Currently, the sales composition of various organic agriculture sales channels worldwide is as follows: supermarkets account for 25%–50%, organic specialty stores account for 25%–40%, and direct sales account for 10%–40%. The domestic organic product sales channels present the following situation:
1. KA Hypermarkets
China's retail market is mainly monopolized by several international retail groups. Carrefour, Wal-mart, Metro, and Tesco have already completed their layout across major markets in China. Lotus (now renamed CP Lotus), Jusco, ParknShop, and others have also established a firm foothold in several local areas of China. As for Chinese domestic supermarkets, apart from China Resources Vanguard, which has already laid out operations nationwide, most expand in local markets respectively, such as Nonggongshang and Century Lianhua in Shanghai, Suguo Supermarket and Times Supermarket in Jiangsu, Wumart in Beijing, and Renrenle Chain Supermarket in Shenzhen.
Although Carrefour lags behind Wal-mart in the international market, relying on its flexible system and the advantage of entering the Chinese market earlier, it firmly occupies the leading position in China's foreign-funded retail market, especially in major northern cities such as Shanghai and Beijing, where Carrefour's advantages are even more obvious. At the same time, Carrefour was also the first retail enterprise to introduce organic food into supermarkets. At present, Carrefour supermarkets in all major cities have special counters for organic vegetables and coarse grains. The top-ranking organic companies in China by domestic sales, such as Beijing Organic Farm Science and Trade Co., Ltd., Beijing Qingpuyuan Vegetable Co., Ltd., and Shanghai Chongbentang Agriculture Co., Ltd., were all among the earliest suppliers to Carrefour.
Wal-mart, meanwhile, has already begun OEM production of organic products in China, mainly including coarse grains and honey.
Perhaps because of its German origin, Metro is one of the large supermarkets in China that relatively supports organic food. They sell organic meat products, and you can also find organic pasta and other imported organic products from Germany among their own imported OEM products.
Compared with domestic supermarkets, foreign-funded supermarkets sell more varieties of imported food. These imported foods are generally imported and distributed by imported food companies located in Shanghai, Beijing, and Shenzhen, and belong to the most mass-market and lower-priced imported foods.
Traditional chain supermarkets occupy a dominant position in China's retail market and are also in an absolutely leading position in negotiations with suppliers. At the same time, under the current situation of increasing attention to food safety and product quality, large chain supermarkets are imposing increasingly high requirements on suppliers, while most Chinese domestic organic food enterprises are emerging small enterprises, and few have the real strength to supply traditional chain supermarkets. At the same time, large chain supermarkets pursue more low prices and large sales volumes, and at the same time apportion high sales expenses and various inexplicable costs to suppliers; while many high-end organic foods operated by Chinese organic producers or importers currently have deficiencies in price and supply, which determines that they cannot enter large chain supermarkets for sales.
2. Organic Retail Specialty Stores
In 2005, China's first organic food specialty store, Ostore, opened in Shanghai. Ostore was invested in by Chinese Americans and Taiwanese. A large proportion of its products were imported organic products, including the famous German brand Rapunzel, which they imported entirely themselves. At the same time, they set up a cafe and restaurant and carried out home delivery in Shanghai. However, the incomplete supply chain of organic food in China led to astonishingly high prices for products sold at Ostore. A box of organic mung bean sprouts with a net weight of 150 grams was priced at 18 yuan, and store sales were always unsatisfactory. The imported product section also could not truly operate normally without the support of other sales channels. After realizing this problem, Ostore's operators began to push more of their products (including products they imported themselves) to other high-end supermarkets in Shanghai and gradually transformed into distributors. However, in 2007, due to disagreements among shareholders, Ostore still ended up closing.
After Ostore appeared in China, organic food stores opened one after another in Shanghai, Beijing, Shenzhen, and even other Chinese cities, but very few truly succeeded; those that still persist and continue to develop mainly include Lohao City and Helekang.
Lohao City was founded in Beijing in 2006. It currently has 8 stores in Beijing and one store in Shenzhen, with areas ranging from 40 to 400 square meters; its retail network in Beijing has gradually begun to take shape. In its early stage, Lohao City also mainly targeted foreigners and drew on Ostore's experience. While selling organic food, it also sold natural and green products to supplement the insufficiency in organic food supply. At the same time, in its early stage, Lohao City did not begin importing on its own, but instead relied more on existing suppliers. As the number of stores continued to increase, Lohao City timely launched its private brand “Lohao's,” with OEM products including organic honey, jam, coarse grains, and many other products, and began directly importing organic food from abroad. Imported products included dried fruits, noodles, juice, and so on. Affected by the macroeconomic environment, Lohao City closed two stores in Shanghai in 2008 and planned to re-enter the Shanghai market in 2009. It can be said that after three years since its establishment and continuous adjustment, Lohao City gradually found its position and business model. Opening its franchise market in 2009 was a milestone in its development process, and we shall wait and see how Lohao City performs in the future.
Helekang Organic Food Chain Store was invested in by Shanghai Tongmai Food Co., Ltd. It currently has 14 stores in Shanghai, mainly small specialty stores of around 100 square meters. Its original plan to open 20 stores in Shanghai by the end of 2008 was also suspended due to the impact of the economic situation. Unlike Lohao, Tongmai basically sells only certified organic products. At the same time, the proportion of imported food at Helekang is relatively small, mainly because its target customer group is mainly Chinese. Helekang has also carried out simple OEM production, but has not begun importing on its own.
Wuduzhijia from Taiwan is based in the Guangdong market. It has currently opened 3 stores in Shenzhen, and stores in Zhuhai and Jiangmen are about to open. Compared with Lohao City and Tongmai, they introduced the Taiwanese franchise model to the domestic market earlier. However, the incompleteness of the domestic organic industry chain will be the biggest challenge for organic store franchising. It is worth mentioning Nanjing's Planck Organic Specialty Store. Through four years of development, it has grown to eight stores, and seven of them have achieved break-even, indicating that the organic market has great development potential after in-depth promotion.
3. Traditional High-end Food Supermarkets
High-end food supermarkets are currently the main sales channel for imported organic food. The high-end food supermarkets mentioned here include two categories. One category is chain supermarkets mainly focused on imported food and targeting foreigners in China, such as Beijing Hualian BHG Marketplace, Beijing's JennyLou chain supermarkets, Shanghai's Cityshop, and Pine Marketplace. The other category is high-end food supermarkets supporting large high-end shopping venues, such as Beijing's Pacific Department Store, Zhengzhou's Dennis Department Store, Wenzhou's Danlu Department Store, Shanghai's Jiu Guang Department Store, Parkson Supermarket, and Nanjing's Golden Eagle Shopping Center.
Among them, Shanghai's Cityshop and Pine Marketplace are themselves importers. Cityshop in particular occupies half of Shanghai's imported food market. At the same time, they have agents or branches around the world to help them find the newest and most popular products, but they do not directly contact manufacturers. Therefore, in Cityshop, there are dedicated organic food counters where one can see many of the latest organic foods from various countries, such as Germany's most popular Bionade organic beverage, the United States' Newman's Own Organic, Amy's Kitchen, and so on. At the same time, however, these manufacturers do not know that their products have already been sold in China.
All other high-end food stores are generally supplied by imported food agents. At present, China also has specialized organic food importers and agents, such as Shanghai Shiyi Trading and Nanjing Maoshengyuan Technology.
4. Online Sales and Catalog Sales
Although online sales still account for a very small proportion in China, their development speed is astonishing. Although food is not the main product category for online sales and is constrained by shelf-life issues in food delivery, online organic food sales combined with home delivery systems have been surging over the past year. Various supermarkets, including organic food chains, have their own online sales systems; at the same time, many organic suppliers have also established their own online sales and catalog sales systems, such as Beijing Organic Farm, Hong Kong Green Dot Dot, and Shanghai Chongbentang.
Here we mainly introduce several online home delivery and sales systems without physical stores.
”Tootoo Organic Source" (www.tootoofood.com) is a B2C platform dedicated to organic food sales fully created by the Ninetowns Group (NASDAQ: NINE) in 2008. It has currently begun sales in Beijing and Shenzhen and plans to enter Shanghai.
Redbaby is China's most successful maternal and infant sales company. It mainly conducts business through catalog sales supplemented by online sales, has branches across the country, and has a warehouse logistics system. Healthy natural food is the major part of its food sales. At present, multiple organic food companies sell through Redbaby.
YiGuo is China's most famous online fruit delivery company, conducting business in Shanghai and Beijing. The company has now expanded its products to other high-end foods, including organic food, and mainly focuses on packaged foods.
Shanghai Helekang was established in the first half of 2008. It currently delivers organic and natural food in the Shanghai area and has already expanded to the Suzhou area. It may expand to surrounding cities in the next few years, with products mainly consisting of daily necessities.
Beijing Boyang (Ofood) is located in Beijing and is China's earliest and most comprehensive online organic food sales system. In addition to having its own website, it also mainly sells through Taobao and can deliver nationwide. It has currently launched the Boyang series of organic products and is now transforming toward becoming a supplier.
There are also websites such as Jiali Shopping, Afanti, and Green Collar Commune that entered the ranks of online organic sales in 2008. All professional online sales companies currently do not have their own upstream channels and instead purchase through suppliers.
5. Catering Services
China's organic catering industry has not truly begun yet. At present, restaurants under the organic banner have appeared in Shanghai, Beijing, and Shenzhen respectively. Among the better known ones are Beijing's Shanzhai Japanese Cuisine, Shanghai's Qimin Organic Hot Pot Restaurant, and Shanghai's Mingtang Organic Cantonese Restaurant. However, consumers have no way to verify the source of ingredients, nor is it possible to achieve 100% organic. At the same time, many catering enterprises such as Yichazuo and South Beauty cater to the development of organic dining by promoting one or more organic dishes. Traditional vegetarian restaurants, on the other hand, have gradually used more and more organic ingredients. Beijing's Jingxinlian and Shanghai's Zaozishu are both vegetarian restaurants related to Buddhist concepts.
The greatest opportunity for organic ingredients in the catering service industry comes from high-end hotels and restaurants in China's major cities. In Shanghai, Ostore was the first company to recommend organic ingredients to five-star hotels. As early as 2006, they jointly launched an organic buffet for hotel guests at noon on weekends with the Westin Hotel. Now several five-star hotels in Shanghai more or less use some organic products, mainly including organic eggs, organic cooking oil, organic milk and yogurt, and so on.
In China's high-end and foreign-related catering service industry, many ingredients are imported because domestic ingredients cannot meet their requirements in terms of quality. The most obvious examples are coffee, dairy products, flour, and meat (mutton, beef). In 2008, exporters of Australian organic beef and mutton had already come to Shanghai to seek export opportunities. At present, China does not have organic suppliers specializing in the catering channel, but several traditional catering distribution companies have begun to add organic varieties to their supplied products, such as Beijing Aluoke Coffee Co., Ltd. In addition, the parent company of Hong Kong Green Dot Dot Organic Food Company has branches in Beijing, Shanghai, and Guangdong, mainly engaged in catering distribution business.
Red wine is a unique category of product, requiring importers to have a special alcohol import license. At present, red wine importers are mostly professional red wine importers. In addition to the catering service industry, large international supermarkets such as Metro and Carrefour are also major sales channels for red wine.
6. Gift Group-Buying Market
The gift group-buying market is one of the important channels for organic sales. The gift group-buying market here is further divided into business gifts and welfare gifts. Many organic food production enterprises do not even enter the circulation field for sales, but rely entirely on the group-buying market in their location. The higher profits and relatively lower sales costs of the group-buying market have led many production enterprises to also launch gift packaging for organic products.
At the same time, many companies in the circulation field also regard group buying as a major sales channel. Organic food group buying generally takes the form of gift boxes, the most common being organic vegetable gift boxes, organic coarse grain gift boxes, organic mooncake gift boxes, organic honey gift boxes, and so on. This type of group buying is mainly concentrated in the second half of each year. Many traditional gift sales companies have successively added organic gift boxes to their sales lists, resulting in the emergence of organic brands specializing in organic gifts, such as Xiangtu Xiangqin. Another model is that larger enterprises balance annual sales by issuing gift cards. For example, Zhenggu (Beijing) Agricultural Development Co., Ltd. perfectly meets customer needs through rechargeable cards and customized cards, while also allowing the delivery workload to be distributed evenly throughout the year. At the same time, most organic retail enterprises have launched stored-value cards that can be sold as gifts, and sales depend on their level of investment in group-buying sales.
7. Farm Direct Sales and Ecotourism Market
Organic farms are the core of the entire organic food industry. A vibrant organic market inevitably requires the existence of surrounding organic farms. In addition to production, farms can also derive various different market activities. The various services provided by organic farms can effectively strengthen the consumer stickiness of organic food enterprises. Organic farms around large cities, whether they are suppliers to large supermarkets or supporting farms of organic chain supermarkets, have mostly carried out ecotourism and farm delivery/group buying, and some have also entered the catering market. For example, Beijing Liuminying Ecological Farm, Shanghai's BioFarm, Planck Farm connected with Nanjing Planck Organic, and Zhiwan Organic Memorial Farm affiliated with Lohao City. At the same time, many traditional farm stays and private farms have also begun to plant and conduct marketing according to organic standards, such as Beijing's Italian Farm. Such ecotourism farms are mostly found around Beijing.
At the same time, some civil organizations and private farms have also begun projects for urban resident households to contract land for planting, which can be regarded as pioneers of Community Supported Agriculture (CSA) in China.
Farmers' markets are an important channel for organic product sales abroad, but unfortunately, China does not yet have a true farmers' market. In Beijing and Shanghai, some organizations and real estate developers have organized small organic food markets, but most participants are not producers, such as the organic food market at Shanghai's Eco Design Fair. At the same time, in some regions there are also government-led agricultural carnivals and agricultural product exhibitions, which to some extent can be regarded as a type of farmers' market.บทความมาจากFOFCC-http://fofcc.org.cn/th/11205/
Reprinted from China Marketing Communication NetworkบทความมาจากFOFCC-http://fofcc.org.cn/th/11205/