweet biscuits 40 13% <5%

Waffles and wafers 2 1% <5%

Pretzel' sticks 21 7% <5%

Nuts, seeds and rice crackers

Nuts 13 4% <5%

Seeds 11 4% <5%

Rice crackers 3 1% <5%

Chips and savoury crackers

Potato and corn chips 50 16% <5%

Popcorn 1 0% <5%

Savoury crackers 3 1% <5%

Dried and preserved food

Dried fruit 9 3% <5%

Dried vegetables 6 2% <5%

Dried seaweed 5 2% <5%

Dried meat 15 5% <5%

Dried seafood 1 0% <5%

Yoghurts Creamy yoghurt 18 6% <5%

Liquid yoghurt 29 9% <5%

Other Cereal bar - - -

46

6.1.2 Specialty stores

This type of retailer specialises on selling imported products. They originally targeted foreign residents in

particular areas in tier 1 cities, but those days are long past and main customers are now Chinese middle-and

upper-income urban consumers. They have expanded in these cities along this new wave of increased wealth

among urban consumers, and they are easy to find in selected shopping malls and upscale neighbourhoods.

Even if they have expanded in large cities, the recent focus on food by e-commerce platforms is making these

chains to suffer financially. They have a slow product rotation, high margins and high entry fees. It is very

common for a few products categories, such as UHT milk, beer, juices or cereals to go on sale because of

proximity to expiration date, due to this slow rotation.

E-commerce is offering a greater product selection and lower prices, so most chains are currently under a lot

of stress to maintain their less profitable locations.

This is an interesting channel for snack exporters to enter the market. Since specialty stores are in constant

need of bringing in new products and brands, it is probably the easier channel to access for EU SMEs.

However, you need to understand that first sales are almost always on trial basis, to test if the product will

work, and only a small percentage are kept in the store portfolio. You need to evaluate whether it make sense

to invest in entry fees.

47


Chocolate

Chocolate confectionary 50 6% >75%

Chocolate candy bar 20 3% 5-25%

Chocolate bar 60 8% >75%

Sugar confectionary

Candies 52 7% >75%

Gum 8 1% 5-25



Sweet biscuits 100 13% >75%

Waffles and wafers 25 3% >75%

Pretzel' sticks - - -


Nuts 58 7% >75%

Seeds 4 1% >75%

Rice crackers - - -


Potato and corn chips 180 23% >75%

Popcorn 12 2% 50-75

Savoury crackers 23 3% >75%


Dried fruit 31 4% 50-75%


Dried seaweed 19 2% 5-25%


Dried seafood 5 1% >75%

Yoghurts Creamy yoghurt 67 8% 50-75%

Liquid yoghurt 16 2% 50-75%

Other Cereal bar 26 3% >75%

48

6.1.3 Hypermarkets

Largest hypermarkets chains are foreign multinationals (Metro, Carrefour, Auchan, Walmart) and that has an

impact on the presence of foreign brands in this type of retailer. However, only a small percentage (lower than

10%) of products sold are actually imported.

Hypermarkets are also feeling the impact of changing consumption habits and e-commerce. As a consequence

of China’s urbanisation and the development of logistics, Chinese are buying less and less often in

brick-and-mortar stores12. Best-selling categories in e-commerce (electronics, personal care, among others) are

those that hypermarkets traditionally offer, and supermarkets do not (or very limited options), putting the

former in a difficult situation. In food, they compete with CVS, supermarkets, e-commerce and even wet

markets, but they are less convenient because they are located further from consumers and, in terms of prices

and product offer, they are an inferior option than e-commerce.

Because of the previous reasons, hypermarket chains are partnering up with e-commerce platforms. It all

started with Walmart buying out YHD.com13, a leading e-commerce platform for F&B, that was later sold to

JD.com14 as part of a new partnership between the e-commerce giant and the US retailer. Metro, Auchan and

RT Mart followed suit and partnered with Alibaba15. Carrefour did so with Tencent16.

Hypermarkets have domestic purchasing teams, and these rely on domestic distributors, but also source

directly from producers for some products. Entry fees are significant. Products near expiration date are not a

rare sight but not as often as in specialty stores.

This is not an ideal channel for imported snacks, although it varies for different snack categories.

12 PWC – Total Retail 2017 China

https://www.pwccn.com/en/retail-and-consumer/publications/total-retail-2017-china/total-retail-survey-2017-china-cut.p

df 13 Wal-Mart buys out YHD in online push (2015)

http://www.chinadaily.com.cn/business/2015-07/24/content_21392400.htm 14 Walmart sells China ecommerce arm to JD.com (2016)

https://www.ft.com/content/5365514a-3705-11e6-9a05-82a9b15a8ee7 15 Grocery shopping in for digital makeover after Alibaba invests US$2.9b in Walmart-style chain (2017)

https://www.scmp.com/business/companies/article/2120655/alibaba-buys-362pc-stake-wal-mart-style-hypermarket-chain

-us29 16 Carrefour partners with Tencent to test the waters of smart retail (2018)

http://www.atimes.com/article/carrefour-partners-with-tencent-to-test-the-waters-of-smart-retail/

https://www.pwccn.com/en/retail-and-consumer/publications/total-retail-2017-china/total-retail-survey-2017-china-cut.pdf


http://www.chinadaily.com.cn/business/2015-07/24/content_21392400.htm

https://www.ft.com/content/5365514a-3705-11e6-9a05-82a9b15a8ee7

https://www.scmp.com/business/companies/article/2120655/alibaba-buys-362pc-stake-wal-mart-style-hypermarket-chain-us29

https://www.scmp.com/business/companies/article/2120655/alibaba-buys-362pc-stake-wal-mart-style-hypermarket-chain-us29

http://www.atimes.com/article/carrefour-partners-with-tencent-to-test-the-waters-of-smart-retail/

49


Chocolate

Chocolate confectionary 50 4% 5-25%



Sugar confectionary

Candies 254 20% 5-25%

Gum 40 3% <5%



Sweet biscuits 110 9% 25-50%

Waffles and wafers 34 3% 5-25%

Pretzel' sticks 50 4% 5-25%


Nuts 85 7% 25-50%

Seeds 42 3% <5%

Rice crackers 28 2% <5%


Potato and corn chips 120 10% <5%

Popcorn 12 1% <5%



Dried fruit 44 4% 50-75%


Dried seaweed 25 2% 25-50%





Other Cereal bar 8 1% >75%

Top 10 largest retailers (including supermarkets and hypermarkets) in China in 2017

Name Number of stores Growth rate

1 Vanguard 3162 0.1%

2 Rt-Mart 383 2.3%

3 Walmart 441 4.7%

4 Yonghui 806 20.2%

5 Lianhua 3451 -5.6%

6 Carrefour 321 -1.3%

7 Wumart 752 5.8%

8 Ccoop 266 114.2%

9 Zhong Bai 174 4.4%

10 Watsons 3271 4.2%

Source: China Chain Store & Franchise Association

50

6.1.4 Convenience stores (CVS)

So far, we have explained that supermarkets, specialty stores and hypermarkets are experiencing difficulties

due to changing consumption habits, that focus on convenience. Convenience stores are the other side of the

coin. CVS open 24/7, they are ubiquitous in office buildings and present in residential neighbourhoods. They

offer a selection of high rotation products: daily necessities, ready-to-eat food and impulse goods. Almost all

their food products are thought for immediate consumption: small size, low price, high rotation,

ready-to-be-consumed format. It is almost impossible to find products near expiration date, everything is sold

quickly and there are few units available. They rely on a very efficient supply chain (managed locally or

regionally).

Japanese chains (7-Eleven, Lawson or FamilyMart) and some Chinese chains are growing at a neck-breaking

speed. Japanese chains have more imported products, although they still have a very high proportion of Asian

products.

It is difficult to enter this channel, but once it’s done, sales volumes are usually high. It is an ideal channel for

snacks.

Top 10 convenience stores in China in 2017

Name Number of stores Growth rate

1 Meiyijia 11659 30%

2 Jiajiayue 681 4.5%

3 FamilyMart 2181 24.1%

4 Hongqi Chain 2730 8.3%

5 Lawson 1399 49.8%

6 7-Eleven 247 15.5%

7 Buddies Shanghai 328 -13.3%

8 Tseveryday 1012 52.7%

9 Agronet 1003 10%

10 Hi-24 340 35.4%

Source: China Chain Store & Franchise Association

51

/Category Sub segment SKUs (count) % / Snacks Imported

Chocolate

Chocolate confectionary 15 4% <5%



Sugar confectionary

Candies 50 12% 25-50%

Gum 30 7% <5%



Sweet biscuits 40 10% 5-25

Waffles and wafers 4 1% >75%

Pretzel' sticks 20 5% <5%


Nuts 30 7% <5%

Seeds 12 3% <5%

Rice crackers - - -


Potato and corn chips 65 16% 5-25%

Popcorn - 0% -



Dried fruit 10 2% <5%


Dried seaweed 1 0% <5%





Other Cereal bar - - -

52

6.2 E-commerce

Food has been one of the growth priorities for e-commerce platforms, if not the top. Investment into platforms

specialised in food has been massive for the past two years. These huge investments lead by internet giants

Alibaba, Tencent and JD.com, have made possible for these platforms to develop cold chain logistics and an

extremely efficient delivery system for food products. Most platforms offer delivery within two hours in tier 1

cities for selected products.

There are a large number of players, but they are concentrating around the groups mentioned before (JD and

Tencent also cooperate). Companies not invested by them will probably disappear or be absorbed.

They are starting to source directly two types of products:

• Hero products: those that are exclusive and provide branding for the platform as the go-to place

for exclusive products. Sell little at a high mark-up. Example: Iberico ham.

• Products that sell volume: big quantities with a reasonable mark-up justify sourcing directly.

Example: fruits, meat.

E-commerce massive growth has focused on pushing fresh produce departments. For snacks, they can still use

this channel, although an online-only strategy is not recommended.

53

7. Labelling

Labelling is an important issue to address when exporting to China for the first time. A non-compliant label

can increase the time the products have to wait in Customs before being cleared, with the consequent storage

costs.

Even if importers take care of designing their label, we still recommend exporters to understand what content

must be included in their label and to cooperate with the importer to ensure a successful inspection.

As prepackaged food, snacks producer companies can use their foreign label as long as they use a Chinese

sticker over the foreign label. For now, that sticker can be stuck either at the manufacturer’s facilities or at

Chinese customs before clearance. They can also change the entire packaging, although that usually requires

important sales volume to be cost-effective.

Prepackaged food labelling is regulated by:

a) GB 7718-2011 “Food Safety National Standards General Rules for the Labelling of Pre-packaged

Foods” 17

b) GB 2760-2015 “Food Safety National Standards for the Usage of Food Additives”18

c) GB 28050-2011 “Nutrition Labelling of Pre-packaged Food”19

d) Standards specific for each type of product.

7.1 Imported snacks labels design

General considerations

• All minimum units for retail must comply with Chinese labelling requirements in order to receive

customs clearance

• Font size depends on product weight.

Range of net content Minimum height font

(mm)

Q ≤ 50 mL; Q ≤ 50g 2

50 mL < Q ≤ 200 mL; 50 g < Q

≤ 200g

3

200 mL < Q ≤ 1L; 200 g < Q ≤

1 kg

4

Q> 1 kg; Q> 1 L 6

• Production lot number (as defined by the exporter), must be stated somewhere on the individual

packaging, not necessarily on the Chinese label.

17Unofficial English translation:

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/General%20Rules%20for%20the%20Labeling%20of%20Pre

packaged%20Foods_Beijing_China%20-%20Peoples%20Republic%20of_5-25-2011.pdf

Please note that the link is temporarily out of service due to US Federal government restrictions 18https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Standard%20for%20Food%20Additive%20Use%20-%20G

B2760-2015_Beijing_China%20-%20Peoples%20Republic%20of_4-28-2015.pdf 19 http://gain.fas.usda.gov/Recent GAIN Publications/General Rules for Nutrition Labeling of Prepackaged Foods

_Beijing_China - Peoples Republic of_1-9-2013.pdf

Please note that the link is temporarily out of service due to US Federal government restrictions

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/General%20Rules%20for%20the%20Labeling%20of%20Prepackaged%20Foods_Beijing_China%20-%20Peoples%20Republic%20of_5-25-2011.pdf


https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Standard%20for%20Food%20Additive%20Use%20-%20GB2760-2015_Beijing_China%20-%20Peoples%20Republic%20of_4-28-2015.pdf


http://gain.fas.usda.gov/Recent%20GAIN%20Publications/General%20Rules%20for%20Nutrition%20Labeling%20of%20Prepackaged%20Foods%20_Beijing_China%20-%20Peoples%20Republic%20of_1-9-2013.pdf


54

• The label must be in standard Chinese characters. If the label includes both Chinese and foreign

language(s), the foreign language(s) font height cannot be higher than Chinese. This does not apply

for registered trademarks.

• Where the largest surfaces area of a package (container) of prepackaged food is more than 35 cm2, the

minimum size of the words, symbols and numerals in the mandatory labeling information shall not be

less than 1.8 mm in height.

• If the package in a selling unit includes different kinds of food, and several independent packages can

be sold independently, the labelling of each independent package shall be declared separately.

• If inner package label information can be clearly distinguished through the outer wrapper, the same

labeling information may not be repeated on the outer wrapper.

• If inner packages are covered by an outer wrapper and are not a selling unit, the mandatory labeling

information may only be indicated on the outer wrapper.

Imported snacks labels must include the following information:

• Product name and product type (e.g. 谷优葡萄干杏子燕麦饼干（酥性饼干）Gullón raisin apricot

whole wheat biscuit (cookie))

• Country of origin 原产国

• Ingredients 原料与辅料. Preceded by the expression “配料” (ingredients) or “配料表” (list of

ingredients), ingredients shall be listed in descending order of their weights; those ingredients

constituting less than 2% may not be listed in descending order. Compound ingredients must declare

raw ingredients between brackets. Allergenic ingredients must always be declared

• Name (进口商), address (地址) and contact information (电话) of the agent, importer or distributor

registered in the People’s Republic of China

• Packaging date 罐装日期. Standard date format is YYYY/MM/DD. If other order date is used,

coding shall be declared

• Shelf life or expiration date 保质期 (至).

• Storage temperature and conditions 贮藏方法 (e.g. for biscuits, “阴凉干燥处保存，避免阳光直射”

(“store in a fresh and dry place, avoid light direct exposure))

• Net content 净含量. If larger than 1000 g or 1000 ml, quantities must be measured in litres (l) or

kilos (kg).

• The nutrition components of a food should be indicated in form of box table (except in exceptional

circumstances) which can be any size and should be perpendicular to the baseline of the packaging.

The title of the table should be Nutrition Components Table 营养成分表.

Prepackaged snacks of following types are exempt from rules on nutrition labeling

• Packaged food with total surface area of no more than 100 cm2 or the largest surfaces

area of the package is no more than 20 cm2;

• Food sold on the site which is usually bought for immediate consumption;

• A prepackaged food that the daily intake amount shall be no more than 10g or 10ml.

• Those prepackaged foods which falling with the criteria of exemptions of food labels

55

according to the laws, regulations and standards

• For products requiring CNCA registration (those from animal origin), the company production license

number must be declared

• Batch number and instructions for use may be declared if necessary

7.2 Biscuits label example:

7.3 Changes ahead:

On 26th November, 2018, The China National Center for Food Safety Authority (CFSA) released a draft

version of the National Standard for the Labelling of Prepackaged Food (GB 7718). This is a major food

regulatory piece that affects all prepackaged food, including snacks, and contains very important changes,

such as the requirement to list allergens and the increase in the minimum character size.

There will certainly be a transition period between the final text of the regulation is published and its

implementation, but exporters must pay close attention to this issue, since it will require them to adapt their

packaging or the information included in their Chinese sticker label.

56

8. Key takeaways

• The snacks market is China is very different from Europe, with a much smaller importance of

chocolate and other sweet snacks. Furthermore, multinational brands producing locally dominate the

market.

• However, everything changes fast, so it is important to visit China often and keep yourself informed

to identify opportunities.

• The presence of European snacks across all different segments and sales channels is still very small

compared to other food categories. The EU is not a main producer in some of China’s snack

categories, such as dried and preserved foods; while in others, domestic produced snacks make up

most of the market.

• Most European snacks should approach the Chinese market as a niche product. Exporters should

work with specialised importers and retailers, targeting a small segment of population. Building a

strong brand reputation, first among professionals (importers, distributors, retailers), and then among

consumers, is essential to succeed in the market.

• Formats and psychological pricing also have a great importance in China. For example, domestic

yoghurts sell with a very specific format in the Chinese market, including a plastic spoon to make

them ready for consumption as snacks. In terms of pricing, some snacks categories sell smaller

formats at a relatively higher price per kilo, but below a certain price range, e.g. chocolate bars below

20 and 30 RMB (see picture on page 6). If your product is in a category that is not traditionally

consumed in China and assuming that the price per kg of your product will be significantly higher

after being imported, chances are that the smaller formats of your product will be more interesting for

importers and retailers.

• Convenience stores are a very interesting channel for snacks that almost guarantees high sales

volumes. If you want to check what works as snacks in China, these shops are the perfect place to

visit. Selling to them is quite difficult as they rarely import European products directly at first, you

will most likely need to work with a distributor that is already selling to them.

• E-commerce is a key growth channel for most food categories, especially fresh produce, but it is still

small for snacks. However, it should be considered as a complementary channel for these products,

especially for the most luxurious options (e.g. bonbons, some chocolate bars)

• Snacks are easy to export to China from a regulatory perspective. However, EU exporters need to

pay close attention to issues such as labelling. Importers will certainly help, but exporters should also

understand the basics of their product compliance in China; and be informed about potential changes

in the near future to adapt accordingly.

57

9. Annex

9.1 Further reading

Further reading Double – clicking on the Chinese consumer – 2017 China Consumer Report

https://www.mckinsey.com/~/media/mckinsey/featured%20insights/china/double%20clicking%20on%20the

%20chinese%20consumer/double-clicking-on-the-chinese-consumer.ashx

Published by: McKinsey&Company 2017

PWC – Total Retail 2017 China

https://www.pwccn.com/en/retail-and-consumer/publications/total-retail-2017-china/total-retail-survey-2017-c

hina-cut.pdf

Published by: PwC, 2017

General Rules for the Labeling od Prepackaged Food

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/General%20Rules%20for%20the%20Labeling%2

0of%20Prepackaged%20Foods_Beijing_China%20-%20Peoples%20Republic%20of_5-25-2011.pdf

Published by: USDA Foreign Agricultural Service, May 25th, 2011

China: Standards for uses of Food Additives

https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Standard%20for%20Food%20Additive%20Use%

20-%20GB2760-2015_Beijing_China%20-%20Peoples%20Republic%20of_4-28-2015.pdf

Published by: USDA Foreign Agricultural Service, April 28th, 2015

General Rules for Nutrition Labeling of Prepackaged Foods

http://gain.fas.usda.gov/Recent GAIN Publications/General Rules for Nutrition Labeling of Prepackaged

Foods _Beijing_China - Peoples Republic of_1-9-2013.pdf

Published by: USDA Foreign Agricultural Service, September 9th, 2013

9.2 Exhibitions

Exhibitions

FHC China 2019, Shanghai New International Centre (SNIEC)

www.fhcchina.com/en/ This is one of China’s premier business events for the global food and hospitality

sector. Companies from food, drink, hospitality, food service, bakery and retail industries all participate in

this event.

November 12th-14th 2019











http://www.fhcchina.com/en/

58

Tel:+86 21 3339 2215/2145

SIAL China 2019, Shanghai New International Centre (SNIEC)

http://www.sialchina.com

This is one of Asia’s leading professional food & beverage exhibition, held annually in Shanghai in May.

May 14th-16th 2019

Tel: +86 (0) 106588 6794

ANUFOOD China 2019, China National Convention Center Beijing (CNCC)

http://www.anufoodchina.com/

This is the largest international B2B food and beverage trade fair in Northern China, held annually in Beijing.

Numerous exhibitors present a wide range of food and beverages as well as an important platform to

exporters to target the market.

November 20th-22nd 2019

Tel: +86 10 6590 7766 733

FBIE Shanghai - China 2019, National Exhibition and Convention Center

https://www.tradefairdates.com/FBIE-CHINA-M11848/Shanghai.html

The Shanghai International Import and Export Food & Beverage exhibition is an important trade show of the

food and beverage industry that will provide a communication platform for domestic and overseas companies

involved in the import and export business in the F&B sector.

May 29th-31st 2019

Tel: +86 (0)21 31276864

http://www.sialchina.com/

http://www.anufoodchina.com/

https://www.tradefairdates.com/FBIE-CHINA-M11848/Shanghai.html

59

9.3 Useful websites

Useful websites

Administration of Quality Supervision, Inspection and Quarantine (AQSIQ)

A ministerial-level department under the State Council of the People’s Republic of China that is in charge of

national quality, metrology, entry-exit commodity inspection, entry-exit health quarantine, entry-exit animal

and plant quarantine, import-export food safety, certification and accreditation, standardisation, and

administrative law enforcement.

www.aqsiq.gov.cn

Chinese Academy of Inspection and Quarantine

A national scientific research body. Carries out research on the application of science and technology in

inspection and quarantine.

http://www.cnca.gov.cn/jky/

China Dairy Information

This website contains information in both Chinese and English on the dairy industry and market in China.

www.chinadairy.net

CFDA Administration

China elevated the status of the existing State Food and Drug Administration to a general administration in

early 2013 to strengthen regulations and boost consumer confidence in food and drug products. The new

organization combined the State Council’s Food Safety Office, the food supervision duties from AQSIQ

and State Administration for Industry and Commerce and will be responsible for supervising food and drug

safety in the process of production, circulation and consumption.

www.sfda.gov.cn

Certification and Accreditation Administration of the People’s Republic of China (CNCA)

An institution directly under the General Administration of Quality Supervision, Inspection and

Quarantine. Coordinates certification and accreditation activities across the country.

www.cnca.gov.cn

EU Commission: DG Trade

A large number of guides, research reports and policy documents for all sectors and trading partners.

http://trade.ec.europa.eu/doclib

Food and Agriculture Organization of the United Nations (FAO)

A specialised agency of the United Nations that leads international efforts to defeat hunger.

www.fao.org

General Administration of Customs

http://www.aqsiq.gov.cn/

http://www.cnca.gov.cn/jky/

http://www.chinadairy.net/

http://www.sfda.gov.cn/

http://trade.ec.europa.eu/doclib

http://www.fao.org/

60

An administrative agency within the government of the People’s Republic of China. Responsible for the

collection of value added tax (VAT), customs duties, excise duties, and other indirect fees. Also

responsible for managing the import and export of goods and services into China.

www.customs.gov.cn

Ministry of Agriculture

A component of the State Council in charge of agriculture and rural economic development.

www.agri.gov.cn

Ministry of Commerce (MOFCOM)

An executive agency of the State Council of China. Responsible for formulating policy on foreign trade,

export and import regulations, foreign direct investments, consumer protection, market competition and

negotiating bilateral and multilateral trade agreements.

english.mofcom.gov.cn

State Taxation Administration of The People’s Republic of China (STA)

It that manages and governs the taxation system.in China and operates as a part of Government of People’s

Republic of China.

http://www.chinatax.gov.cn/eng/

The World Bank

One of the world’s largest sources of funding and knowledge for developing countries.

http://www.worldbank.org/

United States Department of Agriculture (USDA)

The United States’ federal executive department responsible for developing and executing US federal

government policy on farming, agriculture and food.

www.usda.gov/wps/portal/usda/usdahome

USDA Economics, Statistics, and Market Information System (ESMIS)

A collaborative project with a system that contains nearly 2,500 reports and datasets.

usda.mannlib.cornell.edu

WTO/TBT-SPS Notification and Enquiry of China

An information channel set up according to transparency stipulations in the TBT and SPS Agreements.

http://www.tbt-sps.gov.cn/Pages/home.aspx

http://www.tbt-sps.gov.cn/sites/english/Pages/default.aspx

http://www.customs.gov.cn/

http://www.agri.gov.cn/

http://english.mofcom.gov.cn/

http://www.chinatax.gov.cn/eng/

http://www.worldbank.org/

http://www.usda.gov/wps/portal/usda/usdahome

http://usda.mannlib.cornell.edu/

http://www.tbt-sps.gov.cn/Pages/home.aspx

http://www.tbt-sps.gov.cn/sites/english/Pages/default.aspx

61

About the EU SME Centre

The EU SME Centre helps EU SMEs get ready for China by providing them with a range of information,

advice, training and support services. To find out more, visit: www.eusmecentre.org.cn.

The EU SME Centre is an initiative implemented with the financial support of the European Union.

The EU SME Centre provides a range of China Business Solutions, including:

• Tailored China market research

• Company verification

• Customised step-by-step guide to exporting to China

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Read more about China Business Solutions at www.eusmecentre.org.cn/solutions or contact

[email protected]. To submit your enquiries directly to our experts go to Ask-the-Expert

www.eusmecentre.org.cn/expert.

Need more help?

The EU SME Centre has over 100 reports, guidelines and case studies in its Knowledge Centre,

the following may be relevant to you:

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Further reading…

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62

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The Snacks Market in China - CCILCccilc.pt/wp-content/uploads/2017/07/SNACKS.pdf · 2019-09-17 · introduction, China is one of the countries with the lowest sugar consumption per