Lucrative Margins, Innovative Business Models and Growing Supermarket and Hypermarket Chains to Support Future Growth of China Organic Food Market: Ken Research

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June 2016

The China organic food market is expected to showcase a vibrant growth, with revenues to reach USD 9 billion by 2020. The market will continue to grow in the coming years with a substantial number of retailers looking forward to leverage the booming demand for organic food in the wake of growing food safety concerns in the country. Further, the growth in the number of urbanites and expatriates in China will fuel the growth of the market. The rising number of online platforms offering organic produce will also play an important role in enlarging the market size.

Currently, the market for organic food is highly fragmented with presence of as many as 730 companies engaged in organic food production. Therefore there is a huge scope for consolidations that will help in proper regulation of the market which in turn will enable optimization in production processes. There exist enormous opportunities and scope of innovations and research and development in the market that will widen the organic offerings and instigate the market.

The industry is likely to be driven by the emerging middle class who have grown more sophisticated in their food habits. Also, the economically stronger working population residing in major cities like Shanghai and Beijing has grown more conscious towards healthy lifestyle and prefer organic food consumption. On the other hand, the online market will further witness the entry of more players tapping the growth potential as well as attract the attention of venture capitalists. Additionally, existing brick and mortar retailers will continue to expand their services across more cities and offer additional services to gain consumer confidence that has declined in the past few years. Government initiatives will play an important role in stimulating the market as pro-environmental policies like subsidizing and promoting organic cultivation will be a huge boost in the coming years.

“While the online players will utilize the enormous growth potential of the market by innovating their business model and offering value added services to customers to improve their presence in the market, they will face tough competition from large retail chains like Walmart and Carrefour which have a wide popularity among consumers. “Further, it is important for new entrants to adopt differentiated business models and smart pricing strategies to stand out in the market” according to the Research Analyst, Ken Research.

The report titled China Organic Food Market Outlook to FY’2020” provides detailed overview on the Organic Food Market and helps readers to identify the ongoing trends in the market and anticipated growth in future depending upon changing industry dynamics in coming years. The report will help existing organic food manufacturers and processors, importers and exporters of organic food, consultants, small and big retailers including online companies operating in the market as well as other stakeholders to align their market centric strategies according to ongoing and expected trends in the future.