New challenges and opportunities for China’s cherry import market
The Chilean cherry industry celebrated a season with historical export volumes during the 2023 edition of the Global Cherry Summit. Chile exported more than 415,000 tons of the fruit, a 17% increase year-on-year.
Chilean exports concentrated 97% of China's cherry import market, being by far the biggest market for the country.
During the third panel of the event, called “China 2.0: New challenges and opportunities,” members of the Chinese industry analyzed different variables currently affecting the cherry market, evaluating factors that have changed and those that will become more relevant in the future.
Retail trends in China
Structurally, the consumption trends in China and retail markets are changing, especially after the pandemic.
Patti Sun, CEO of Daymon Worldwide China spoke about the structure of Chinese retail stores, indicating that membership stores like Costco and Sam’s Club are still dominating the market.
Sam’s Club is especially dominant in the Chinese market, operating 42 stores in 25 cities, way ahead of Costco which has only three stores, but plans to open four more during 2023.
Sun mentioned the growth of home delivery services, which is an increasing trend in China. She believes that all retailers will have to develop their own platforms for delivery services to be able to survive in the market.
This is, as Sun said, the rise of multi-platforms for retailers, which include membership stores, neighborhood self-pick-ups, mini stores, discounter outlets, and O2O stores.
The evolution of consumption trends in urban China
Similarly to the Western world, China is turning more and more to real time-retail, which, as Sun explained, is quick delivery food services that process and deliver food within 30 minutes.
White-collar workers in urban China are consuming more and more ready-to-eat food, including snacks, fruits, and full meals. This opens a good opportunity for fresh produce since they are a quick, healthy, and easy-to-process snack that people want to consume.
2022-23 Chilean cherries season
Konna Mu, General manager of Chinese distributor, Joy Wing Mau, the leading cherry importer from Chile, indicated that this season brought along stable fruit in terms of quality. It had the best results of the last three years for cherries in the Chinese market.
“You need to be careful with the Chinese market, because as long as you are delivering good quality fruit, they will pay for it, however, as soon as you lack in terms of quality of transport of the fruit, they will punish the price,” said Mu.
In early December of 2022, China finally lifted all Covid-19 restrictions, allowing the market to stabilize, and just in time for the Chilean cherry season.
According to Mu, week 5 of the season is key, near the Chinese New Year when the highest volumes are marketed in the country.
Mu reinforced what Patti Sun said about retailers in China, showing that membership retailers are growing at about a 40% yearly rate.
Online platforms are becoming more and more important for the cherry market, both for sales and for promotions.
Challenges for the market
Port distribution is going to be critical to continue growing the cherry market in China.
“Having more entry ports is one of the solutions because right now 80% of imports are concentrated in Hong Kong, Shanghai, and Nansha,” said Mu.
This will allow more fruit to be distributed quicker to new growing markets in China, and it will also take some pressure away from the logistics in the main ports.
“We need to be more creative with logistics. This season we had the Cherry Express which really helps with transport times. However, we need these to get to more ports,” added Mu.
Mu also insisted on diversifying packaging to give the consumer more options.
He indicated that consumers are getting more and more familiar with the industry, and understand more about the sales, meaning that they will have higher demands and requirements for what they consume.
“Stable quality is the key to winning the market,” said Mu.
Smaller fruit is falling out of the market, therefore, according to Mu, the focus has to be on jumbo-size fruit which is the most requested by Chinese buyers.
Social media and e-commerce impact on the cherry industry
Social media has become critical for cherry sales in China. Online, consumers can see all types of cherry promotions, influencers promoting the fruit, and details of the health benefits.
“They want to understand why, how, and they want to hear stories to be a part of the industry in order to buy the cherries. Therefore, we need a lot of branding and merchandising in China, with different and creative ways to interact with those consumers,” said Mu.
Larry Zhai, another presenter at the event spoke about Douyin, a Chinese social media and e-commerce platform, very similar to TikTok which has become the main platform for marketing Chilean cherries.
“Douyin has 600 million users who publish and view all types of content, then through the algorithm, users can see content based on their interests. The cherry industry has made its way into this platform and around 14,000 tons of Chilean cherries have been sold through the platform,” said Zhai.
Almost 2,000 influencers on the platforms are currently working with brands to promote the imported fruit.
One famous Chinese streamer was able to sell 80,000 cherry boxes (2.5 kg) in just one livestream session, which shows the power of this social media platform.