Bargain-hunting Chinese shoppers stoke the craze for soon-to-be-expired foods

Bargain-hunting Chinese shoppers stoke the craze for soon-to-be-expired foods

China’s middle-class consumers are stirring up a new craze as they adjust to tougher economic times: a rush to buy soon-to-expire food and drink at super bargain prices.

According to public records, 119 companies specializing in items approaching their expiry date have been registered in the past 12 months, compared to 92 in the previous decade.

These stores sell products ranging from 100g cans of Nestlé coffee for Rmb3 ($0.45) to 330ml bottles of mineral water costing Rmb5 each.

Hotmaxx, a leading discount company, has grown its workforce by a factor of 20 to more than 500 employees since the eruption of the Covid-19 pandemic in January 2020.

“A surprisingly large number of white-collar workers rely on nearly expired food to make ends meet,” said Zhang Yi, chief researcher at iiMedia, a Guangzhou-based consultancy.

According to an iiMedia survey of over 1,600 expiring food and drink shoppers late last year, two-thirds of respondents earned more than Rmb 4,000 per month – which the cabinet sees as the dividing line between middle and low income status. .

This year, Jane Lu, a Shanghai-based insurance broker, started spending Rmb600 a month on near-expiry imported drinks that would have cost more than Rmb1,000 in regular stores.

Lu, 32, said she decided to do so after the Covid-19 lockdowns and property turmoil weighing on the country’s economy made her monthly income stream less stable. “No matter how much I earn, I cut corners where I can,” she said.

China’s economy grew just 0.4% year-on-year in the second quarter – much slower than expected and the worst quarter since it shrank 6.8% in the first quarter of 2020.

Shelf-stable snacks, such as potato chips and beef jerky, are in particular demand, according to the iiMedia survey. Other popular items include dairy products and instant meals that are nearing their expiration date.

“Consumers are looking to buy nearly expired food because the produce is still good quality but cheaper,” said Shaun Rein, managing director of China Market Research Group, a Shanghai-based consultancy. “Right now people are looking to save as many renminbi as possible.”

China Market Research Group expects industry sales to grow from Rmb 25 billion in 2019 to Rmb 36 billion this year.

Another factor driving the soon-to-expire food boom is high levels of inventory among factories and distributors affected by China’s strict Covid-19 shutdowns.

David Wang, owner of a discount food store in Beijing, said that in April he bought 5,000 cakes with a shelf life of less than a week from a global fast-food chain for Rmb20. each – half the regular wholesale price – after the capital city banned indoor dining to stem an outbreak of Omicron.

Wang priced the snacks at 30 Rmb each and sold them out in three days. “The profit margins were very lucrative,” he said.

But Wang added that it had been harder to repeat the success of his cake deal after Beijing’s stability and outbreak restrictions eased. “It’s hard to make this business sustainable,” he said.

“The biggest problem for merchants is where they can get enough of these products,” Rein said. “They have minutes, not days, to secure [supplies].”

A Hotmaxx executive, who asked not to be identified because he was not authorized to speak with foreign media, said the company was confident despite these challenges. Hotmaxx, which has about 500 outlets, plans to open 4,500 more stores by 2025.

“We have disrupted the traditional pricing system,” the executive said. “A lot of brands want to work with us.”

The person added that the supply issues were manageable, especially since buyers of nearly expired products are not selective about the brands available. “If we don’t have Coke,” he said, “we’ll give you Pepsi.”

Additional reporting by Nian Liu and Emma Zhou in Beijing

#Bargainhunting #Chinese #shoppers #stoke #craze #soontobeexpired #foods

Leave a Comment

Your email address will not be published.