Doing direct business in China: first-hand insights
China may appear as the promised land for fresh produce suppliers – and with rapidly growing buying power, 19.5 per cent of the global population and a quickly developing modern retail sector, it certainly has many promising aspects. But China is not an easy market to enter successfully, as four expert speakers explained in Asiafruit Congress’s third session.
Kicking off the session were Jim Provost and John Wang of Chinese fresh produce trade Lantao, who pointed out that suppliers must adapt to Chinese market dynamics, which often varied from city to city.
Lantao has targeted growth in second-tier cities, the two explained, which still rely heavily on traditional distribution systems, rather than modern cold chains, but are nonetheless growing at double the pace of China’s first-tier cities.
“To reach all of the consumers in China you have to be in a lot of different markets besides the main cities,” stated Mr Provost. Most sales in second-tier cities were through fruit carts, added Mr Wang.
That method of distribution puts certain requirements on the product, furthered Antony Butler of Newfresh, a China-based importer of South African produce. “Second-tier cities pay more for fruit than first-tier cities,” he said. “Because they need long-lasting fruit. If you’re selling it from a fruit cart, you need it to last, and the customers barter on every piece.”
Brand reputation was also of the utmost importance, he explained. “We don’t want to present a product in China that will tarnish our brand. The difference between having an average brand and having a good brand in China is huge.”
He estimated that around 30 per cent of the fruit imported to China does not make any money, because the costs of entry are so high and competition among second-grade produce is fierce.
Looking further at the premium branding strategy was Rita Chen, Zespri’s marketing manager in China. Ms Chen explained the kiwifruit marketer’s ‘Small fruit with big goodness’ campaign in China, which heavily features in-store, media and billboard promotion.
“Our target audience is women with children, and young women, single or married, who care about their health,” she explained. “The objective is to build a kiwifruit category in the market.”
A full report on the Asiafruit Congress and ASIA FRUIT LOGISTICA will appear in the October issue of Asiafruit Magazine.
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