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Better Refrigerators for Chinese: Cold Cash for U.S. Agribusiness
By Scott Reynolds and Mabel Zhuang
Not until the mid-1980s did Chinese families enjoy the benefits of home refrigeration. What a difference a decade makes! Back then, only 7 percent of urban families could claim the small, single-door coolers. Now over 70 percent of the Chinese population enjoys the convenience.
Changing lifestyles brought about a demand for home refrigeration. It's no longer the norm for three generations to live together, with the grandparents buying groceries early every morning in the wet market (street market that sells fresh staples).
Younger working couples with rising incomes and less free time buy convenience foods at the supermarket--and therefore need a refrigerator with a freezer section that will hold a week's worth of food.
Joint-Venture Plans Regionally
The Maytag Corporation, with joint-venture partner Rong Shi Da, plans to give their Chinese customers exactly what they want. Maytag has invested $100 million in a new factory in Hefei, Anhui Province, to bring large-scale refrigerators online by June 1998. This comes just in time to help meet a projected yearly demand of 13 million units by the year 2000.
Maytag's preliminary market research came up with the findings that shaped production plans--a more sophisticated, brand-conscious consumer wants well-designed, efficient and environmentally friendly refrigerators. Most in demand are units in larger sizes, ranging from 210 to 263 cubic liters.
And the company plans to customize their units by regional usage. Northern Chinese customers, who like frozen meats, dumplings and desserts, get 60-percent freezer space. On the other hand, southern Chinese consumers, preferring fresh foods but cold drinks, are expected to opt for 25-percent freezer space. For customers in eastern and central China, with fewer specific needs, Maytag foresees a yen for 50-percent freezer space.
Besides upgrading to a larger box, the Chinese family is often buying a second, smaller unit for storing chilled drinks.
For U.S. exporters, the increased refrigeration space will translate to sales as demand increases for high-quality frozen and chilled foods. Imported frozen foods such as poultry parts, sliced beef, seafood, french fries and vegetables like corn and peas are gaining popularity.
Confirming this trend: A recent nationwide survey indicated that the number of households purchasing frozen foods had jumped from 13 percent in 1994 to 38 percent in 1997.
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Scott Reynolds is the Agricultural Trade Officer and Mabel Zhuang is the secretary at the FAS Agricultural Trade Office in Shanghai, China. Tel.: (011-86-21) 6279-8622; Fax: (86-21) 6279-8336; E-mail: atos@public.sta.net.cn
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