What to expect for 2023 after China reopens?
Updated: Jan 19
It is officially said that China will scrap quarantine for travellers from 8th January 2023, showing that China starts to reopen. This will bring new opportunities for FMCG, especially international brands, to succeed in China.
Besides the 3 trends witnessed in 2022 which are expected to continue in 2023, here are 2 opportunities predicted for 2023.
1. Offline retail rebounds with a focus on customer experience
In 2023, recovery was expected to rebound for offline retailing, as covid restrictions were far more eased than in previous years and consumer confidence in spending started to return. To attract shoppers back when facing fierce challenges put by e-commerce, offline retailers have continued to actively seize the business opportunities brought by new consumption, not only by adopting new technologies but also by actively innovating to create refined retail services, products, and space in order to enhance customer experience. New retail mode and pop-up stores are two examples to learn in the post covid period.
New retail enhances customers experience by integrating the retail delivery model where offline, online, logistics, and data converge. Customers thus have various ways to purchase items. When purchasing online, customers can have their chosen items delivered to their door within only one or two hours. Increasing numbers of consumers became used to this mode during the pandemic. When shopping in-store, shoppers can have various experiences including fresh food, product traceability, in-store dining, and convenient checkout. This seamless shopping experience makes customers enjoy the shopping process and thus is expected to continue post covid.
When customers are becoming more digitalised, pop up stores seem to be a strong weapon to win them back. A pop-up store refers to temporary retail space that brands occupy, and this marketing tool is popular in many industries nowadays, including cosmetics, food & beverage, luxury, etc. It is usually designed or decorated creatively with the intention to communicate with customers and thus can provide more unique, engaging and memorable experiences compared with traditional brick-and-motor stores. One secret for brands to be successful in pop-up stores is to be present on social media, as it relies heavily on short-term traffic and attention, requiring brands to encourage consumers to take photos in the store and share locations on different social media platforms. Collaborating with KOLs and celebrity endorsers is thus a powerful marketing tool. For new brands entering China, it is a good way to generate buzz around product launches and receive feedback.
2. The preference for health and beauty care food
Awareness towards healthy eating is also a significant trend in China. The market size of health and functional food in China in 2021 was 196.1 billion yuan and 243.4 billion yuan in 2025. The younger generation has replaced the elderly to be a more important and main shopper group of supplements in China, playing a bigger role in the purchasing decision for the extended family and shifting the consumer group to span across all age groups.
Two opportunities have been identified under this trend. Firstly, the organicity and how it is produced become more important, and thus products labelled as clean, organic, not containing any preservatives, and all-natural are some of the fastest growing categories. Followed by this trend, live streams from farms and factories showing the production process have been very successful marketing tools for F&B products, given that they show the origin and production of the products.
Secondly, supplements in the form of snacks and small packages are now on the rise, compared to traditional intake in the form of pills and capsules. These functional healthy snacks are targeting the younger generation, who may suffer from mental health, skin problems and weight management. In this situation, collagen gummies, vitamin candies, probiotic milk pills and other snacks experienced fast growth.
The predicted rise in offline retail and healthy food provides opportunities for FMCG companies, especially foreign brands. However, the market at the beginning of post covid can be complex and fast-moving, with an ever-changing landscape of consumer preferences and channels. To seize opportunities in this significant and challenging time, feel free to speak to our team for any support.