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Exporting fresh fruit and vegetable to China

Wednesday, 14 September 2016 | Posted in China by Renee Harrison

Numerous market strategies exist for foreign fruit and vegetable exporters looking to gain access to Chinese markets. The most suitable method of entry depends on numerous factors, such as the permissibility of the exporter’s fruit and vegetables to be imported into China, which distribution channels the exporter plans to operate, and the exporter’s choice of Chinese importing partner.

This report is a must-read for anyone looking to export fruits and vegetables into China.

The imported fresh fruit and vegetable market in China looks to maintain and even exceed its impressive growth rates of the past decade. China remains a large market with huge untapped potential for those with a road map on how to export to China.

Click Here for your road map.

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Cross-Border B2C E-Commerce: A Growing Channel in China

Thursday, 14 July 2016 | Posted in China by Renee Harrison

China is the world’s largest e-commerce market and is rapidly growing. Fresh produce e-commerce sales are predicted to rise to $15 billion in 2017. For exporters, the cross-border B2C e-commerce channel allows for ease of entry via China’s Free Trade Zones with faster approval processes and a reduction in tax rates and tariffs. Chinese consumers also benefit from this channel with higher quality, fresher fresh produce.

This article details the growth opportunity, competition, and consumer demand for the fresh produce e-commerce and specifically, cross-border B2C channel in China.
China’s Growing E-Commerce Market

China is the world’s largest e-commerce market and is rapidly growing, with online sales surpassing $670 billion in 2015. China’s online shopping population rose to 390 million in 2015 and is estimated to reach 500 million by 2018.

Cross-border B2C e-commerce refers to a form of B2C (Business-to-consumer) online purchasing whereby consumers can purchase foreign goods online via e-commerce platforms and marketplaces, such as kjt.com, Tmall Global, and others, who are set up to operate within special Free Trade Zones (FTZs) in China.

Quarantine and inspection processes are accelerated for B2C cross-border e-commerce, preserving product quality and freshness. Vendors are preapproved by Chinese import authorities (GACC). The Chinese government has recognized the immense potential for e-commerce, especially among agricultural and fresh fruit imports, and has offered support and stimulus in the form of reduction in tax rates, tariff reductions, and support for logistical development. These tax breaks and tariff and customs duties waivers benefit Chinese consumers.

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Chinese consumers view U.S. produce as safe

Tuesday, 5 April 2016 | Posted in China by Michael Worthington

In North America, when we talk about food safety, we think about pathogens like E. coli, salmonella and listeria. In China, when the produce industry and consumers think food safety, they think about chemicals applied to products or contaminants in the soil. Couple this with mistrust in the Chinese government and you get a country increasingly importing fresh produce to feed populations with growing wealth — and it’s a country ripe with opportunity for U.S. growers and packers.

Earlier this month, the Produce Marketing Association held one of 2016’s eight Fresh Connections events, this one in Shanghai, China. Joining me on a panel about food safety was Richard Bennett from PMA Australia/New Zealand and Keith Refsnider from Driscoll’s.

While I was happy to share Markon’s perspective, I found myself enthralled in the Chinese cultural underpinnings that make the country a unique target market for U.S.-grown produce. Because of the mistrust in government and China’s lack of oversight leading to contaminated soil, air and water, Chinese consumers don’t trust local produce.

In fact, lack of trust in local produce by high-end consumers is the No. 1 concern among Sam’s Club consumers in China, according to Neil Maffey, Sam’s Club China’s chief merchandising officer, who spoke at the event. Instead, they associate imported fruit and vegetables with safety and quality, as they do with imported dairy products.

Chinese fruit imports grew from U.S. $3.4 billion in 2013 to $5 billion in 2015. The largest imported fruit is bananas, followed by cherries, grapes, and durian. Among the fast-growing fruit are berries, avocados and apples. There is also a willingness to pay a premium for imported food and other products.

The Chinese use the term “haitao,” which means “overseas.” The most frequently purchased items are food, baby care products and cosmetics. Many of these purchases happen online where consumers feel they have a more direct path to purchase from the product source. Technology also plays a critical role. Chinese use of technology is well ahead of the U.S.

In 2014, Chinese mobile phone users downloaded 59% of all apps worldwide; the U.S. downloaded 8%. WeChat, Taobao and Weibo, along with Alibaba, are ingrained in Chinese culture. Some vending machines don’t even accept cash or credit cards — they require purchase through one of the common apps. But technology aside, a look at the retail environment also tells a story about how Chinese consumers view imported produce.
Market tours. On one of our market tours of China, the day kicked off with a visit to the Huizhan Wholesale Market. 

The Huizhan Wholesale Market is the largest import market in Shanghai, and one of the biggest in China. Large import companies provide fresh produce to fruit dealers who forward it to local markets and e-commerce companies. After the wholesale market, the tour continued with a visit to an Olé Supermarket Food Hall. Olé’s Food Halls are luxury supermarkets that target a high-end customer segment.

Fresh produce and imported fruit and vegetables provide an important part of the retailer’s product offering and are shown centrally in beautiful product displays. I have no U.S. comparison to this market — perhaps the best elements of a Wegmans and Whole Foods combined. We then visited Sam’s Club, a division of Wal-Mart Stores, where premium quality fresh produce is also an important product segment. The company continually reinvents its packaging and marketing to appeal to a Chinese audience, and its China stores are among the highest sales volume worldwide. Cherries are highly prized by Chinese — the 12 Chinese stores sell 90% of the volume of all 550 U.S. stores.

We also stopped at Pagoda, one of China’s innovative new fruit chain stores, offering imported, high quality produce. Produce is all shrink-wrapped or uniquely packaged to showcase quality and safety. Pagoda has built a vast network of more than 1,300 shops across China during the past three years, on the path to 10,000 stores in the next five. The chain focuses purely on sales of high-end fruits. Its shops are located in population-dense neighborhoods.

We ended the day at a traditional “wet market.” A contrast to our earlier stops, wet markets generally appeal to those who are less affluent than shoppers at other retail formats we visited. Chinese consumers purchase about 85% of their fruits and vegetables at wet markets, although other retail models are picking up steam. Wet markets contain beautiful displays of unrefrigerated produce (along with live seafood and raw meat) from which to select product. Many Chinese who shop at these markets shop for produce every day, with most produce being cooked.

During the days’ presentations, Bryan Silbermann and Cathy Burns of PMA showcased an important trend that has gained traction not only in the U.S., but also in China: a desire for transparency. Chinese consumers, like their American counterparts, want to know when, how and where a product was grown and harvested and what’s in it or on it. We’ve heard a lot of late about a slow down in China. But that wasn’t the China we saw. By the end of the trip, the group could not ignore the potential in the market. I looked around and wondered why there were not more U.S. producers present.

The message is clear: There’s a growing middle class with huge population numbers and money in their pockets. There’s demand for imported produce because trust in local produce does not exist. Finally, if there’s a wheelhouse in the produce business — and there is — it’s the quality of our produce combined with a food safety system and a commitment to transparency that’s second to none.

One week in China does not an expert make, but it certainly gets the entrepreneur in all of us digging a little deeper into the potential that is China. 

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Tim York is CEO of Salinas, Calif.-based Markon Cooperative. Centerplate is a monthly column on “what’s now and next” for foodservice and the implications for produce.
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Chinese food: opportunities, realities and lessons in the Australia-China food relationship

Wednesday, 2 March 2016 | Posted in China by Renee Harrison

Perth Members Event: Presentation

Nicholas Creed and Tom Fotheringham from international law firm King & Wood Mallesons, gave an insightful presentation on the China-Australia agri-food trade and investment relationship at the PMA A-NZ Perth Members Event.  "It was great to have Nicholas and Tom present at our Members Event in Perth to impart great insights on China.  It was extremly valuable for our members" said Michael Worthing, CEO, PMA A-NZ.

The presentation is available for you to download and covered issues such as:

  • export / import controls and regulation (including ChAFTA)
  • trade finance options and PPSA tips
  • in-bound Australia investment from China.
Download the presenation

Click here to download:  Chinese food: opportunities, realities and lessons in the Australia-China food relationship

King & Wood Mallesons 

King & Wood Mallesons is the global law firm for Asia, having been establishedin2012through the merger of King & Wood, the pre-eminent Chinese law firm with 12 offices throughout China and Hong Kong, and Mallesons Stephen Jaques, the leading Australian corporate law firm with offices in Australia’s capital cities (including its oldest office (1831) in Perth). Both Heath and Nick work very closely with KWM partners in PRC to provide insightful advice to clients from both countries.

Speaker Information 

Nicholas Creed is a banking & finance partner with extensive experience in acting for Chinese banks in their investments in Australia and for Australian companies seeking finance from China. His recent experience includes the more than US$2 billion financing of the Chinese syndicated and bilateral loans for the Karara iron ore project in Western Australia and acting for an Australian bank on an Australian agricultural investment by a Chinese state owned enterprise.

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Access more information on upcoming events click here

Mintel China Consumer Trends 2015 Report

Monday, 5 January 2015 | Posted in China by Erin Hart

This Mintel China Consumer Trends 2015 report outlines the emerging trends set to impact China in 2015, why consumers will buy into them, and what it means for your business.

The four key trends include:

  1. Real World Retail: Businesses will adopt a flurry of fast and flexible solutions to bridge the gap between online and physical shopping, to cater to the on-demand, instant gratification culture of the digital world.
  2. Get Smart: Trusted companies will increasingly join the convenience-driven, data-collection revolution, causing synced devices to become mainstream.
  3. Pollution Protection:  Technological innovation and clean, protective product launches in the FMCG space will be driven by the threat of pollution to human, rather than environmental health.
  4. Tapping In and Speaking Out: Crowd-sourced intelligence has the potential to generate new products and initiatives, providing marketers with a deeper understanding of opportunities in the marketplace, and driving innovation.

 

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The white-paper is free to download via the Mintel website

 

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  • Access additional consumer and industry trend resources via the PMA A-NZ Information Centre
  • Check out PMA's full range of global consumer trend resources, here.
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