UTRECHT, NETHERLANDS — China’s consumer market is quickly evolving, triggered by the country’s rapid economic growth, the opening of markets and digitalization trends, according to RaboResearch’s latest report, “New consumption trends in China offer opportunities for animal protein.”

While consumers have lowered spending in certain categories, spending on food has stayed strong. However, demand is becoming more sophisticated, with consumers looking for a product’s value proposition to go beyond the product itself.

“Today’s consumers expect more than just a product,” explained Chenjun Pan, senior analyst of animal protein at RaboResearch. “They seek a comprehensive value proposition that includes good service and valued experiences.”

Specifically, with animal protein consumption, consumers are adopting a more rational and practical value proposition, focusing more on value for money and the fundamental value of products and services. At the same time, they are willing to pay for high-value products.

This attitude complements China’s trend toward the experience economy. There is a growing preference for spending on services over goods, reflecting a desire for valued experiences, notes the RaboResearch report.

Health issues, such as obesity, are challenging specific consumer groups to seek a balanced diet and focus on health and nutrition.

“How to eat well instead of how to eat more has now become the focus of many Chinese consumers,” Pan said.

RaboResearch described China’s total animal protein consumption to be “quite high” at 72 kilograms of meat on a per capita basis in 2023.

Even with strong demand for meat and poultry, demographic changes are beginning to shape preferences. China’s current population, marked by an aging population and smaller household sizes, is creating nuances in the meat market.

“The market is gradually moving away from pork, traditionally the dominant choice, toward poultry, beef and seafood, which are favored for their perceived health benefits,” Pan said. “Additionally, the older generation’s adoption of e-commerce, food delivery and convenience foods marks the end of past consumption behaviors.”

Distribution channels pose another evolving factor in China’s market, with the rapid growth of e-commerce, the restructuring of traditional wet markets, the ups and downs of supermarkets and the emergence of convenience stores over the decades. Currently, meat consumption is on the rise in on-premises channels, such as restaurants and bars. The latest emerging distribution channel in China is live streaming, where consumers can learn how to cook and then order the products on the streaming platform at a lower price than those offered by supermarkets.

To capitalize on these trends, companies need to pivot from volume-centric to consumer-centric strategies, according to the report.

“These changes in China’s animal protein market present a unique set of challenges and opportunities,” Pan said. “Companies that adapt to these new consumption trends with agility and consumer focus are set to thrive in this dynamic environment.”