Chinese food industry sales hit $328.7b in 2023

The growth was largely driven by staple foods.

China's food industry sales surged to $328.7b in 2023, accounting for 40% of the Asia Pacific market, the Euromonitor International data showed.

The growth was largely driven by staple foods, which saw a 5% compound annual growth rate (CAGR) in retail value sales from 2018 to 2023. Conversely, the dairy products and alternatives segment witnessed a slight decline in market share within Asia Pacific, dropping from 52% in 2018 to 48% in 2023.

To sustain growth, Chinese food companies must boost domestic sales and explore new regional opportunities. “Exploring new territories beyond China might be a challenge, however, as Southeast Asian markets have typically been led by local giants, unique to each country and holding both knowledge and partnership advantages over newcomers,” the report stated.

It added that differentiation and competitive pricing are key for Chinese firms to succeed against rivals from South Korea and Japan.

In 2023, China's dairy market saw brands targeting premium segments and expanding their reach. This allowed top brands to increase their market share by 13% from 2018 to 2023. Leading companies like Yili expanded in Asia Pacific, capturing 12% of Thailand’s ice cream market with its Cremo brand.

Japanese and South Korean firms are also eyeing Southeast Asia for growth due to challenges in their domestic markets. Known for quality and novelty, these products pose a competitive threat to Chinese brands, which must position themselves to offer value at competitive prices.

One example is Mixue Ice Cream and Tea, owned by Mixue Bingcheng Co Ltd. Since entering the Malaysian market, it has grown to over 100 outlets in three years, competing with established brands like Chatime and Gong Cha. Its success is attributed to its halal certification, franchise model, and aggressive marketing campaigns coupled with affordable pricing.

Brands such as Haidilao and Chagee are also leveraging cultural authenticity to attract customers. Haidilao’s affordable family-styled food concepts, including a BBQ grill range, have boosted its appeal in Singapore. 

Moreover, full-service restaurants in Singapore are expected to see an 8% CAGR in sales from 2023 to 2028. Meanwhile, Chagee’s modern oriental tea house design and premium ingredients have strengthened its presence in Malaysia.

Chinese brands are known for innovative technologies and immersive experiences. However, the report noted that they must balance this with affordability to attract consumers in Southeast Asia. 

In markets like the Philippines and Malaysia, low prices are crucial for 69% and 48% of respondents, respectively, when choosing food and beverages in 2024.

Chinese firms can capitalise on lifestyle habits to drive sales. For instance, 61% of Indonesian respondents reported snacking while watching TV or streaming content, indicating potential for packaged snacks and light meals like instant noodles. 

“This opens not only the potential of packaged snack products but also lighter meals that could be consumed as a snack, such as instant noodles, which in local culture is considered a type of food suitable throughout the day.”