China is currently one of the most lucrative markets for ice cream and is expected to expand by $6.6 billion by 2026 with a CAGR of 3.8 percent. Artisan ice cream registers the most significant value within the industry with a CAGR of over 4.5 percent, followed by the take-home and bulk ice cream categories.
"Rising consumer purchasing power has catapulted China to one of the world's top ice cream markets. Consumers are spoilt for choice, with thousands of international and domestic brands fighting for shelf space. Innovation is rife, with consumers demanding natural and healthy formulations and novel flavours. By tapping events, such as the Single's Day and 618 shopping festivals, and occasions such as the Qixi Festival and the Chinese New Year, leading brands have broken the perception of ice cream as a seasonal treat," said Bobby Verghese, Consumer Analyst at GlobalData.
The Chinese ice cream market has diverged, with both value-for-money and premium brands gaining equal traction. Premium brands have gained significant appeal, supported by quality- and brand-conscious Millennial and Gen Z consumers who are influenced by Western culinary trends.
There is ample room for further market growth, as the region's spending average sat at US$2.7 while the global average was US$5.4.
Convenience stores were the leading distribution channel for ice cream, followed by hypermarkets, supermarkets, and food and drinks specialists. The top three companies in 2021 were Yili Group, Unilever and China Mengniu Dairy.
However, the new wave of Omicron may temporarily halt consumer spending.
"The Omicron caseload resurged in late 2022 as authorities relaxed the stringent Zero-COVID policy amid the economic slowdown and rising public resentment. With consumers sheltering at home, on-premise and on-the-go consumption of ice cream will be hit. Moreover, the rising raw material costs due to the pandemic and the Russia–Ukraine conflict are escalating product prices. Urban shoppers are already bemoaning the dearth of cheap traditional popsicles in retail stores. Also, authorities are cracking down on obscure local brands that sell costly ice cream without clearly indicating prices on packaging labels."
