A common approach for examining the general business environment is doing a DESTEP analysis. To be able to manage the future opportunities and threats the demographical, economic, social, technological, ecological and political factors will be analyzed. In the following we will execute a DESTEP Analysis on the food sector of the Chinese market.
Urbanization has been of great influence on the consumption of nuts.
According to Yang and Gale (2015) per capita purchases of nuts by urban residents are 2.5 times higher compared to the rural residents.
The urban population in China has been increasing annually and is now 52 percent of the whole population. ...view middle of the document...
"Inflation will likely retreat starting in March. The rise should be temporary as seasonal factors dissipate," According to Li-Gan (2016)
In 2008, a crisis in confidence in China's food industry emerged after melamine was found in domestically produced baby formula. 300,000 babies were sickened and it resulted in 6 premature deaths. Other stories of diseased pork, fake eggs, gutter (recycled) oil, mislabeled meat and more have only led to distrust of China’s food industry and calls for reform. This has also led to a demand of foreign brands.
Each year foreign food imports have increased 15 percent in recent years, and the number of food imports has more than quadrupled in the last ten years. China is expected to become the top importer of foreign food products by 2018, with the total value of RMB 480 billion (US$77 billion).
Organic food was once seen as a luxury food item, but now imported organic foods are an increasingly accessible option for the Chinese consumer with a growing income. The consumers are typically middle and upper class with children. In a consumer study with the help of 204 Chinese organic consumers in Beijing and Shanghai, 71 percent were willing to pay a premium of 20 to 50 percent for organic products. Also the top five reasons for buying organic were all related to food safety and quality assurance. The Chinese organic food market has tripled since 2007 to 1.01 percent of total food consumption, which is still lower than the market in Europe and the U.S of 5 to 8 percent.
The Chinese ICT sector is growing substantially. It is an important sector for the Chinese government. At the end of 2015, China had nearly 700 million Internet users, more than double the population of the United States. China’s new Internet users are mainly mobile native, with more than two-thirds preferring to surf on their smartphones.
What is fascinating are the changes in Internet habits amongst Chinese Internet users. In 2015, the growth in online payment and online trading in stocks were considerably high, with usage rates expanding to a whopping 37 percent and 54 percent.
This trend is a good sign for companies...