Mainland China has seen price hikes across various items including water, electricity, gas, high-speed rail tickets, instant noodles, pickled vegetables, and Coca-Cola. Noodles, pickled vegetables, and drinks have been jokingly referred to by Chinese people as the “poor man’s three-piece set”. Analysts believe that behind these price hikes lies a wave of increases targeting ordinary people, encroaching on the daily lives of everyone.
Recently, Master Kong instant noodles suddenly announced a price hike across their product line, causing a stir online.
According to reports from “China Business Network,” Master Kong issued a price adjustment notice to distributors, raising the suggested retail price for bagged noodles from 2.8 yuan to 3 yuan, an increase of 0.2 yuan per bag, and for bucket noodles from 4.5 yuan to 5 yuan, an increase of 0.5 yuan per bucket. Instant noodles have entered the era of 5 yuan.
Distributors from various regions have confirmed receiving the price hike notice, with prices matching the leaked information.
Some distributors mentioned that classic products like Old Tan’s pickled vegetables and braised beef had already started increasing their retail prices half a month earlier.
Pickled vegetables, often paired with instant noodles, have also seen significant price hikes recently.
Since 2008, Fu Ling pickled vegetables have raised their prices for their product Wujiang pickled vegetables as many as 13 times, surpassing even the price hikes of Maotai liquor.
The quantity in each pack of pickled vegetables has decreased while the price has increased significantly. The standard 80g Wujiang pickled vegetables have been reduced to 70g, with the retail price rising from the initial 0.5 yuan to around 3 yuan, making the price per kilogram over 20 yuan, more expensive than pork.
Data reveals that in the past 14 years, Wujiang pickled vegetables have experienced a total price increase of over 600%, becoming the only product to match the price increases of real estate in Beijing, Shanghai, and Guangzhou in the past 20 years.
Recent reports from “First Financial” confirmed that the prices of soda products from Coca-Cola and Pepsi-Cola had quietly risen.
Over the past year, several beverage companies have raised their prices.
In cities like Shanghai and Guangzhou, the prices of Pepsi-Cola and Coca-Cola have increased in convenience stores. The price of a 500ml cola has risen from 4 yuan to 4.5 yuan, while a 680ml Coca-Cola now sells for 5 yuan.
With instant noodles, pickled vegetables, and soft drinks seeing price hikes, people are now spending more money to enjoy a meal of cup noodles and pickled vegetables on high-speed trains.
An article from “Intelligence Trends,” a media platform focusing on economic, policy, and social trends in China, suggests that behind the price hikes of instant noodles, pickled vegetables, and soft drinks is a price increase trend targeting the lower-tier market segment, rapidly spreading.
A significant factor contributing to this trend is the price hikes in public services.
Major cities have raised water prices, with Shanghai increasing the highest tier price by 50% and Guangzhou by nearly 34%.
Several provinces including Guangdong, Hunan, Anhui, and Jiangsu have announced electricity price adjustment plans, with maximum price increases reaching 30%.
After changing their gas meters in Chongqing, many residents complained about a doubling of gas bills compared to before.
In the fourth quarter of 2023, after gas meters were replaced in Chongqing, the net profit of gas companies for that quarter was approximately 219 million, representing an 824% increase compared to the same period in 2022.
125 cities and counties such as Shenzhen, Fuzhou, and Zhenjiang have also released plans to increase natural gas pipeline prices.
Following these, high-speed rail ticket prices have also seen an increase, with first and second-class seat prices rising by around 20%.
The article from Intelligence Trends mentions that this wave of price hikes is an inevitable trend.
While the Chinese Communist Party set a 5% GDP growth target at the beginning of the year, they also confirmed that this year’s CPI increase will be around 3%…
According to data from China’s National Bureau of Statistics, the CPI increase in April was 0.3%, highlighting the challenges of achieving the 3% target.
The article suggests that water, electricity, gas, high-speed rail, and even instant noodles, pickled vegetables, and soft drinks now bear a crucial “historical mission”.
Instant noodles, pickled vegetables, and soft drinks, which have seen the most significant price hikes, may be leading this wave of increases precisely because they are essential products.
The consumer base for instant noodles mainly consists of labor workers whose demands include being quick, affordable, and filling. Products that can meet these requirements simultaneously, and at a lower price than instant noodles, are scarce.
Therefore, even if instant noodles increase to 5 yuan per bucket, it remains the most cost-effective option that meets the needs of this group of consumers.
Furthermore, instant noodles, pickled vegetables, and soft drinks possess certain monopolistic characteristics. For example, the instant noodle industry has a high level of concentration, with Master Kong and Uni-President holding a combined 65% market share.
Major players in the market have exceptionally strong control, with the industry experiencing little change over the past thirty years, leading to a situation where the strong players remain dominant while new competitors struggle.
In such a landscape, when the market leader raises prices, other brands will follow suit, and consumers have no choice but to accept the increased prices of instant noodles.
Fu Ling pickled vegetables and Coca-Cola also hold similar monopolistic positions.
The article from Intelligence Trends concludes that when housing prices plummet, car ownership becomes a burden, and business performance declines significantly, no one’s days are going to be easy. This wave of price hikes, targeting ordinary people, has only just begun.