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International cooperation to improve Chinese fruit growing

Twenty years ago, the Chinese fruit market looked completely different. Supply was fragmented and the sector consisted of small companies. Joy Wing Mau celebrates its twentieth anniversary this year. Besides the Chinese market having changed, changes also occurred internally. For example, focus is now more on the Chinese market.

“The market was fragmented and there were no large companies. The sector wasn’t as respectable as it is nowadays,” Echo Yuan reminisces about the past 20 years. “There were fewer means for investments and less talent as well. That is different now, and private equity companies now want to invest in the sector. Everyone sees the importance of healthy food.”

“Everything is done by phone”
Joy Wing Mau has been building strong relationships with retailers since the company was founded. “We were the first supplier for supermarkets, so we have built ourselves a good relationship,” Echo says. “We are now expanding from retail to wholesalers.” The company now has wholesale booths in 11 first-tier cities in China. Besides, the company is active in e-commerce and has several of its own shops. “There’s considerable competition on the market,” Echo continues. “We don’t want to compete solely on price. We dedicate ourselves to provide valuable service to our clients and customers. Among which over 1500 promotion staff is one of the key factor.”

The e-commerce market is quickly growing in China, but market share remains limited despite that. “In China, we do everything by phone, even paying,” Echo explains the growth of online sales. The online sales are mostly focused in large cities, in which many consumers can be found on a relatively small surface. “In large cities it’s easier to deliver orders.” She sees an obvious difference with, for instance, in other countries in Asia and Europe, the use of phones for shopping and paying is less developed.

Market Development in smaller cities
“We focus on the Chinese market,” Echo explains. The most important markets are in large cities like Beijing and Shanghai, but Joy Wing Mau also focuses more on second and third-tier cities. “The inhabitants of these cities have money, but supply of quality fruit is still limited. We’re working on that.”

Logistics play an important part in this. Joy Wing Mau supplies the enormous Chinese market from six modern storage and logistical centres. Within these DCs, much has been invested in automation and software to better monitor stocks, for example. “That way, we can better meet consumers’ demands.”

Labels and international cooperation
Due to various scandals in recent years, involving baby formula, for example, Chinese consumers have partially lost faith in domestic products. That is expressed in a large demand for imported products, including for fruit and vegetables. “Consumers prefer more well-known brands,” Echo admits, yet Joy Wing Mau invests in domestic production to build a strong Chinese fruit brand.

To that end, cooperation with international parties is looked for. “That way we can introduce new production techniques and varieties in China,” Echo says. For instance, they work closely together with Hortifrut to establish a soft fruit production in China. Focus is on blueberries. Many multinationals want to set up production projects in the country, and that has a positive effect, according to Echo. Consumers get more premium products, and it’s beneficial to the protection of intellectual rights of ownership. Combined with a Chinese label for domestic production, the company is working on rebuilding consumer trust for domestic fruit. “Once consumers trust a label, it’s beneficial to the entire sector.”

For coming years, management of Joy Wing Mau has set itself the goal of multiplying turnover by five. An ambitious goal that amounts to a turnover of more than 50 billion Yuan in 2025. The company wants to achieve this goal by profiling itself more as a service provider, and takeovers within the Chinese sector aren’t excluded. In the wholesaler’s sector in particular, in which Joy Wing Mau is a relative newcomer, there’s still much room for growth. Besides, another trend can be noticed that offers opportunities: online shops such as JD.com and Alibaba are opening physical shops. “With that, we want to offer more tailor-made customer service to meet diversified demands.”

Looking for partners on the industry chain
Joy Wing Mau always holds the philosophy of Create value and Share value, says Echo Yuan. “We will remain open and cooperative to look for and work with the best partners around the globe. By working together, we hope to build a value chain eco-system with the best variety, best farms, best brands, highest efficiency, best status and best customer experience.”

For more information:
Joy Wing Mau
www. joywingmau.com

Publication date: 3/12/2018
Author: Rudolf Mulderij
Copyright: www.freshplaza.com


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