China continues to be a star performer in the growth stakes for Zespri, with this market on course to capture 7 per cent of its global sales this year, compared with 0.5 per cent only a few years ago. Sales volumes in the season to date are up by 60 per cent on the same point last year, with the New Zealand kiwifruit marketer planning for a much earlier finish to the season.
According to Kelvin Bezuidenhout, Zespri’s regional marketing manager for Asia, a couple of key factors are behind the increase this year.
“Part of the reason is that we’ve focused on developing the China market and getting volumes into the market during the peak sales period in May when there’s not much competitor fruit available,” he told Fruitnet.com. “But the other thing is that we have been more targeted with our campaign and increased our distribution significantly beyond ‘tier one’ cities into ‘tier two’ cities.”
Zespri’s sales in China have previously focused almost exclusively on the major East Coast cities of Shanghai, Beijing and Guangzhou, but this year the company has made a concerted effort to broaden its reach. “We have recruited a whole new level of distributors in second-tier cities like Chongqing, Chengdu and Qingdao and we’ve also been moving into satellite cities around Shanghai like Wuxi and Ningbo,” Mr Bezuidenhout explained. “It’s a big focus to get our distribution going in those cities over the next few years.”
Although the tier one East Coast cities still represent the bulk of Zespri's sales in China, and they are continuing to clock up healthy growth, he believes the tier two cities are key to ramping up sales. “The tier two cities will make up 30 per cent of sales this year and we’re going to have a review at the end of this year to try and push them up to that next level on volume and keep the incentives going for our distributors,” says Mr Bezuidenhout.
China is central to Zespri’s growth plans, and the company has forecast the country could account for 20 per cent of sales within just 10 years, making it the largest single market globally.
That position is currently held by Japan, which remains the “jewel in the crown” for Zespri, according to Mr Bezuidenhout. Japan accounts for some 17 per cent of the global sales volumes, and a great deal more in terms of values, where it returns sizeable premiums compared with other markets.
China is on course to overtake Korea as Zespri’s second-largest Asian market this year, however, both in terms of returns and volumes, and its growth could help to preserve Japan’s status as a premium market in the future.
“There’s been so much pressure on Japan as well as other markets like Europe and North America. China has the potential to soak up volumes at good returns and ease some of that pressure,” he says. “It’ll take a lot of time to unseat Japan, however, especially as much of the production of our newer varieties will initially focus on Japan with a view to driving sales there.”
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