Chinese can now cherry pick in US
Updated: 2014-02-21 13:16
By Yu Wei in San Francisco (China Daily USA)
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 limited-time 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.
(China Daily USA 02/21/2014 page2)