Contents

• Market Condition

• Company Dynamics

• E-commerce & Social Commerce

• Regulatory Compliance

Market Condition

1. Latest research shows that 34.8% of the Chinese population is classified as overweight, with 14.1% falling into the category of obesity. According to Frost & Sullivan, China's weight management market has seen substantial growth, increasing from 21.9 billion yuan in 2017 to 33.4 billion yuan in 2022, with a compound annual growth rate (CAGR) of 8.8%. It is expected that from 2022 to 2027, the market will continue to grow at a CAGR of 10.0%, reaching 53.8 billion yuan by 2027.

2. "Chinese Herbal Sour Plum Drink" has become a recent sensation on Chinese social media. This beverage has gained immense popularity due to its health-promoting features which have captured the interest of young consumers who embrace a new lifestyle—punk health. These consumers have a high demand for health and wellness and seek "quick fix" remedies for minor health issues resulting from late nights and demanding work routines. Additionally, the beverage has high cost-effectiveness, with lowest price for a serving at just 1.34 yuan, much lower than chain tea beverage brands. Furthermore, the social attributes of new products is a significant draw for consumers who take pleasure in sharing and connecting on social media platforms.

3. A survey among parents with children aged 0-14 has revealed that about 80% of respondents prefer to select products labeled as "children's food" when purchasing food for their kids. These products usually come at a higher price than regular food items. The new generation of parents places a strong emphasis on scientific parenting and precise childcare, showing a preference for products that meet specific requirements. In response to this trend, an increasing number of businesses have recognized the opportunity and introduced products with a focus on children, often often at a premium price.

4. As per WinWin Network, an offline retail monitoring agency, senior and middle-aged milk powder has displayed remarkable performance in the powdered beverage mixes category, with its market share on the rise. In contrast, cereals, instant milk tea, soy milk powder, instant coffee, sesame paste, have experienced a decline in their market share.

Company Dynamics

1. Kweichow Moutai, a prominent Chinese baijiu giant, co-branded with Luckin Coffee to launch a Moutai-flavoured latte. This new offering is priced at CNY 38, but consumers can purchase at CNY 19 with coupons. On the first day of product launch, the Moutai-flavoured latte sold more than 5.42 million cups, with sales value exceeding CNY 100 million. Besides, Moutai and Dove collaborated to launch the "Mao Xiaoling Liquor-filled Chocolate," priced at 35 yuan for a pack of two. On the day of its release, the product sold out within moments across multiple sales channels.

2. Jinmailang Beverage has introduced its electrolyte drink product—Electrolyte Balance. This product features a low-sugar isotonic formula to meet the demands of consumers looking for quick electrolyte replenishment while also appealing to those seeking lower-calorie options. In China, an increasing number of brands have entered the electrolyte beverage market, including Mizone, Chi Forest, Eastroc Beverage, Uni-President, and Jianlibao, among others. According to Qianzhan Industry Research Institute, the electrolyte beverage market exhibited an impressive year-on-year (YoY) growth of 50.1% in 2022, reaching 2.7 billion yuan, making it one of the fastest-growing beverage categories.

3. M-Action, the sports nutrition brand under Mengniu, has introduced its protein bar product with an impressive 30% high protein content, exceeding current market standards. Earlier in March this year, M-Action introduced two ready-to-drink (RTD) protein drinks designed to facilitate rapid recovery and provide nutritional replenishment after exercise, catering to the requirements of both moderate-intensity and high-intensity sports enthusiasts. With the introduction of this new protein bar, M-Action is diversifying its sports nutrition product line to cater not only to the professional fitness community but also the broader fitness-conscious population.

4. Coca-Cola Creations has unveiled a new limited-edition product named "Y 3000", which is the first ever coca cola co-created with human and artificial intelligence by understanding how fans envision the future through emotions, aspirations, colors, flavors and more. This innovative product is already available in the Chinese market. Consumers can scan an on-pack QR code to access the CocaCola Creations Hub, where they can filter photos through the custom Y3000 AI Cam to envision what their current reality could look like in the future.

5. Chi Forest has launched "MAXX," a carbonated energy drink enriched with nutrients such as taurine, caffeine, vitamin B6, niacin, and also infused with a special peppermint extract highlighting its "explosively refreshing" feature. MAXX comes in both sugar-free and sugared versions to cater to a diverse consumer preferences. This marks Chi Forest's another significant move in the energy drink market, following the success of Alien Electrolyte Water. In 2022, Alien Electrolyte Water captured a remarkable 47% market share in the Chinese electrolyte water market, securing its top position in this market.

6. Sherlock, a Chinese cheese brand under Happyfood Food Co., Ltd., has launched a savory cheese snack named "Crispy Cheese", with a focus on adult consumers. This product features New Zealand cheddar cheese with a content exceeding 70%. Currently, the cheese market in China is primarily shaped by foodservice consumption. Within the snack category, cheese products primarily cater to children, with limited options available for adult consumers. There exists significant untapped market potential within the adult cheese product segment.

7. Budweiser has unveiled its first organic beer called "Budweiser Brew Master Organic", marking the brand's foray into the organic beer market. In recent years, as health awareness continues to grow, the organic food market in China has been on an upward trajectory. According to JD's 2022 Organic Category Consumption Trend White Paper, the organic market size is projected to reach 107 billion yuan by 2023. 

E-commerce & Social Commerce

1. According to MKTIndex, the total sales of health food products on Ali and JD platforms reached 13.26 billion yuan from July 2022 to June 2023, marking a YoY increase of 42%. Notably, the first half of 2023 exhibited a particularly significant growth.

2. Douyin Top 10 Best-selling Dairy Products in Q2 2023

Regulatory Compliance

1. On September 25, 2023, National Health Commission (NHC) and State Administration for Market Regulation (SAMR) jointly released No. 6 announcement, enacting 85 new national food safety standards and 3 amendment lists to existing ones. Of the new standards, 3 pertain to food products, 5 to food manufacturing and operations, 6 to food contact materials and articles, 55 to testing methods and 16 to specification of food additives and nutrition fortification substances. More information on ChemLinked.

2. According to an official media release on September 12, 2023, State Administration for Market Regulation (SAMR) is currently trialing a priority review and approval process for urgent clinical needs related to foods for special medical purposes (FSMP) for rare diseases. 18 rare diseases related to the use of FSMP foods are listed in the China's First Batch of Rare Diseases. More information on ChemLinked.

3. On September 8, 2023, State Administration for Market Regulation (SAMR) and Standardization Administration of China (SAC) jointly unveiled the finalized version of GB 43284-2023 Requirements of Restricting Excessive Package-Fresh Edible Agricultural Products. Edible agricultural products produced or imported before the implementation date, i.e., April 1, 2024, can still be sold until the end of their shelf life. More information on ChemLinked.

**Disclaimer: All images used in the article are from the Internet.