Business
Homegrown brands gain traction among Chinese consumers
By Li Xiaoyang  ·  2022-07-18  ·   Source: NO.29 JULY 21, 2022
Milk tea brand Sexy Tea's inaugural outlet opens in Chongqing on June 1 (VCG)

After queuing for nearly an hour, Zhu Jie, a teacher in her 20s in Chongqing, tried her first cup of Sexy Tea in June. The milk tea brand based in Changsha, Hunan Province, opened its first store in Chongqing that month. "Although queuing is tiring, it was worthwhile! It's delicious," Zhu said on her Moments, a social networking function of the super-app WeChat.

Founded in 2014, Sexy Tea's packaging and stores are decorated with ancient patterns, and its products make use of indigenous ingredients such as oolong tea and Chinese orchid flowers, which are attracting many young people.

In recent years, the tide of China chic, or the rise of China's native fashion trends, has driven homegrown food and beverage brands to seek new ways to gain a following among young consumers. Millennials and Gen Zs are showing an increasing preference for innovative Chinese-style products. Their diversifying demand is seeing them take to social media to look for new offerings to try, willing to pay not only for pleasing flavors but also distinctive branding, including packaging and store decoration.

"The rising recognition of China chic is driving these brands. Many of them have developed star products that have made them competitive in the market," Cui Lili, Director of the Institute of E-Commerce at Shanghai University of Finance and Economics, told Beijing Review.

Old and new

Many time-honored food and beverage companies are developing new products to attract young, novelty-seeking consumers. One such company is the Shanghai-based Guan Sheng Yuan, which has been producing iconic White Rabbit candy since 1943. In recent years, the company has introduced a range of new products including milk-candy-flavored ice cream and drinks.

Beijing beverage brand Beibingyang, or Arctic Ocean, has also made a bold attempt at innovation. Last year, the company established several outlets under the brand Beiping Ice Factory, an old name dating to the year 1936 when the brand was founded. Its most famous orange soda drink, usually distributed in returnable and reusable glass bottles, is now being made into a range of freshly prepared drinks and ice creams at the stores, providing a richer customer experience. Other derivatives like cups and T-shirts inspired by its polar bear logo have attracted consumers of all ages.

New brands of traditional Chinese cuisine have also emerged in recent years, including many hotpot restaurant chains. Unlike regular restaurants, they offer more than just good food.

Sichuan Province, one of the places where spicy hotpot originates, is also famous for Sichuan Opera which features face changing performances, in which performers switch between masks faster than audiences' eyes can follow. Many Sichuan hotpot restaurants are introducing these kinds of traditional performances in order to attract diners. There are also Cantonese-style hotpot restaurants that feature elements of lion dancing, a local traditional performing art.

While Western-style afternoon tea with coffee and cakes is being embraced by Chinese consumers, Chinese pastries are also becoming more popular. Dim Sum Bureau of Momo and Tiger Attitude, both based in Changsha, focus on making innovations to traditional Chinese pastries. With products being decorated with designs inspired by Peking Opera makeup and Chinese-style ornaments, the stores have attracted many young consumers, who share their reviews of their purchases on social media platforms.

China chic products are also making an increasing mark on the beverage market. Besides mushrooming milk tea stores, there are also Chinese-style coffee products featuring osmanthus, a southern Chinese flower used to flavor sweet dishes, and even traditional Chinese medicine. The mix of styles is invigorating the traditional beverage businesses.

Growth and innovation in the food and beverage industry is being driven by an increasingly demanding population of Chinese foodies. According to the Beijing-based research firm AskCI Corp., the value of China's food and beverage market is expected to exceed 5 trillion yuan ($742 billion) by the end of this year.

Tourist attractions are also following the China chic trend, introducing drinks and ice creams with distinctive styles to lure visitors. The Temple of Heaven in Beijing offers tourists popsicles in the shape of an ancient palace, and drinks with jelly of the same shape. Ice creams in the shape of landmarks are now common in parks, museums and cultural sites around the country.

Products of pastry brand Dim Sum Bureau of Momo (COURTESY PHOTO)

Pursuing longevity

While China chic brings brands popularity, maintaining that popularity is often a challenge.

Ice cream brand Zhong Xue Gao, established in 2018, features products in the shape of traditional Chinese roof tiles. The company has recently faced controversy, after a video of its products not melting, even after being exposed to the flame of a lighter, was posted online. It later responded via social media that its products contain carrageenan, which is used as a thickening agent that meets national safety standards.

Zhong Xue Gao was fined in 2019 for false advertising, as it claimed to have used high-quality raisins, which were later found to be only ordinary ones.

The company's pricing strategy has also triggered debate. Zhong Xue Gao's most expensive product, Ecuador Pink, retails for 66 yuan ($9.8). Its cheapest ice cream costs around 15 yuan ($2.2), which is as much as three times the price of the mainstream products of traditional brands.

Though many people argue that ice cream, as a kind of fast-moving consumer goods, should be of moderate price, some others believe China's rapidly diversifying demand means there are increasing numbers of consumers willing to pay for expensive ice creams.

According to Cui, Zhong Xue Gao targets a niche market. To expand its business, the company needs to develop diverse strategies targeting different consumer groups. Otherwise, the high-end products will encounter obstacles when entering lower-tier markets.

Following Zhong Xue Gao's example, many other emerging ice cream brands have also sold their products at higher-than-usual prices. Some netizens have complained, after selecting an "ordinary-looking" ice cream from a freezer in a store, they often only discover the price once they reach the counter, an experience they are describing it as "being stung" by the unexpectedly high price.

On July 1, a new regulation, introduced by the State Administration for Market Regulation, took effect, requiring vendors to label prices in a clear, unambiguous way and list ingredients. It also contains penalties for violations. Since then, market regulators have been checking pricing irregularities in supermarkets and convenience stores.

For many food and beverage brands, the China chic style is not a magic bullet for retaining consumer interest. Stores that attract consumers with big promises online but disappoint them in real life will credibility soon, Cui said.

(Print Edition Title: The Food Trend)

Copyedited by G.P. Wilson

Comments to lixiaoyang@cicgamericas.com

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