Chinese supermarket appeals to high-end fruit consumers
As part of this year's PMA Fresh Connections: China, conventioneers were invited to visit retailers across Shanghai, including wholesale markets, supermarkets, specialty stores and the fresh produce markets most commonly seen in China.
China Resources Vanguard’s specialty store, Ole', stood out among the crowd for its variety of imported goods, accompanied by high-end sales strategies and marketing ideas.
At present, Ole' has more than 40 stores in over 20 cities across China. At one Ole' location in the Xuhui District, the PMA delegation was greeted with Australian red wine, on offer at the entrance, and various imported fruits, including cherry tomatoes from the U.S., kiwifruits from New Zealand and blood oranges from Spain.
Guo Manjiang, Ole' general manager, said fresh produce accounts for 40% of the store's offering.
"Importation takes up 70% of all goods in the store," Guo told www.freshfruitportal.com.
"There are three types of Ole' retail stores. Ours is primarily focused on fresh produce. In others there is more of a focus on life-style or non-food goods and specialty goods. Ole' will also have a convenience store format in the future."
Guo emphasized "excellent quality, reasonable prices" as a selling point at Ole' stores, targeted at middle- to high-income customers.
"Take apples as an example - their size, quality, taste, sugar level and sweetness are all different, therefore the quality is different. The cherry tomatoes we sell, though 28 yuan (US$4.50) a box, are sweeter than any tomatoes you can find in the market," he said.
As Guo finished talking, the PMA delegation was left amazed by the price tag on the Japanese "world" apple, sold at ¥266 (US$42.90) each.
"It's over US$40 dollars for one apple!" an American PMA conventioneer exclaimed, reflecting the shock from these senior fresh produce professionals to have found such a high-end product on the Chinese fruit market.
Guo explained such products have their place in the Ole' line-up and cater to customers who demand quality over all else.
"It is because most people today tend to be quality conscious. As long as they are financially capable, they will want to purchase healthier products and products of better quality. In fact, price is not their major concern," Guo said.
Ole' first opened shop in 2004, with this particular location opening in July 2010. Since, the company has enjoyed strong growth, with annual transactions growing at a double-digit rate, according to Guo.
"Olé's business has been growing for ten years in a row since the first Ole' opened in Shenzhen in 2004," he said.
"We have stores in the eastern, western, northern and southern regions. In the western region, we have stores in Shaanxi Province. We also have stores in Zhengzhou, Shenyang, Jinan, Ningbo, Hangzhou, Shanghai, Shenzhen, Wuhan, Guangzhou, etc.," Guo said.
"The business has been smooth since the very beginning, because it meets the needs of some people who have extraordinary consumption ability. They had to travel either to Hong Kong or overseas to buy these goods in the old days, and sometimes they were not allowed to bring these goods back home. So we provide them with such a channel."
Speaking of the income level of Ole' customers, Guo said that their target customers vary.
"For instance, [our customers include] owners of private companies whose annual income is more than ¥500,000 (over US$80,000). The self-employed are the majority of our customers, who have financial freedom and whose income is beyond my knowledge.
"Some returning from overseas and senior white collar workers are also our customers. They make at least ¥150,000 (US$24,000) a year, and I can’t guess where the ceiling is."
"The change of market trends results in higher demand from our customers. But this group basically remains unchanged, the middle- and high-end groups."
In order to provide a more appealing shopping experience, Ole', on this occasion, had set up an exhibition stall for Taiwanese pineapples and hired an experienced fruit master from Taiwan to slice and box pineapples. Other, less spacious stalls included free samples of various imported fruits. One stall also had staff peeling grapefruit for customers.
"We want to build a kind of 'connection' with customers," Guo said.
"We are nothing like Wal-Mart or Sam's Club. They may be wholesale- and quantity-oriented retailers. On our side, we might sell less but we provide fresher and healthier products of better quality."
Apart from selling fresh produce directly, Ole' has also adopted alternative shelf arrangements for fruit products. For example, Ole' might place certain processed fruit products, such as juice, on the shelves above the fresh fruits. This particular Ole' store also included a bakery, which sold baked goods with fresh fruits, such as blueberries, under the Ole' brand name.