Functional benefits remain white space in China’s snack market, Mintel

Chinese manufacturers should take inspiration from foreign salty snack brands when developing new products, says Mintel. Pic: ©iStock/michaklootwijk

A Mintel report shows that the Chinese snack food sector is fragmented, with the top 10% companies accounting for only 11.7% of market share.

This indicates “great space” for small players and new entrants to seize part of the market share, the report released earlier this year said.

By 2016, the retail volume of the salty snacks market in China is estimated to have reached 2,675,600 tons and grown at a CAGR of 11.7%, according to Mintel. It expects the total volume sales will continue to grow and reach 4,104,400 tons by 2020.

Currently, PepsiCo still makes up the largest share in the Chinese snack market with 3.3% total market share, followed by Qiaqia Food with 2.9% market share and Orion Confectionery with 1.4%, it was reported.

Qiaqia catches up with Three Squirrel

It noted the number one e-commerce snack brand, Three Squirrels, only has 0.4% share in entire domestic snack market.

“[Three Squirrels] is active in leveraging hot online topics in marketing campaigns to increase brand visibility and engagement with a young online population,” Mintel said.

“For example, the brand ran a campaign via Weibo (similar to Twitter) counting the days left before the national exams. The campaign featured fun cartoon drawings highlighting the three squirrels (the brand’s icons) studying hard.”

Qiaqia has announced its goal to become the top online seeds brand and aims to close the gap between the leading internet snack brands, including Three Squirrels, by 2017, Mintel added.

During the past year, Qiaqia launched caramel sunflower seeds, which are considered an “innovative” snack product by many Chinese consumers. The product retails in a 108g pack featuring the WeChat (Chinese SnapChat) QR code to win the prizes.

Salty snacks should highlight functional benefits

Mintel research found that consumers are less likely to eat snacks when feeling sluggish and in need of an energy boost compared to other occasions.

“Salty snacks could highlight their functional benefits to exploit such usage occasions,” the market research firm suggested.

Nut lovers, for example, “are more likely to eat nuts when feeling hungry between meals and need an energy boost. Brands could increase the consumption frequency by highlighting the high nutritional values and distribute their products in gyms and sports centers where people are more likely to look for energy-boosting foods.”

In addition, the research shows health benefits are among the key drivers in encouraging consumers to eat more salty snacks, as over half of consumers agree nutritional value is as important as flavor.

“Chinese manufacturers can take inspiration from foreign salty snack brands when developing new products with innovative product formats, packaging and health benefits,” Mintel suggested.

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