PMA Fresh Connections China: the future of e-commerce
No one can deny the tremendous opportunities China presents for produce. Yet it is difficult to keep up with such a complex, multilayered market. The changing landscape in the produce industry keeps even the most astute market observers on their toes. And some of the trends happening in the country, such as the emergence of e-commerce, are having a huge impact both domestically and globally.
To analyze this evolving market, the Produce Marketing Association's Fresh Connections: China once again brought together both Chinese and global industry players to discuss the latest market situation and more importantly, trends to look out for.
The future of e-commerce in China
Held for the second time in Shanghai, the conference was extended to a full-day event with multiple presentations, panel discussions and networking breaks. E-commerce was among the most heated topics. A panel focused on trends in retail and food service caught the most attention.
"There are tremendous opportunities in growth and even direct importing for e-commerce. We also discovered that when it comes to food services, there are opportunities in growth as well," said Richard Owen, vice president of PMA’s global business development, in a conversation with www.freshfruitportal.com after the event.
"I think the world is focused on China as a market, not only as a market to export into but also a market that has internal growth within itself for opportunities for both fruits and vegetables."
At the afternoon panel, retailers with different niche focuses shared their insights by presenting business models and strategies.
Loren Zhao, co-founder of China’s star online retailer Fruitday.com, shared with the audience how the majority of China’s population has transitioned into the web 2.0 era.
"From 2010 to 2013, China’s e-commerce market has grown 89% and is expected to surpass the U.S to become the biggest e-commerce country in the world," Zhao said.
He highlighted how celebrities in China play a huge role on social media in helping brand and market products.
Zhao described social media as the catalyst for category growth. Beyond Weibo, China’s Twitter, Zhao urged companies to also utilize the local social application wechat, which has quickly become a powerful and unique platform for online marketing in China.
Cui Yixiong, president of Cityshop China, a specialty supermarket chain that aims to provide produce from farm to fork, gave a presentation on the retailer's effort to develop its own e-commerce platform and logistic system, while diversifying its business into processed produce.
Cui said e-commerce is already having an impact on the traditional retail model.
"By creating our own restaurants and transitioning from fresh produce into processed produce, we are able to mitigate the effects that e-commerce is having on the traditional supermarket model," Cui said.
Michael Worthington, moderator of the panel and president of PMA Australia-New Zealand, told www.freshfruitportal.com that he was impressed by some of the comments at the panel, highlighting that China should not be seen as one single market.
"The event helps people understand the complexity of the Chinese market, because everybody talks about coming into China and they immediately think about Carreforre, Walmart, Tesco, Vangard. They think that immediately instead of thinking maybe there’s another market segment there. And I think online has shown there’s a market segment there," he said.
"I would understand why an organization like Walmart would say 'there’s no opportunity for Australian vegetables' because our cost is too high, and they already have great products here. [On the other hand] you've got a specialty product company like Cityshop that is looking for niche windows and suddenly it gives a different answer. So I think it’s very encouraging."