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Charley Xu – Win-Chain and Peter Zhu - Pagoda

Chinese companies tell PMA conference: “We’re open for business”

At the recent PMA Fresh Connections conference, two representatives from Chinese companies briefed delegates on what they were looking for from South African suppliers.

Charley Xu, sourcing director at the Import Fruit Business Unit of Win-Chain (right) explained that they are a data-driven platform, using data to analyse customers’ preferences, information that they share with their suppliers through ongoing communication.

Chinese giant Alibaba has invested US$800 million in Win-Chain over two years with a particular focus on the supply chain, resulting in an entity called ExFresh for end-to-end logistical solutions because, as Charley noted, cold chain management has become a much discussed topic in China in recent years.

They have six main channels of distribution: the Alibaba ecosystem which incorporates an agreement with RT Mart, the biggest retailer in China; retailers outside of Alibaba; online; community group purchases through social media; the catering or food service sector and lastly still the wholesale market system when they have oversupply or product that doesn’t meet the quality standards for the above channels.

He emphasised that fruit is allocated to different channels based on quality and other specifications, for instance smaller fruit, to be sold separately, suit the online channels, while consumers in northern China prefer larger fruit than consumers in eastern and southern China.

Important to diversify channels
“China is a very big producer of apples, like Fuji and Gala. Apples are a very special fruit because it can keep a long time. South African apples are small sized but the taste is very good,” he said. “It is very important for growers and exporters to diversify channels, to send different product to different channels.”

The company sources cherries, citrus, apples, avocado, blueberries, durian and from this year also mangosteen, coconut and, of interest to South African growers, table grapes. He noted that the company was looking to forge partnerships with South African grape growers.

Finally, he used the 2018 cherry campaign (“a very very hot product in China”) to illustrate the success of Win-Chain’s marketing division, in partnership with Chilean export association ASOEX which resulted in more than a billion page views on social media and a significant uptick in sales and brand awareness.

Avocados key product for Pagoda
Peter Zhu, vice-president at the Shenzhen Pagoda Industrial Development Corporation (right), explained that they were the largest group in China to operate in the system of small neighbourhood stores of which they have almost 4,000 in 73 cities, supported by 23 distribution centres, resulting in a sales volumes of about US$1.5 billion last year.

Their main product from South Africa is apples (and like Charley Xu, he referred to the exceptional taste of South African apples), importing close to 140 containers last year to a value of approximately US$3 million and so far this year more than a hundred containers. They imported 24 containers of citrus and 11 containers of table grapes last year.

Pagoda is continually opening new stores and Peter told delegates that what they were looking for in particular, were South African avocados (which don’t yet have access to China). Avocados are a key product for them and they have been investing heavily in ripening facilities; last year ripe-and-ready (“instant”) avocados accounted for 89% of the 5.8 million avocados sold at Pagoda stores, in only their second year of offering ripe-and-ready avocados.

“We’re looking for quality and we expect suppliers to have a good understanding of their product and the Chinese market. We’re also looking for innovation from our suppliers,” he said.

Charley Xu
Tel: +86 189 6403 5479

Peter Zhu
Asia Fruit Logistica Hall 3 T02,
4-6 September 2019

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