China’s consumption downgrade tastes good for fermented tofu makers
- Under pressure, consumers in China are cutting back on spending on high-end items, while sales of instant noodles are rebounding after two years of decline
- Weakening consumer spending comes as economic growth decelerated to its lowest level in nearly three decades at the end of the third quarter
Three years ago, when Luo Zhaoliu walked away from the engineering job he had held for nine years in the prosperous metropolis of Shenzhen to return home to one of the poorest corners of China to start a fermented tofu workshop, his friends quite rightly questioned his decision.
Sentiment was running high in mainland cities just like Shenzhen, known as China’s Silicon Valley, with many middle-class households pouring money into property and start-up firms. Consumption confidence was relatively strong, with a seemingly insatiable demand for items that indicated an upgrading of expenditure, from imported avocados to yoga pants.
The fermented tofu with a local tea oil fragrance Luo planned to produce, on the contrary, was a traditional delicacy for the poor to add flavour to plain rice or instant noodles when they did not want to spend money on additional dishes. With a retail price of about 15 yuan (US$2.10) per jar, it is among the cheapest choices for adding oil and salt to a meal.
Luo, however, went ahead with his plan to revive a family recipe, and he now employs 20 pink-clad local female workers to produce and package the tofu, which is sold online.