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The Status Quo and Future of the Chinese Nuts Market

Over the centuries, the consumption of nuts has become a staple in Chinese daily life. In line with the growing ecconomy, China’s nut market has been also been expanding in recent years. In 2018, nut products took second place in the sales of leisure snacks in China with a market share of nearly 100 billion yuan and a growth rate of 12%. This growth has been achieved in part thanks to vigorous promotion by e-commerce. However, compared with developed countries, there is still a huge room for improvement in the per capita consumption of nuts in China.

 

Consumer performance and preference of the Chinese nuts market

Recently, Dr2 market research provides some really interesting insights into this trend. With the steady growth of the nut market in China, the unit price of nuts correlates with the improvement of the nut’s quality. From 2010 to 2014, the average price of nuts increased by 4%. According to Taosj, the per customer transaction of nuts in August 2019 was 39.7 yuan, higher than other snack categories such as puffed food and preserved fruit. Among them, the per customer transaction of walnut, hazelnut and other tree nuts is higher than that of peanut, melon seeds and other seed nuts. Mixed nuts is the category with the highest per customer transaction among nut food customers (mostly sold by whole box). According to CBNData, mixed nuts accounted for almost half of the nut market in 2018-2019.

As the variety of snack choices increases, people are thinking more about the nutritious value of what their eating. About 61% of Chinese consider “all natural” to be an important feature of healthy snacks. 31% of Chinese consumers associate a healthy lifestyle with “high protein,” especially male consumers aged 25-29, and 40% of Chinese female consumers believe that health means “low calories.” Among consumers aged 41 to 49, 41% said healthy snacks should be low in salt. “Daily nut” and “Meal substitute nut”, which are extremely popular in the nuts market, bring the combination of nutrition and taste through the combination of different nuts. They quickly occupy the market by the concept “healthy and light food”. In the context of growing health demand, there is still a large room for growth of compound nuts as a category upgrade.

Dr2 research shows that the proportion of nut consumers in Second-tier cities in China is particularly high. A more interesting finding is that population growth in tier 3, 4 and 5 cities is positively correlated with the proportion of nut consumers. According to Tmall, generation Z has had a significant impact on the growth of nuts consumption.

 

E-commerce trend and brand pattern of the Chinese nuts market

Before the big development of E-commerce platforms in China, the traditional nuts market was dominated by offline retailers. China’s traditional seed nut industry developed early, in large scale and low degree of branding. Besides the seeds, other nut categories did not produce representative leading enterprises. In 2014, the brand concentration ratio CR5 (the market share of the top five brands) was less than 6%. Due to the few processing links of nuts, easy preservation and transportation, etc., nuts are perfectly suited to the e-commerce sales model. With the continuous development and improvement of China’s e-commerce market since 2010, online e-commerce nut brands like “Three Squirrels” have risen to the top. By 2018, the industry competition tends to be concentrated, and the market share of online brands is rapidly increasing, with CR5 increasing from 6% to 17%. According to the sales volume of nuts category on Taobao.com in June 2019, the top three brands are Three Squirrels, Be&Cheery and Bestore respectively, accounting for 33%, 15% and 9% respectively. According to a report by Mintel, e-commerce is a crucial channel for international snacks, as it provides easier access to international products. In addition, e-commerce provides a cheaper way for overseas companies to enter the Chinese market.

At the end of the flow dividend, the nut market has formed a strong entry barrier, and the cost of new entry is high. Therefore, in addition to the transformation of offline traditional enterprises into popular e-commerce channels, the current Chinese nut market also begins to see the trend of online enterprises starting to develop offline. Nut enterprises hope that diversified sales models can increase consumers’ purchasing experience and build brand influence through omni-channel marketing.

 

The third China international import expo (CIIE) will be held in Shanghai national convention and exhibition center on November 5 to10, 2020. The exhibition covers four theme sections, including consumer goods and smart life, food and agricultural products, services and health. The Expo will open up new channels for countries to carry out trade and strengthen cooperation. It is a major step taken by the Chinese government to firmly support trade liberalization and economic globalization and open its market to the world. In order to reduce the inconvenience brought to exhibitors by the epidemic, Dr2 consulting Shanghai office provides services to participate in the Expo on behalf of customers. If you want to obtain more information or have any more questions, please contact us at shanghai@dr2consultants.eu.