May 31, 2017|
Coffee or Dessert? Chinese Consumers Are Ordering Both
KitchenAid and De’Longhi Launch Stores on JD Worldwide as Chinese tastes change
Appliance brands KitchenAid and De’Longhi are deepening their partnerships with e-commerce giant JD.com, China’s largest retailer, as Chinese consumers are bringing home their growing love of coffee and desserts.
Consumption of coffee and baked goods have soared in China for years, but largely as an indulgence in Western-style cafes in China’s first and second-tier cities. Most Chinese apartments do not come furnished with ovens.
Now, data from JD shows demand is growing for everything from high-end embedded ovens to coffee makers and stand mixers, creating a fast-growing market for international brands. JD has offered ovens for home use for years, but sales, including those of table top convection ovens and embedded ovens, took off in 2015 with more than 4 million units shipped directly from JD in the last two years.
Consumers with more spending power in top tier-cities who previously purchased lower-cost convection ovens are now upgrading to higher-end products, while shoppers in lower-tier cities are beginning to buy baking products as well. Meanwhile, sales of stand mixers on JD grew nearly five-fold from 2014 to 2016, enjoying the most popularity among young shoppers born after the 1980s and 1990s.
To tap this burgeoning market, KitchenAid, is opening a store on JD Worldwide, a cross-border e-commerce platform that ships goods direct from brands anywhere in the world right to consumers’ doorsteps in China. The store will expand the mix of KitchenAid products available to some 236.5 million customers on JD.com.
Meanwhile, another traditionally Western indulgence—coffee—is also experiencing a boom. According to GfK, the compound annual growth rate of family use coffee machines in China has reached more than 50% over the last three years. The number of coffee machines JD sold in 2016 nearly doubled from 2014. Interestingly, while the interest in baked goods has tended to be among younger consumers, coffee makers did particularly well with people over 45, perhaps reflecting the strong inroads coffee brands like Starbucks have made in China over the last two decades.
“People don’t typically associate China with baking, but in the last three years we’ve seen a surge in its popularity,” said Ting Qi, General Manager of JD Worldwide. “JD.com’s customers in urban areas are gaining more exposure to international products and experiences. Chinese consumers are changing from coffee drinkers to coffee brewers, and they’re doing their own baking at home. The shift in Chinese consumption presents a tremendous opportunity for international brands.”
“We are seeing unprecedented opportunity for growth in China as middle class consumers are looking for high-quality products to match their desire to upgrade their overall lifestyles,” said Eric Su, CEO of KitchenAid Greater China. “It was important for us to partner with an e-commerce company as trusted as JD.com to bring to China the cooking experience, design and quality we have long been known for in the U.S. and Europe.”
Italian appliance maker De’Longhi Group also is also opening a direct sales store on JD Worldwide and sells products including imported retro-style coffee makers, and Braun and Kenwood hand mixers, which are not otherwise available in mainland China. JD and De’Longhi have cooperated since 2010.
“China’s love affair with coffee is growing fast, but is still in its beginning stages,” said Gilbert Zong, CEO of De’Longhi Greater China. “As one of the largest retailer of home appliances in China, JD.com provides a unique opening for us to reach that burgeoning market.”