Opportunities for Italian agricultural and food products in Chinese market

Opportunities for Italian agricultural and food products in Chinese market

opportunities

From our office IC&Partners Asia

 

Recent Chinese policies in the agricultural sector reflect the strategic decision of the Chinese leadership to steer the country’s economy towards a more responsible and balanced development, characterized by higher domestic consumption and the improvement of the quality of products and services.

 

In particular, in October 2015, it was launched a new law on food safety which provides for stricter rules for those who do not respect the standards and legal constraints. Based on the new regulations, traceability becomes the key principle in the pursuit of security:

  • producers must certify the products and create a reliable traceability system;
  • foreign exporters are forced to create a system to verify compliance with the standards set by the regulations (the hope is that this regulation does not represent an additional barrier to entry for foreign food products, already penalized by customs duties and complex procedures for exporting to China).

 

China’s New Normal can represent for Italian agri-food businesses an important opportunity for a more severe discipline with regard to food safety, combined with the evolution of eating habits of the Chinese population to quality products, will encourage the consumption of foods which, like those Italian, enjoy a good reputation for authenticity and typicality.

 

The Italian agricultural and food products are designed for medium to high market sector or those Chinese consumers of the middle class that aim for higher living standards and who have entered typically Western foods and drinks in their diet. A growing number of cities (especially in the east coast) shows strong signs of Westernization consumption also in the food and this has also favored the production Made in Italy: in 2015, imports of Italian food products in China grew 22% and exceeded for the first time the 400 million euro per year.

 

This significant increase in imports from Italy reflects the growing demand for safe and high quality food by Chinese consumers and is encouraged by the development of conservation techniques that allow the transport of fresh food even in distant markets; in addition, it considers that the reduction of duties on luxury goods, approved in 2015, has also covered high-quality food (especially, wines), making the purchase by Chinese consumers more affordable.

 

Another factor that favors the purchase of our food is the growing number of Italian restaurants, already present in the main cities of central and eastern China, not only in major cities of the eastern zone (Beijing, Shanghai and Guangzhou) where Italian restaurants have already established long time ago.

 

Currently, the main product exported from Italy is wine, followed by chocolate, pasta and bakery products; olive oil sees Italy as the second largest exporter after Spain; the residual products, such as meat, sausages and dairy products, still have a low weight but good for growth.

 

In 2015, Italy exported wine in China for a total of about 91 million euro, an increase of 16% over the previous year. However, the current position of Italian wine in China (fifth place, after France, Australia, Cine and Spain) is not yet adequate to the role that Italy plays in the global market of wine as the first producing country.

 

 

Another popular Italian product is chocolate, whose value of imports is growing and puts Italy in first place as a supplier country. The current per capita consumption of chocolate in China remains very low compared to the per capita world consumption, so the Chinese market has very good future prospects. For this reason, many foreign manufacturers have made their entry in China for several years: among them, Ferrero has been a great success in the market and recently also opened a factory in Hangzhou.