China’s middle-class people have come up with a new solution to cope with the difficult economic situation: using food that is almost expired.
According to the Financial Times, these Chinese people think that the food that is about to expire is cheaper but the quality is not changed.
Even in the past 1 year, nearly 20 businesses specializing in trading and distributing nearly expired products have been established and registered for operation.
These shops sell items like Nestlé 100 gr cans of coffee for 3 yuan ($0.45), or 330 ml bottles of mineral water for 5 yuan, all of which are close to the date and, of course, cheap. Much more than the listed price.
The trend of buying expired goods creates a new fever
Hotmaxx – the company that leads in the field of discount sales – has had to increase the number of employees from 20 to more than 500 people since the outbreak of the disease.
“The majority of our customers are office workers and workers, who live off of food that is about to expire like this.” This number is very surprising,” commented Zhang Yi, head of research at consulting firm iiMedia (based in Guangzhou).
iiMedia conducted a survey late last year with more than 1,600 people buying expired food and drinks, two-thirds of the respondents earn more than 4,000 yuan per month, which is a benchmark used to divide class middle class and low income.
For example, Ms. Jane Lu is an insurance salesman in Shanghai who leads a normal life. She shared that she had started using the drinks that were about to expire and saved 600 yuan compared to drinking regular soft drinks. If you buy at regular stores, Ms. Lu will lose up to 1,000 yuan.
The habit of using items that are about to expire was formed during a period when the economy was severely affected by the Covid-19 pandemic. The crisis has made most people precarious.
“I cut costs no matter how much I earn,” Ms. Lu said.
According to iiMedia, foods with a long shelf life such as canned goods or beef jerky are always sold out. Other ready-to-eat foods that are about to expire are only ranked second in terms of scarcity.
“The price is much cheaper but the quality seems to be unchanged is what helps people find food that is about to expire,” said Shaun Rein, director of consulting firm China Market Research. “Now people are looking for ways to save as much as possible,” he added.
China Market Research forecasts that industry sales will increase from 25 billion yuan in 2019 to 36 billion yuan this year.
Bargain from the fever
In the second quarter of this year, China’s economy recorded its slowest growth in two years. According to National Bureau of Statistics (NBS) data released on July 15, GDP of the world’s second largest economy increased by only 0.4% compared to the same period last year.
This figure is much lower than the 4.8% increase in the first quarter and observers’ forecast.
One of the reasons for this fever is due to the extremely abundant inventory of food, which is about to expire, of factories and distributors due to the prolonged blockade.
David Wang, the owner of an expiring food store in Beijing, said that he once imported 5,000 cakes with only about a week left to expire at the price of 20 yuan each, half the listed price. After that, Wang sold it for 30 yuan each and sold out after a few days thanks to the low price.
But Mr. Wang said: “This business model is not sustainable” because the bans are being eased, and of course he can’t make money as easily as before.
“The problem with sellers is that they can’t find a sufficient supply of these types of goods. Delivery time will be measured in minutes, not days,” said Rein.
However, an unnamed executive of Hotmaxx said that they will still pursue this business model despite many risks in the near future. Even the future plan of the company is to increase from 500 to more than 4000 stores by 2025
“We broke the traditional pricing system. A lot of brands are looking to cooperate with us,” the director affirmed.
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