Food safety concerns for Chinese citizens offer export opportunities

Food safety is the main concern for consumers in China’s financially significant lower-tier cities, according to a study by advertising, marketing and PR group Ogilvy & Mather.

With 200m households in China’s second to fourth-tier cities — such as Chengdu, Changsha, and Shenyang — these consuming classes are arguably the most important consumer segment in the world, the company said. &

And while environmental pollution and the rising cost of property and healthcare are also of concern, food safety is the top priority for this group of consumers. China’s first-tier markets, such as Beijing and Shanghai, have a disposable income of 1tn renminbi (€123bn), while the seven times larger populations in lower-tier cities have 8tn to spend.

Shenan Chuang, chief executive of O&M Greater China, said: “These fears are based on the residents’ own experiences, amplified by the rapid sharing of experiences through the Internet. Some local brands are tapping into this anxiety by marketing their products as ‘ecologically safe’ or natural — even if the consumers are sceptical of those claims.

“China’s lower-tier settings are no longer a world away. The changes in the consumer landscape are driven by the expansion of the internet and other digital innovations that have allowed Chinese consumers to be much more cognisant of the world outside their cities or towns than they once were, even if they’ve never migrated themselves.”

During 2011, Ireland exported €240m in dairy, meats, beverages, seafood and hides and skins to China. Infant formula is one of Ireland’s biggest food exports to China, worth over €100m in 2011.

The Ogilvy & Mather report also noted a rise in compassion and belief in community values, and an appreciation of the more relaxed lifestyle in these lower-tier cities. About 2,200 middle-class families were surveyed on their beliefs and attitudes towards family, life, risk, novelty, ambition and fashion.

The report suggests that the first wave of reverse migration is now in full swing — notably among those who migrated to Beijing, Shanghai, and Guangzhou a decade ago, and who now realise “that after years of hard work, they are still unable to afford homes, cars or their child’s education”.

For companies looking to break into this lucrative market, O&M suggests fusing health and beauty benefits in their branding, corporate social responsibility activities, and the use of online connectors to become a brand’s champion.

O&M also suggests companies should help consumers to master their Weibo, Weixin, and other blogging skills. Companies might also update consumers with product news, and provide assurances about product delivery and return policies.