What started more than a year ago as an experiment by Tmall.com, China’s largest B2C shopping website, and the U.S. Department of Agriculture allowing Chinese online shoppers to buy fresh seafood from Alaska and other American food products has grown into a multi-country buffet that is regularly putting fresh food from dozens of countries on the tables of PRC consumers.
Capitalizing on growing demand from China for imported edibles that can’t often be found in local supermarkets, Tmall.com has been steadily building the website’s fresh food platform through a series of joint promotions with trade offices of foreign governments.
The latest promotion, tied to Chinese New Year, has seen shoppers buying blueberries from Chile, lamb from New Zealand, lobsters from Canada, and custard apples from Taiwan. In all, 25 countries are participating in the CNY promotion, during which more than 120,000 consumers have spent more than RMB 20 million on imported specialty foods.
The New Year promotion is part of an ongoing effort by Tmall.com, owned by Alibaba Group, to broaden e-commerce’s role in China’s food imports. There’s growing demand for overseas foods, fresh and processed both, because of the country’s many food-safety scares; at the same time, China’s domestic agricultural industry is having a harder time satisfying the appetites of the burgeoning middle class. In the first half of last year alone, Tmall.com saw a 500 percent surge in sales of imported food, according to Tmall officials (more recent figures are not available).
E-commerce offers a way for overseas producers to help fill the gap by selling directly to consumers. Bypassing traditional distribution networks cuts out middlemen and lowers costs, said Tmall.com spokeswoman Florence Shih.
“Chinese consumers, especially those who live beyond Beijing and Shanghai, lack access to high quality, fresh and nutritious imported food products,” Shih said. “Our model enables suppliers from around the world to tap into the currently unmet demand in China, and our users to purchase cherries from the U.S., king crab from Chile or even kiwis from New Zealand at affordable prices, much of the time at below the cost of what they would be charged in their local supermarkets.”
Getting fresh produce, fish and meat to consumers’ doorsteps poses international shipping and supply chain challenges. One of the keys to the Tmall.com program has been the sale of fresh food through the website’s pre-sale channel, yushou.tmall.com.
Products sold via yushou are available only by special order. Customers place advance orders during designated promotion periods so that farmers and fishermen know precisely what demand is, later shipping the goods within a specified time period. Depending on the country and type of produce, field-to-doorstep deliveries take place in as little as 2-3 days, ensuring foods don’t spoil during international shipping.
Other Alibaba-owned e-shopping websites, Taobao Marketplace and group-shopping site Juhuasuan, are also encouraging food imports through special promotions. But Tmall.com appears to have enjoyed particular success working with the U.S. Department of Agriculture’s trade office in Shanghai.
This collaboration last year resulted in limited-time deals on a variety of food products, including Alaska salmon and cod, and raisins and cherries from Washington, Oregon, Idaho, Montana, California and Utah. Last summer Tmall.com sold 168 tons of cherries in less than two weeks; more than 50 tons of Alaskan seafood were sold during a fall promotion.
These successes “really got the attention of our U.S. agricultural producer associations,” prompting other producers to sign up for future Tmall.com promotions, said Keith Schneller, director of the USDA’s Agricultural Trade Office in Shanghai, in an e-mail. In the works are promotions of a wide variety of U.S. products including pork, seafood, fresh fruit, snack foods and others, he said.
“One of the main benefits of using e-commerce is that the U.S. producer does not have to worry about paying various ‘shelf’ fees and distributing the products to numerous supermarkets,” Schneller said, “but only has to deliver the product to the distribution center of the e-commerce company that takes care of the marketing, sales, and distribution of the product directly to the consumers.”
Schneller stressed that sales via Tmall.com makes it much easier for U.S. producers to reach millions of consumers in 2nd and 3rd tier cities across China who might not have access to higher end supermarkets that carry imported food and beverage products.
He added that selling via the Internet also allows U.S. producers to promote their goods using videos and by posting nutritional information, recipes and other detailed information. “This is useful for the consumer and helps the U.S. producer differentiate his products from others,” he said. E-commerce “provides us an opportunity to educate consumers across China about the health benefits of our products and helps assure them that the products are authentic.”
Schneller said he expected sales volumes will continue to increase rapidly as more Chinese go online, “especially through smart phones, which should increase mobile online sales of U.S. food and beverage products in China in the future.”
Tmall.com is continuing to work with agricultural trade agencies in countries including Chile, Thailand, Taiwan, Denmark and others on fresh food promotions. “Talks are ongoing and we are constantly looking to expand the product offerings available to Chinese consumers via Tmall.com,” Shih said.