Chinese rich are fleeing overseas while white-collar workers who cannot migrate are struggling to have enough food and clothing as their pockets shrink. The government has released the GDP for the second quarter of only 0.4% year-on-year, far below the expectation.
Amid an uncertain economic outlook, white-collar workers have to cut off the budget for daily necessities. Food that is close to out-of-date becomes their favorite.
According to Financial Times, middle-class consumers are fanning a new craze as they adapt to tougher economic times: a rush to buy soon-to-expire food and drink at deep discounts. 119 businesses specializing in items approaching their expiry dates have been registered within the past 12 months, compared with 92 over the previous decade.
Hotmaxx, owner and operator of discount grocery stores in China, has become successful with its business idea. The company’s grocery stores mainly provide food products that either have a close expiration date or are having low sales in the market, enabling customers to purchase food products at much lower prices.
Since the Covide-19 outbreak in January 2020, Hotmaxx has expanded its workforce from 20 to 500 employees. As the leading company in the discount sector, Hotmaxx has about 500 outlets, and plans to open 4,500 stores more by 2025.
According to an iiMedia survey conducted late last year, the demand for expiring food is growing especially from the middle-class who earned more than 4,000 yuan per month. They are also interested in so-called “mystery boxes” that contain random leftover food at bargain prices.
Covid lockdowns coupled with real estate turmoil weighing on the economy making people more cautious on expenditure. Shaun Rein, manager director of China Market Research Group (CMR), a Shanghai-based consultancy, said, “Consumers are looking to buy near-expiry food because the products are still of good quality but cheaper.”
He added, “Right now, people are looking to save as much renminbi as they can.”
High inventories among factories and distributors hit by the zero-Covid policy also boost the soon-to-expire food industry.