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Alternative venues for top fruit exports: Pears to Asia

The top fruit sector in Western Europe has spent years gaining access to new markets. Now that Russia is closed to European produce, new markets more welcome than ever before. What alternatives are there?

Pears
Let us look at one product. One of the items ideal for export to far-off destinations is the Conference pear, mainly because of its long shelf life. Both the Netherlands and Belgium are targeting Asia and the Middle East. Asia in particular is interesting because of the emerging markets and its budding middle class. The biggest option for pear exports to Asia is China. For a few years now, Belgium has been exporting Conference pears to this country, and Dutch entrance in this endeavor shouldn’t be far off. China, incidentally, is the largest exporter of pears in the world, providing the fruit to a lot of Asian neighbors. It’s expected that the demand for higher priced Western pears will increase, mainly from richer Asian countries like Taiwan, Hong Kong and Singapore.



China has a huge influence in the region, and has always maintained a lot of barriers to protect its domestic product. Through Hong Kong, more and more western pears find in their way into China illegally. Hong Kong is also an interesting market, sporting the best-located deep sea port and one of the largest container ports in the area. Interestingly, the Chinese government has now eased import restrictions for a number of countries. Furthermore, China has a growing consumer market due to its emerging middle class. It is expected that in 2015, it will surpass Japan as the largest consumer market after the United States. Meanwhile, China is in the top 10 most important export countries of the Netherlands.

Emerging Asian countries
The most viable short-term opportunities, however, appear to lie in markets such as Taiwan, Hong Kong, Singapore, Malaysia, Indonesia and India. Here the number of middle class consumers is increasing sharply. These show interest in Western products and are willing to pay handsomely. Taiwan has a large consumer market, and the country is open to foreign products. Japanese products are very popular because of presentation and quality. Singapore is especially important as a transshipment port for goods in and out of various Asian countries, and has a reputation for being the easiest place in the world to do business in. Malaysia is among the countries with a rapidly growing economy. Advantage is also the location of the latter: right along the Strait of Malacca, one of the most important shipping lanes in the world.

In addition to the aforementioned markets, Asia also has other countries with rapidly growing destinations for Dutch and Belgian pears. India, with 1.2 billion people, signifies a huge market, as well as being home to a strong middle class. India has fairly complicated customs regulations hindering export, but financially there are ample opportunities. Administratively speaking, India is reasonably stable, the political arena not prone to sudden changes. Bangladesh also belongs to the possibilities. It is one of the poorest countries in the world, but it’s making progress. Bangladesh has a large and young population, which makes for rapid economic growth. The country focuses increasingly on international trade.

Thailand has a large consumer market with potential: it has political unrest, but the country does belong to the biggest climbers in terms of trade and consumerism. In Bangkok, where 15% of the population lives, the demand for consumer goods rises sharply. The land is part of the ASEAN Free Trade Arena and free trade can be conducted with India, China and South Korea. A branch office in Thailand might just offer strategic advantages. Indonesia is no longer seen as a developing country. The country has the largest consumer market in Southeast Asia. Vietnam is a true emerging market, and currently boasts one of the fastest growing economies of Asia. Ho Chi Minh City is the commercial center of the country, housing many consumers with high disposable income. Supermarkets are slowly replacing street vendors.

The Japanese economy, already the third largest in the world, seems to be recovering. It is expected that consumer spending will improve in 2015. The largest markets of Japan are located in major cities like Tokyo, Osaka, and Kyoto. Luxury stores are open 24 hours a day. Korea is the second-largest export market in Asia for Dutch produce. A Free Trade Agreement makes export to the Korean market more appealing. The consumer market is concentrated in the major cities. As in Vietnam, supermarkets and department stores are gradually substituting street vending and small shops. Tesco has managed to enter the South Korean market, though most companies are owned by domestic conglomerates.

At the consumer level
"I definitely see potential in Asian countries, but gaining a foothold will not be easy," says a Dutch trader in top fruit, back from a recent visit to Asia. "Look at China: the gates are open, but they’re only slightly ajar. I don’t see any short-term Conference shipments going that way, but hopefully I have it wrong. From what I’ve seen, the Dutch pear, both qualitatively and in terms of taste, is much better than the Asian pears. But habit also comes into play. For example, Asian consumers prefer an evenly-colored apple to an apple ‘with a blush’, as we say in Holland. And take the Nashi pear. That has nothing on our Conference, but it continues to be a popular item over there. If we want to conquer the Asian market, we will have to break in at the consumer level, target the consumers themselves. Take Zespri for instance: sales in Asia rose sharply within a short period of time, because the Kiwis were frequently and primarily offered to consumers."

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