China becomes world’s biggest food market
A report by UK-based think-tank IGD has revealed that China’s grocery sector was worth £607bn at the end of 2011, while the US clocked in at £572bn in the same period.
Forecasts are predicting the Chinese market will continue to grow to be worth £918bn by 2015, outstripping the US, which is predicted to grow to £675bn.
The IGD report said that US grocery retail growth would reach a compound annual growth rate of 4.2% between 2011 and 2015, however, China’s rate is likely to be double that, at 10.9% over the same period.
The report predicts that all the BRIC (Brazil, Russia, India, China) nations will be in the top five grocery markets by 2015, with India displacing Japan as the world’s third-largest grocery market by value.
Joanne Denney-Finch, chief executive of IGD, said: “China’s grocery growth story is phenomenal. Between 2006 and 2015, the Chinese grocery market is forecast to triple in value and to be worth nearly £1trillion. This rapid expansion has been fuelled by three main factors: rapid economic growth, population and rising food inflation.
“Despite its various logistical and bureaucratic challenges, China is a crucial growth market for many of the world’s largest grocery retailers. Even beyond the major cities, there are huge opportunities: forecasts suggest there will be over 200 Chinese cities with a population of over a million people by 2025. But given China’s size and diversity, it’s essential not to treat the country as one homogenous market.
“All the BRIC nations have been steadily increasing in value and, by 2015, they are tipped to dominate the top five grocery slots, and many UK food and grocery companies are already pursuing this opportunity.
“In the UK, we expect the online sector to perform well, with internet sales boosted by the increasing use of smartphones and tablet computers. Convenience stores, with their increased focus on fresh food and tailoring the store depending on local demand, are also expected to be key performers.”
