Everything bakery brands need to know about doing business in China
By 2030, China’s bakery market is anticipated to achieve a market size of $162.4bn. The expanding middle class with higher disposable incomes is a significant driver, while the popularity of Western-style baked treats are becoming staples as consumers seek out variety.
Like elsewhere around the globe, they are increasingly aware of health and wellness, leading to a rising demand for healthier baked goods (wholegrain, low-sugar, low-fat) while dairy products have been experiencing significant growth, sought out for their nutritional benefits (calcium, protein and vitamins) and Western appeal.
This growth trajectory is attracting an increasing number of stakeholders, bakers and buyers not only to procure advanced equipment and ingredients, but also to capitalize on a relatively untapped opportunity to date of setting up a footprint within this massive market.
Fostering an easier business environment
The Chinese government, too, is extending the welcome to foreign businesses to form joint ventures and partnerships with local companies (helpful in navigating the local market, understanding consumer preferences and complying with regulatory requirements).
It has implemented a series of economic reformed aimed at making it more favorable for foreign investment, establishing Special Economic Zones (SEZs) and Free Trade Zones (FTZs) and streamlining many of its regulations to simplify the business registration process and reduce bureaucratic red tape. The Foreign Investment Law, for example, which came into effect in 2020, aims to create a more transparent and predictable business environment. The government also offers incentives, such as tax breaks, subsidies and grants, to foreign businesses in certain sectors or regions.
“More and more international buyers and professional bakers and industrial bakers are coming to China to source equipment, bakery needs and looking forward for new innovations and new trends,” said Zhen Hongguo, president of Filipino-Chinese Bakery Association.
“The Chinese market is enormous and offers a lot of opportunities,” added Sophie Zhang, VP of international marketing for the China Association of Bakery and Confectionery Industry and Bakery China Exhibitions Co, which co-host Bakery China, one of the largest and most influential bakery trade shows in the world.
Bakery China has long been the preferred platform for entering the Chinese market.
“I think a lot of Westerners consider our products and services very reliable and trustable. The price is also right, particularly for companies who want to find long term business,” she told Bakery&Snacks.
The Chinese government also recently extended its visa-free policy – up to 15 days for business, tourism, family visits and transit purposes – to include Switzerland, Ireland, Hungary, Austria, Belgium and Luxembourg. They joined France, Germany, Italy, the Netherlands and Spain, which were offered visa-free travel last November.
As an Irish citizen, this made my attendance at this year’s event even easier.
Breaking it down
Bakery China is renowned for its extensive exhibition space, spanning several halls that showcase the industry’s current state and specific developmental prospects.
The 26th annual event reached unprecedented heights, covering a floor space of 320,000m2 to serve the entire value chain.
With over 2,200 exhibitors from more than 30 countries, it showcased an impressive array of over 100,000 brands and garnered a remarkable 393,009 visits from professional buyers from over 130 countries and regions.
“The scale of this year’s show hit a new record, up from 280,000m2 and 300,000 visitors last year,” said Zhang.
“The number of international exhibitors also tripled,” she added, underscoring the event’s importance within the global market.
Internationals accounted for 20% of the total exhibitors booked for 2024, which saw the international pavilion space expand by more than 50%. With over 7,000 international visitors preregistered, the organizers enhanced its International Trade Match-Making to make business more user-friendly.
“Since 2014, we have focussed on improving access for international companies, in terms of exhibitors, researchers and visitors,” Zhang said, adding the aim is to provide insight into the industry’s diverse scenarios and country’s assorted demographics, while offering a platform for countless business opportunities.
“We also regularly go abroad to visit our competitors, to learn more about those markets and their procedures to see how we could improve the international level back home.”
These include iba in Germany and the American Bakery Association’s IBIE (International Baking Industry Exposition), which also hold substantial influence and attract large international participation.
“Keeping up with those strategies and using different marketing procedures for the past 10 years is really paying off,” said Zhang.
Beyond zones focused on ingredients, equipment and packaging, this year’s show introduced new zones, including Pre-Made Bakery Festival, OEM & Private Brands, dairy products (which alone featured nearly 100 leading brands such as Lactalis, Nestle and Arla), healthy bakery and Bakery+. The Bakery China Go Green demonstrated responses to global decarbonization and emission reduction initiatives.
“Our theme this year ‘Shaping Global Innovations’,” said Zhang.
As such, “we had all the traditional pavilions like ingredients, packaging solutions and machinery to showcase the latest innovations, along with new ones to focus on different areas.”
Additionally, over 100 conferences, forums, thematic events and competitions provided insights from hundreds of business leaders, bakery masters, celeb chefs and market researchers like Euromonitor, Innova and Mintel.
“We have also made it easier for visitors to navigate the show,” said Zhang.
For visitor convenience, iBakeryChina is an advanced digital online platform seamlessly integrating business enquiries and offers, industry innovation, knowledge exchange, trends and insights and exhibition services. With 4,000+ registered suppliers and connections to 500,000+ buyers, the networking platform boasts tens of thousands of SKUs. Bakery China 2024 also introduced the Indoor Navigation System @iBakeryChina to elevate the user experience.
“The exhibition is very big and visitors could easily get lost, so we have provided a range of event-specific apps – like WeChat, Weibo, TikTok and Little Red Book – to navigate the mammoth event,” said Zhang.
However, Zhang admits that “cultural barriers will always be a challenge because Westerners think differently to Chinese businesspeople.
Bakery China Autumn & China Home Baking Show 2024 will take place in Wuhan from October 17-19, 2024.
The 27th Bakery China is set to be held at the NECC, Shanghai, from May 19-22, 2025
“But we’re working on that and looking at all angels from everyone’s point of view.”
She recommends that those interested in doing business in China to visit Bakery China first as a visitor to see what’s on offer, talk to people, find out a little bit more about the country and the market, along with the ramifications of doing business there.
She also welcomes feedback, both good and bad.
“We sincerely accept suggestions to make things better,” she invites.
Grabbing a slice of the market … with a backstory
I met up with first-time exhibitor Vincent Liew, CEO of Bowan Island Artisan Bakehouse, and asked why the Australian bakery manufacturer had chosen to exhibit at Bakery China.
“It’s not easy to break into the Chinese market because it’s very competitive,” he admitted, adding he expects the tradeshow to open more opportunities.
However, Liew advises putting a solid strategy in place before even contemplating tackling the local market.
“Especially, your product’s backstory. Quality obviously has to be good and pricing has to be right – those are prerequisites, but not the winning formula. In China, it’s all about the story.
“Like our heritage. Our sourdough is 85 years old and has a more flavor, just like a wine. A young vineyard won’t give you the same depth that an old vineyard with 100-year-old trees will give you. So, we have the right story and that is what’s important in the Chinese market,” he told Bakery&Snacks.
Bowan Island’s story began on the founder’s return from his travels in the Pacific Northwest, bringing back with him the 85-year-old starter that was gifted to him. He opened Bowan’s first stall at the Rozelle Markets in Sydney in 1989. Bowen’s first Artisan Bakehouse was opened in Drummoyne in 1996 and remains open today. It is here the bakery’s signature cold process was fine-tuned.
“Our starter has been continually fed, nurtured and curated for 85 years – making it the oldest in the world – which has allowed us to develop the signature full-bodied flavor present in every Bowan Island loaf,” said Liew.
He added sourdough is becoming popular in China, but “it’s still at the beginning of the lifecycle. We want to share its natural fermentation with local consumers, which is healthier and has a bigger attraction for the younger generations.
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“We’re getting good feedback. One customer, who lived in Melbourne for 44 years but now lives in China, said he’d been looking for good sourdough in China. He couldn’t find it, but our sourdough reminds him of the taste that he was missing.”
Liew said the company currently produces all its products in Sydney where the majority of its ingredients are sourced.
“We export our product frozen, especially for the foodservice channel. It should be brought back to room temperature before being baked in the oven for 7-8 minutes to get a really nice, fresh, crispy loaf.”
He added Bowan Island currently works through local distributors who know the brand and like its story.
“We are not thinking of opening a production facility here, but we do have a partner in Shanghai who may be keen to open a flagship store for us in China.”
