Beijing's Food Industry to Face Intensive Competition and Restructuring

Strategic Insights -

Beijing's food market is set to face significant changes as the city's food industry prepares for increased competition from overseas food giants after China's entry into the World Trade Organization (WTO). According to Li Shijing, deputy director of the Beijing Food Industry Association, only 5,000 of the city's food companies will be able to survive the intense competition, with the remaining half facing the risk of being eliminated from the market. The city's food industry had turnover of about 80 billion US dollars in 1999, but experts believe it has the potential to double its food retail sales to 100 billion yuan by 2010.

Key Takeaways:

  • Only 5,000 food companies in Beijing will be able to survive the intense competition from overseas food giants after China's entry into the WTO, with the remaining half facing the risk of being eliminated from the market.
  • Foreign food products occupy almost half of the Beijing market in terms of sales, including imports such as milk, chewing gum, chocolate, flour, and ice cream.
  • Chinese-made food products are uncompetitive due to poor quality, packaging, and marketing compared to imported food products.
  • The top 10 selling food products in Beijing have over three fourths of foreign names, indicating the dominance of imported products in the market.
  • China's food industry had turnover of about 80 billion US dollars in 1999, only one-fourth of that of the US food industry.
  • Experts predict that most small companies without specialized products will be eliminated from the market due to intensified competition.
  • Beijing's food retail sales could double to 100 billion yuan by 2010, according to experts.

Statistics:

  • 50% of Beijing's food enterprises will be eliminated from the market in the next decade (as predicted by Li Shijing).
  • 5,000 food companies in Beijing will be able to survive the intense competition from overseas food giants (as predicted by Li Shijing).
  • 50% of the Beijing market in terms of sales is occupied by foreign food products (according to Li Shijing).
  • 80 billion US dollars was the turnover of China's food industry in 1999 (as stated by Li Shijing).
  • 100 billion yuan is the predicted double in food retail sales in Beijing by 2010 (as stated by experts).

Sources:

  • Today's China Daily
  • Xinhua News Agency
  • COMTEX (http://www.comtexnews.com)