Pity the poor banana grower on China’s Hainan Island. A combination of overenthusiastic production, a delayed spring harvest and an unfounded rumor that farmers used illegal chemicals to accelerate ripening has created a severe imbalance between supply and demand in the Chinese market, saddling farmers with yellow mountains of fruit destined to rot in the fields. Nobody’s getting paid: banana prices have plunged by 95% from the record-breaking RMB 7.6 per kilo in February to RMB 0.4 per kilo in June, says Interfax China.
If only there was a way to get people to buy more bananas. Oh wait, there is: group shopping deal! Juhuasuan, Taobao’s group shopping service, on July 8 offered residents of Hangzhou a twofer. Buyers who purchased one bunch at RMB 8.8 not only got another bunch for free, but also received a RMB 100 coupon from Centurymart, a supermarket chain partnering with Taobao. Buyers will receive a code on their mobile phones allowing them to claim their fruit at 10 designated Centurymart supermarkets in Hangzhou between July 14 and July 17.
Juhuasuan wanted to move 25 tons of bananas for the event, which was supposed to last through July 10. But the entire supply, plus another 50 tons, sold out within thirty minutes, so the offer was extended. In all, a total of 29,800 orders for 175 tons of bananas were placed on July 8–doubling the fruit group-buy record set by Xinjiang cantaloupes in a similar deal last month, say Juhuasuan officials.
Juhuasuan sponsored the deal to show how e-commerce could do some good, officials said. According to Zhao Jun, head of the provincial banana association, prices for good-quality bananas currently range from RMB 1.4 to RMB 1.6 per kilo. Juhuasuan paid growers RMB 1.4 per kilo, the low end of the range. It’s expected they’ll be able to recover their costs, which is better than a poke in the eye with a rotten banana. Other links in the supply chain, such as shippers, also participated at cost. “We hoped to assemble the grassroots power on our platform to help banana growers in the most efficient manner and at the lowest cost,” says Yan Limin, head of Juhuasuan.
Buyers get a bargain. Farmers mitigate their losses. Bananas are consumed. Everybody wins. Juhuasuan is looking to duplicate the Hangzhou deal elsewhere.