Chi­nese can now cherry pick in US

China Daily (Canada) - - ACROSSAMERICA - By YU WEI in San Fran­cisco yuwei12@chi­nadai­lyusa.com

As China’s fast-grow­ing econ­omy continues to in­crease de­mand for US prod­ucts, col­lab­o­ra­tion be­tween Tmall.com and US Depart­ment of Agri­cul­ture (USDA) has cre­ated new op­por­tu­ni­ties for US ex­porters to break into the gi­gan­tic mar­ket across the Pa­cific.

Ac­cord­ing to Alibaba, Tmall. com’s e-com­merce par­ent com­pany, 168 tons of North­west cher­ries sold in less than two weeks, and 50 tons of Alaska seafood sold in a lim­it­ed­time deal through a pre-sale chan­nel on Tmall.com

“Tmall has opened up a whole new av­enue for sales,” Gary Clubb, se­nior busi­ness de­vel­op­ment man­ager at Tmall.com, told China Daily af­ter par­tic­i­pat­ing the USDA 2014 Agri­cul­tural Out­look Fo­rum in Wash­ing­ton DC on Thurs­day.

Clubb said since the pre-sale chan­nel al­lows cus­tomers to place ad­vance or­ders so that US-based pro­duc­ers can ac­cu­rately cal­cu­late con­sumer de­mand and ship only prod­ucts that are or­dered, the cost ef­fi­ciency is passed on to not only the sup­plier, but also the con­sumer.

“It is a win-win sit­u­a­tion on both sides,” he added.

Since the US food pro­mo­tion launched on Tmall.com last Jan­uary, var­i­ous prod­ucts from the US have been pro­moted through its pre-sale chan­nel. Po­ten­tial US-prod­ucts be­ing dis­cussed for the pro­gram in­clude pork, seafood, fresh fruit and snack foods, Alibaba said.

“We look mainly at the de­mand we have seen on our plat­form,” said Clubb. “As the largest ecom­merce plat­form in China, we have a lot of in­for­ma­tion and data on con­sumer de­mand. We can use our own data and see which food prod­ucts best fit the mar­ket.”

He noted that a new vir­tual USA Food Pavil­ion in­side Tmall.com will be avail­able to Chi­nese con­sumers this year. Through it, the USDA will work with US pro­duc­ers to cre­ate a year-round sched­ule of mar­ket pro­mo­tions fea­tur­ing var­i­ous sea­sonal and hol­i­day prod­ucts and themes.

“This has been cre­ated as a fixed mar­ket re­source,” he said. “As op­posed to a pre-sale, which is a limited time pro­mo­tion, we will have a place of­fer­ing a con­stant sup­ply of US brands and prod­ucts to our con­sumers.”

China has risen to be­come the world’s largest e-com­merce mar­ket, and US com­pa­nies are pay­ing more at­ten­tion to Tmall.com be­cause of its large, ac­ces­si­ble plat­form.

Keith Sch­neller, di­rec­tor of the USDA trade of­fice in Shang­hai, said he has been re­ceiv­ing more and more in­quiries from US com­pa­nies af­ter the pro­mo­tions, which pro­vide a plat­form for US com­pa­nies to sell di­rectly to Chi­nese con­sumers.

“I be­lieve China is leap frog­ging ahead of most coun­tries in the world when it comes to on-line sales of food and bev­er­ages, and Tmall’s pre-sale plat­form is cre­at­ing many op­por­tu­ni­ties for US prod­ucts,” Sch­neller said.

Andy Tsay, chair of op­er­a­tions man­age­ment and in­for­ma­tion sys­tems at the Leavey School of Busi­ness at Santa Clara Univer­sity, said there are sev­eral dis­tinc­tive as­pects of Tmall.com’s pre-sale model.

“On­line sales is es­pe­cially sen­si­ble for prod­ucts for which the in­ven­tory is at high risk, and this is true for per­ish­able items like food, which is one rea­son why the TMall/USDA strat­egy is at­trac­tive,” Tsay said. “Chi­nese con­sumers are es­pe­cially ner­vous about food qual­ity these days, and TMall and the USDA are highly trust­wor­thy brands.”

Be­cause the pre-sale chan­nel al­lows users pay a small de­posit on a selected item for later de­liv­ery and prices that con­sumers ul­ti­mately pay for many items de­cline as the num­ber of cus­tomers rises, Tsay said.

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