Mainland China Food Imports: Putting E-Commerce on the Menu

The ubiquitous adoption of online shopping in China in recent years, coupled with the impact of the Covid-19 pandemic, has meant that mainland consumers are even more eager than before to buy quality products on cross-border e-commerce platforms, with food being one of the most sought-after products. Hong Kong companies wishing to tap the mainland food market can try offering their products on cross-border e-commerce platforms first, using the e-commerce retail model to test the water of the mainland market. Products purchased through cross-border e-commerce are subject to simpler and easier customs clearance processes enforced by the mainland customs authority, which greatly facilitates retail imports of food products from Hong Kong companies to the mainland market. Hong Kong food industry players can move on to exporting more products to the mainland market under the “general trade” arrangement after ascertaining that their food products have gained the favour of mainland consumers.

Online food import channel

At a seminar on mainland China’s food imports market [1] organised by the Hong Kong Productivity Council (HKPC) in June, Wing Chu, head of HKTDC Research’s Business Advisory Section, pointed out that the demand for quality imported food products from mainland consumers is huge. He added that Hong Kong companies looking to enter the mainland market can use the cross-border e-commerce retail channel to sell their products directly to individual mainland consumers in small quantities [2]. According to a Ministry of Commerce circular on improving the oversight of retail imports in cross-border e-commerce (Shang Cai Fa No. 486 [2018]), imported goods purchased by individual mainland consumers through cross-border e-commerce retail are classified as imports for personal use and, as such, are exempted from the approval, registration or filing of a licence for first-time imports. The simpler and easier customs clearance process has greatly facilitated the import of foods from Hong Kong and other foreign food companies into mainland China. At the same time, regulatory requirements such as registration and Chinese labelling prior to the import of foods into the mainland have also been streamlined. However, these products can only be purchased by consumers for personal consumption and cannot be resold.

Currently, mainland consumers’ annual limit for retail import transactions in cross-border e-commerce is RMB26,000 per person. Products purchased within the annual limit for cross-border e-commerce retail imports are eligible for a 0% tariff, 70% of the import value‑added tax (VAT) and 70% of the consumption tax. This measure further attracts consumers to buy quality products online from all over the world.

Huge appetite for imported foods

Mainland consumers are willing to spend big money on quality food and drinks from different parts of the world. According to the figures released by the General Administration of Customs (GAC), the value of mainland China’s food imports has been climbing steadily in recent years, doubling from US$102.1 billion (HK$801.3 billion) in 2016 to US$208.9 billion in 2021, an average annual growth rate of 19.6%. Among the various kinds of imported foods, plant products (including vegetables, fruits, seeds, and industrial or medicinal plants) accounted for nearly half of the total in terms of value, followed by animal products (including meats, aquatic products and dairy products), which made up 27.3%, while prepared foodstuffs and beverages comprised 15.6%.