It has been a while since China became the focus of Chilean exporters. And while the Asian giant is looking hungrily for Western fruits, the Chinese consumer is rapidly changing in the context of a country that is increasingly urbanised and continues to grow at rates close to 6%. This is also resulting in the development of new eating habits, including those determining what kinds of fruit are consumed and how.
"Chinese consumers used to perceive imported fruit as an expensive gift, but now they see it as fruit for their own consumption," affirms Kurt Huang, general manager of Shanghai Oheng Import & Export, and one of the two importers of the Asian giant that will be exhibiting at the next PMA FruitTrade, an event held this week in Santiago.
For this reason, "understanding this new consumer has become essential for Chilean exporters, as that is what will allow them, not only to retain the market they have already conquered, but also to grow in terms of volume and introduce new products. This is precisely what motivated the invitation to importers and marketers to attend the PMA event and outline what China needs and how to work in this country," stated Luis Schmidt, president of Fedefruta and Chile's former ambassador to China.
What are the Chinese looking for?
The reality is that China is not just a very large country, but also one with a great diversity of development, where more and more inland cities with over 5 million inhabitants are becoming stronger. Each region and each city has different demands, Huang says.
"China is a large country with uneven development, so demand is different depending on the area. Thus, in the tertiary markets, they are looking for tropical fruits that are different, good-tasting, and most importantly, not too expensive. In the secondary markets, demand is growing especially for Western fruits, while in the main market, the most developed and with the most sophisticated consumers, there is a more diversified demand and outstanding fruits yield the best results," explained Huang.
For the specialist, the way to attract those consumers is by "being very good or very cheap." According to Eric Li, vice president of sourcing and alliances at Shanghai Yiguo E-Commerce, who will discuss the development of e-commerce as a sales tool in China at the PMA event. The recipe is to find the right consumer, "to learn about their needs, to provide them with knowledge about the product, with information related to health, lifestyle and other such aspects."
Safety and quality
For the Chinese, there are two key issues, according to the importers. On the one hand, although the country is growing and its infrastructure is improving, there are still fears among its inhabitants when it comes to food safety. According to experts, Chinese consumers put special emphasis on these issues, and tend to see imported food as safer and of better quality.
"Good taste is always the most important aspect, then come the nutritional ones. Chinese consumers still show more trust in imported fruits in terms of food safety," explains Huang.
Eric Li, whose company is one of the largest online marketers in the Asian giant and who was responsible for selling about half of Chilean cherries in China in 2015, acknowledges that Chinese consumers are increasingly seeking "high quality fresh food, which in many cases is imported."
And while a beautiful appearance can motivate a first purchase, only a good taste will make the consumer loyal, according to Huang. "The Chinese, and Asians in general, like sweet fruits; this explains why New Zealand's expensive golden kiwi sells well in the Asian market," he states.
Li has a similar opinion and argues that, "comparatively, Chinese consumers want fruit to be sweet, red, crunchy and juicy and, in some cases, as in cherries, of a large size. Now, depending on the occasion, they can also take other factors into account. When they are buying the fruit as a gift, for example, the colour, size and attractive packaging become more important. When it is for a baby, the consumer will pay more attention to nutritional aspects," explains Li.
One key aspect, whether for an online shopper or for one actually going to the store, is the packaging and labelling. "Both reflect the product's quality and convenience (ways to consume it, for example) and should include information regarding safety."
For his part, Huang believes that it is very important for the packaging not only to identify the product's origin, but also to be strong enough to "survive the rough handling in wholesale markets and a cold chain that is still under development."
Conquering the inland market
While Chile has so far worked hard to conquer China, the focus, with few exceptions, has been placed on large cities, especially those in coastal areas; however, a strong urban development is taking place in the inland of the country, where many peasants are migrating in search of new ways of life.
Although he acknowledges this situation and sees it as positive, Huang calls for patience. "Indeed, future growth is going to take place in the inland regions, but be patient until the time they have more money to spend."
For now, it is still easier and cheaper to sell to large coastal cities, such as Shanghai, which, in addition to having higher incomes, require little logistics, contrary to what happens when one wants to move towards the inland.
This is related to the development of infrastructure in the country. "China probably has one of the best motorway networks in the world today, but when it comes to the cold chain, it still needs to grow and improve a lot, not only in terms of facilities, but also in the mentality of people," he affirms, referring to the infrequent use of cold storage for the preservation of food. In Yiguo, they have observed that the biggest growth in fresh food online sales has been recorded precisely in the inland cities. "There is immense potential in these cities, given their special characteristics," states Li. He agrees with Huang in identifying the lack of a developed logistics system to maintain the cold chain as the biggest challenge to access them. So important is this issue that Yiguo has already built 11 distribution centres across the country, allowing them to sell already in 27 provinces and 310 cities in China; something that no other retailer in the country selling fresh food is able to do.
Chile's weaknesses
For Huang, one of Chile's advantages is that it has large volumes of many different products, but the lack of consistency in their quality plays against it.
"Chile is currently the largest supplier of Western fruits to the Chinese market;" however, the specialist believes that the country has several weaknesses that exporters must work to tackle.
In terms of quality, he lists several key issues. "Chilean plums have a terrible taste; the price of kiwis is only about a third of New Zealand's, and grapes performed terribly last season."
A second aspect that he considered essential is logistics. "It is necessary to reduce shipping times. The Chilean industry needs to negotiate with shipping companies to ensure faster shipments, as they did with cherries."
He also considers it essential to invest in marketing. "Every penny spent on marketing in China is going to be worth it; the problem is: who will be paying for it?"
Another very important aspect in which he believes Chileans need to improve has to do with documentation. "Chilean companies are doing very poorly in terms of preparing the documentation, with many errors and delays." For Li, it is essential to work both on the brand and the marketing for Chilean products, "so that Chinese consumers become more familiar with Chilean products and are more aware of them and feel a greater attachment to them."
Source: Economiaynegocios.cl
