4 ways to make money in the China food industry

Official data shows that China’s largest food processing companies made a combined profit of 535.96 trillion yuan (or 82.92 Billion U.S. Dollars) in the first eleven months of 2022-2024.

To succeed in the China food industry, consider these 4 strategic steps:

1. Build a Strong Brand: Cultivate a robust brand identity that resonates with Chinese consumers, focusing on quality, uniqueness, and alignment with local tastes and cultural preferences.
2. Develop Distribution Networks: Establish efficient distribution channels including partnerships with local distributors, food service operators, and retail chains to ensure widespread availability of your products.
3. Leverage E-commerce: Utilize China’s vast e-commerce platforms such as Tmall, JD.com, and Pinduoduo to reach a broader audience. E-commerce is especially crucial in China due to the high penetration of digital shopping.
4. Operational Efficiency: Streamline your operations from production to logistics to reduce costs and increase your competitive edge in the market.

By focusing on these areas, you can create a profitable business model in China’s dynamic food industry, capitalizing on the growing demand for quality food products.

Food growth 2023 +6.7%

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According to the Ministry of Industry and Information Technology, (MIIT), profit growth in these enterprises, which have annual revenues exceeding 20 million yuan, was 4.4 percentage points higher than all other industrial sectors.

MIIT data revealed that the combined profits of agricultural and sideline product processing companies reached 169.35 trillion yuan. This is 8.9 percent more than the company’s annual earnings. However, the combined profits of tea, liquor, and beverage manufacturers increased 5.6 percent to 208.02 trillion yuan.

Retail sales of beverages jumped 21.6% year-on-year in November 2020. Grain, oil, and food commodities saw a 7.7 percent increase.

China Food industry

The combined profits of China’s largest food processing companies increased 9.4 percent in the first ten months of 2020 to 485.26 billion Yuan.

Find the right snacks to sell in China

The growth of the snacks market in China is due to both increased spending power and consumer willingness to eat, According to Qianzhan the Chinese snack market will continue to grow at a compound rate of more than 6%. It was valued at 2.7 billion Yuan in 2020 and is projected to reach 4 trillion yuan by 2025. The popularity of meal replacements has increased in China’s snack market.

Snacking Habits in China
An important factor is a nutrition more than 80% of respondents place health first when selecting snacks. 88% of them are millennials; 78% pay attention to freshness. The millennial generation accounted for 85% of this percentage. These are just a few reasons why people snack. Eating snacks is a great way to strengthen relationships by sharing food.

source Daxue

China’s fast-growing food and beverage (F&B), the market is impressive. Revenue is projected to reach US$176bn in 2021. This represents 63% of global F&B revenues. The annual revenue growth rate between 2021-2025 is 8.38%.

These are our three key areas for growth and change in the F&B sector. F&B brands with a strong brand image and differentiated products will have an advantage over their competitors.

read the full report about the food industry in China

China Food & Beverage Marketing and Advertising Guide (2024)

Ongoing consumption upgrade in China

China’s current consumption upgrade trend is not new. High-end consumers in cities of high quality and luxury are buying more brand-name products, while those living in lower-tier cities are opting for cheaper products. The trend is continuing and growing, even though the COVID-19 pandemic may have slowed spending. Similar trends are being observed in the F&B sector. Consumers from China are more educated and wealthy and have a greater focus on their health and better quality of living. Products that promote healthier lifestyles are in high demand.

This trend is apparent in all sectors of the beverage industry. China’s largest beverage segment is packaged water. Purified water holds the largest share, but natural water and natural minerals have seen rapid growth in recent years due to growing health consciousness. In recent years, demand for nutritional drinks, cleanse juices, and teas with less sugar or none have been higher.

A survey on food reveals that 86% of consumers in tier 1 and 2 cities consider food safety when buying food. Fresh foods such as fruits and vegetables are in high-demand because they are natural and free of chemicals. Natural healthy packaged food like salads is another area of growth.

Consumers’ F&B choices are influenced by safety and health, but there is also a preference for the satisfaction that comes with consuming premium brands. Consumers are increasingly valuing experience and enjoyment when it comes to alcoholic beverages and will pay more to get the products they want. Premium baijiu will see a higher growth rate in 2021, and beyond. However, premiumization is the main driver of Chinese beer brewers’ profit growth.

Companies that offer a comprehensive and premium range of products that focus on the “authentic, natural, healthy, and quality” themes are in the sweetest spot for catering to Chinese consumers’ premiumization demand in the F&B segment.

E-Commerce in China is a good way to make money in China

Online shopping isn’t a new trend like the consumption upgrade trend. The COVID-19-induced lockdowns have accelerated the adoption of online shopping among consumers. With a penetration rate of 30% by 2020, e-commerce is now an integral part of Chinese consumer shopping behavior.

However, e-grocery penetration rates have remained at 10%. This is likely because fresh produce has a short shelf life and there is a high demand for logistics and convenience stores that sell on-demand products. However, the growth of online shopping habits and the expansion of distribution channels will allow for e-grocery penetration to increase to 33% by 2025.

Tmall vs TaoBao: What’s The Difference?

Opportunities in Franchises in China

The majority of F&B revenue in China comes from non-franchised establishments. This leaves a lot of opportunities to grow franchised brands.

The China Chain Store & Franchise Association estimates that China’s food & beverage (F&B), sector grew 7.8 percent in 2019 compared to 2018.

The U.S. fast-service restaurant (QSR), franchises in China are strong, but they face increased competition from Chinese franchises in categories such as leisure drinks and takeout restaurants.

China’s smaller, less developed Tier 3 or 4 cities may offer less competition for franchisors.
Below is a graph that compares the growth rates of franchise stores in China’s larger cities and smaller ones. These stories can be grouped by type: leisure drinks, local-flavor snacks and hotpot and barbecue, bakery and desserts, fast foods, and snacks.

The convenience and quality of online grocery shopping are what younger digitally-savvy consumers want. This shift is not only being adopted by consumers in Tier 1 and 2 cities but also shoppers in Tier 3-5 cities. They are expected to account for more than half the increase in the grocery market between 2019-2025.

How to Start a Successful Franchise in China

Challenges in China

-Economic slow down: F&B restaurants are one of the hardest-hit industries by the COVID-19 pandemic. Nearly all restaurants saw a sharp drop in revenue during the first quarter of 2020.

-Local Franchise Chains -Chinese brands hold the majority of the market share in the Leisure Drinks and Local Flavor Snacks subsectors.

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The 2026 market reality: what the data shows

China’s food and beverage market is one of the largest consumer markets in the world, and it keeps growing. The food service sector alone was valued at USD 454.80 billion and is projected to reach USD 956.81 billion by 2032, according to Market Research Forecast. On the delivery side, the market hit RMB 1.64 trillion (approximately USD 229 billion) in 2024, with 553 million active users, representing over 50% of China’s internet population, per Daxue Consulting. Meanwhile, food and beverage e-commerce grew at 15.8% in 2024, making it one of the fastest-expanding categories in China’s digital retail space, based on data from USDA Foreign Agricultural Service. For foreign brands, these numbers are not background noise. They are entry points.

How digital platforms changed food sales in China

Foreign food brands used to enter China the traditional way: find a distributor, get shelf space, wait. That model still exists, but it is no longer the only path, and for many brands it is no longer the fastest one.

Douyin and Xiaohongshu have restructured how food products are discovered and bought in China. Xiaohongshu now has 300 million monthly active users generating 600 million daily searches. Food and beverage categories on that platform recorded growth of 145.3%, with live-stream sales jumping 50% in 2025, according to data cited by EIN Presswire. Xiaohongshu also delivers 21.4% conversion rates for global brands, which is high for any platform anywhere.

Douyin operates at a different scale. Livestreaming commerce GMV across all categories was expected to surpass 4.5 trillion yuan in 2024. Food and grocery are a significant part of that number. Brands that produce short recipe videos, taste tests, and cooking content can reach millions of potential buyers at low cost. A single KOL (key opinion leader) post from a mid-tier food influencer on Douyin can drive thousands of orders within 24 hours.

The implication for a foreign food brand is practical. You do not need a physical store in Shanghai to generate real revenue in China. You need a content strategy on the right platforms, a cross-border e-commerce setup (Tmall Global or JD Worldwide are the two main gates), and products that can ship through bonded warehouses. Platforms like Tmall Global let brands test demand in China before committing to full local production or local entity registration. Many brands now run this way for the first 12 to 18 months, using the data to decide whether a deeper investment is worth it.

Tier-2 and tier-3 cities are also worth paying attention to. Spending in lower-tier markets grew between 3.3% and 6.2% in recent periods, while tier-1 city growth was around 2%, according to GourmetPro. Digital platforms reach those cities directly. Physical distribution would take years and significant investment to build there. Social commerce does it in weeks.

The health and functional food opportunity

One of the clearest trends in the Chinese food market right now is the consumer shift toward health-oriented products. This is not a niche preference. China’s functional foods market reached approximately 360 billion yuan in 2025, per GourmetPro. The ready-to-eat meals market is projected to exceed 1 trillion yuan by 2026. These two categories together represent a major window for foreign brands that carry credible health or quality positioning.

Yakult is a useful case to study. The Japanese probiotic brand saw a 15% sales spike in Q1 2025 after launching calcium-vitamin drops in China, according to reporting from GourmetPro. The product fit what Chinese consumers were already looking for: familiar format, clear health benefit, credible origin. Yakult did not reinvent itself. It added a product that answered a demand that already existed.

That is the pattern that works. Chinese consumers in 2025 and 2026 are willing to pay a premium, but they want proof. They read ingredient lists. They check certifications. They look at Xiaohongshu reviews before they buy. About 66% of Chinese consumers said they would pay more for products with sustainability credentials, and more than 80% plan to increase sustainable consumption, according to GourmetPro’s 2025 China market report. Organic, clean-label, low-sugar, and high-protein products all have active audiences in China.

For foreign food brands, this is a genuine advantage. Many international brands carry health or quality certifications that Chinese consumers associate with rigor: EU organic, USDA organic, Japanese JAS standards, Australian certified organic. These labels carry weight on Chinese platforms. A foreign brand from France selling natural jams or a New Zealand brand selling grass-fed dairy does not need to outspend local competitors on advertising. It needs to make its credentials visible and understandable to Chinese consumers.

Functional beverages are another high-growth sub-segment. China’s functional beverage launch index hit 253 by mid-2024, more than double the Asia-Pacific average, per GourmetPro data. That means suppliers are launching fast, which also means competition is real. The brands that cut through are the ones with a specific, believable claim: gut health, energy, sleep, immunity. Vague “wellness” positioning does not convert in China. Specific benefits, backed by visible ingredients or certifications, do.

What changed between 2024 and 2026

The regulatory environment tightened considerably. The General Administration of Customs (GACC) issued Decree No. 280, which replaces the previous Decree No. 248 governing overseas food manufacturer registration. It takes effect June 1, 2026. The key change is that GACC moved from a fixed list of 18 food categories requiring official recommendation to a dynamic, risk-based catalogue system, according to DigiComply. GACC now classifies manufacturers based on their country’s food safety track record, historical contamination data, and product risk profiles. A brand from a country with a weaker food safety record faces more scrutiny than one from a country with a strong bilateral food safety agreement with China.

Labeling rules also changed. China published revised food labeling requirements with full enforcement expected by March 2027. The transition period is two years, but brands entering the market now need to design packaging that meets the new standards. Getting this wrong means customs holds and product destruction, which are expensive problems.

On the platform side, JD.com entered the food delivery space in 2025, breaking the long-standing duopoly between Meituan and Ele.me. This added a third serious player to instant delivery, which means more options for brands distributing through O2O (online-to-offline) channels and potentially lower commission rates over time as competition increases. The delivery infrastructure itself has improved: cold-chain logistics handled 365 million tons of volume in 2024, up 4.3% year on year, per GourmetPro data. That makes it easier to sell fresh and refrigerated food products through online channels than it was two or three years ago.

Frequently asked questions

How do foreign food brands register to sell in China?

Foreign food manufacturers exporting to China must register with the GACC (General Administration of Customs of China). As of June 1, 2026, this is governed by Decree No. 280. The process requires submitting documentation on your facility, food safety management system, and product categories. Some categories require official recommendation from your country’s competent authority before GACC will review your application. Registration timelines vary by product category and country of origin, typically ranging from a few weeks to several months. Beyond facility registration, imported food products must also meet Chinese labeling standards in Mandarin, including ingredient lists, allergen declarations, and nutritional information in the required format. Working with a China-based regulatory consultant before launch saves time and avoids costly rejections at customs.

What is the best platform to sell food online in China?

It depends on your product type and budget. Tmall Global and JD Worldwide are the main cross-border e-commerce platforms for foreign brands that do not yet have a Chinese entity or local inventory. They allow you to sell from a bonded warehouse or directly from your home country. For discovery and brand-building, Xiaohongshu and Douyin are essential. Xiaohongshu works especially well for premium and health-positioned food products because its users actively research before buying. Douyin is stronger for impulse and volume, particularly if you are willing to invest in livestreaming. Most brands that succeed in Chinese online food sales use a combination: Tmall or JD for the transaction, Xiaohongshu or Douyin for the awareness. Starting with one platform and expanding once you have working content and a supply chain is the practical approach.

How much does it cost to enter the China food market?

Costs vary widely depending on route. A cross-border e-commerce setup via Tmall Global has lower upfront costs than establishing a local entity: Tmall Global deposits range from USD 10,000 to USD 25,000 depending on your brand tier, plus annual service fees and revenue-share commissions of around 2 to 5%. If you go through a distributor, the main cost is margin: Chinese distributors typically take 30 to 50% depending on the product category and their added services. Adding a digital marketing budget for Xiaohongshu or Douyin KOL campaigns typically starts at USD 5,000 to USD 15,000 per quarter for initial testing. Regulatory compliance, including labeling redesign, product testing, and GACC registration support, adds another USD 3,000 to USD 10,000 in first-year setup costs. Total first-year investment for a cross-border entry with digital marketing sits between USD 30,000 and USD 80,000 for most mid-size food brands.

What food products sell best in China for foreign brands?

Dairy products (especially infant formula, cheese, and butter), health supplements, snacks with clean-label positioning, premium alcoholic beverages, coffee, and specialty ingredients consistently perform well for foreign brands in China. The ready-to-eat meals category is growing fast, projected to exceed 1 trillion yuan by 2026. Functional foods and beverages with specific health claims (gut health, immunity, energy) are also high performers. Products that carry a clear country-of-origin story tend to do better than generic international brands: French cheese, Australian beef, Japanese rice crackers, and Italian pasta all benefit from geographic credibility in the Chinese consumer’s mind. Products without a strong origin story or health angle face much more price competition from local Chinese brands, which have improved quality significantly and can produce at lower cost.

How to move forward

If you are a foreign food brand looking at China seriously, start with three things. First, check your regulatory position. Decree No. 280 is now in effect, and getting your GACC registration right from the start avoids costly delays. Second, build your digital presence before you worry about physical distribution. A credible Xiaohongshu profile and a few well-placed KOL reviews will tell you within weeks whether there is genuine appetite for your product in China. Third, choose the right platform for your first transaction layer. Cross-border e-commerce via Tmall Global or a direct-to-consumer setup on Douyin Shop lets you generate revenue without a local entity and without the full cost of a distributor relationship. Once you have sales data and consumer feedback from those channels, you can make a better-informed decision about whether to invest in a local entity, a warehouse, or a wider distribution network. The China food market rewards brands that test fast and adapt, not brands that spend two years planning a perfect launch. If you want help building that strategy, get in touch with the team here.

Marcus Zhan is a China marketing specialist based in Shanghai. He covers digital marketing, consumer trends, and brand strategy for the Chinese market. Connect with him on LinkedIn for more China food and beverage market insights.

Sources: Market Research Forecast, China Food Service Market 2025 | Daxue Consulting, China Food Delivery Market | USDA Foreign Agricultural Service, China E-Commerce Report | GourmetPro, China Food Market Outlook 2025 | DigiComply, China GACC Decree 280 June 2026 | EIN Presswire, Xiaohongshu 300M Users 2025