China Indoor Farming Market - Forecasts from 2023 to 2028

The China indoor farming market is projected to grow at a CAGR of 10.99% over the forecast period, increasing from US$3.643 billion in 2021 to US$7.559 billion by 2028.

China, hosting the world's largest urban population, anticipates a sustained urbanization trend. Escalating demand for locally cultivated produce is hampered by land scarcity and environmental issues in traditional agriculture. To address this, the Chinese government actively champions indoor farming. This involves fostering large-scale indoor farms, advancing technologies, and training skilled personnel. The resultant growth in China's indoor farming sector promises several benefits: heightened food security by minimizing reliance on imports, diminished environmental impact through reduced chemical usage, elevated food quality due to controlled cultivation, and substantial job creation within the burgeoning industry. 

Following this, in 2021 CRA-Carlo Ratti Associati unveiled the design for the Jian Mu Tower in Shenzhen, China. This office skyscraper, designed for a competition by Wumart, boasts a groundbreaking feature: a vertical hydroponic farm spanning its entire height. Rising 218 meters in Shenzhen's Central Business District, the tower allocates 10,000 square meters of its facade to crop cultivation. This innovative farm is projected to yield 270,000 kilograms of food annually, sustaining around 40,000 people. Jian Mu Tower integrates a self-sufficient food supply chain within the building, alongside offices, a supermarket, and a food court.

Increased demand due to the increasing population in China

In 2022, China made significant strides toward producing over 686 million tons of grains, bolstering food security. Nevertheless, challenges persist in preventing a mass return to poverty in rural areas. Smallholder farmers, constituting 80% of China's food producers, face vulnerability due to limited income, technology access, and market connectivity, particularly affecting 60% who are women. Environmental constraints from climate change impact agriculture, and a substantial income gap between rural and urban households persists. Chinese government policy documents emphasize ongoing efforts for comprehensive rural revitalization, as outlined in the Fourteenth Five-Year Plan and the "No. 1 central document" of 2022. As of 2019, China's arable land, totaling 1.28 million square kilometers, experienced a nearly 6% decrease compared to the preceding decade, according to a once-in-a-decade land use survey published in August. This comprises only 13% of China's total area and is anticipated to decline further by 2030 due to ongoing conversion to urban and industrial zones. Amidst these challenges, vertical farming emerges as a solution to optimize resources and space, maximizing yield in limited areas. With China's rapid urbanization, agricultural experts and leaders in "new farming" companies are considering ways to adapt this technology locally, ensuring urban residents access to stable food supplies. This economically and environmentally friendly method, repurposes abandoned garages and factories, saving water. In April 2023, Chinese scientists achieved a groundbreaking milestone in vertical farming, cultivating an unprecedented 2,500 cabbages and lettuce in a single A-shaped tower measuring 9 by 5.5 meters in Singapore. This remarkable yield surpassed traditional farms by tenfold, utilizing only 5% of the ground space. 

The fruit and vegetables segment in China is anticipated to grow steadily. 

The demand for fruits and vegetables is increasing in the country, with the population coupled with rising per capita income for the people pushing the market for indoor farming in the projected period. For instance, according to the World Bank, the population in 2018 in China was 1.40 billion which increased to 1.41 billion in 2021. The increasing imports of fruits and vegetables be attributed as one of the major factors for the rising demand for indoor farming. For instance, according to the State Council, of the People’s Republic of China, China imported 3,37,000 tonnes of vegetables in 2022, the total value of these imports was US$960 million. Hence, in the coming year with the increase in imports of fruits and vegetables, the demand for indoor farming is expected to grow in the coming years.

According to the U.S. Census Bureau Trade Data, the United States exported agricultural products worth US$13,583 million in 2019, which increased to almost double in 2020, and reached US$26,399 million in 2020, and in 2021 the exports by value increased by 25% and reached US$32,977 million. Hence, to reduce the dependence of agricultural exports on China, the country is expected to employ multiple methods including indoor farming are expected to propel in the coming years.

Market Key Developments

• In July 2022, Mary Agrotech signed a deal with one of the largest food companies in China, Bright Seedbase Technology Co., Ltd. Bright Seedbase is the research and development arm for vertical farming and cultivar arm of China’s Food Co, Ltd.

Segmentation:

By Growing System

• Hydroponics
• Aeroponics
• Aquaponics
• Soil-based
• Hybrid

By Component

• Hardware
• Software
• Services

By Facility Type

• Glass or Poly Greenhouse
• Indoor Indoor Farm
• Container Farm
• Indoor DWC System

By Crop Type

• Fruits and Vegetables
• Herbs and Microgreens
• Flowers and Ornamentals
• Others