How to get your food & beverage products in the China market? The key is to start in a few high-end supermarkets and position your product there in the right way. When the standard is set, you can move to more mid-range supermarkets with more reach.
Step 1: start with a brand and a clear origin
This approach applies to branded food & beverage products. Please note that a brand is nothing more than a way to recognise a product. So there is no need to be on par with Coca-cola or Magnum. But you will have to ‘load’ the brand in the right way for the China market. And this starts with a brand name that can also be pronounced easily in China and that has the right associations. It is an art in itself to come up with the right brand name.
Everything of your product that can be copied in China, eventually will be copied. The only thing that can’t be copied is the origin of your product. So if it is German, stress this on your packaging an align with associations like quality and pureness. If it is French, ensure elegance and taste. Load your brand with elements that are associated by the Chinese with your country.
Step 2. Prepare
Not all products can be imported in China from all countries. Especially on fresh products there are many restrictions. Make sure that you are allowed to import your products into China and find a party who can do this for you, both in the beginning and on a larger scale.
Also check whether you are ready for China and be able to scale up dramatically. Otherwise you should set expectations from the beginning and confine yourself to for example one province.
Market entry into China is not cheap. You hardly have a chance of finding a distributor that takes all the risks for your product, especially not in the competitive F&B market. You will have to buy yourself in, pay listing fees. But the revenue may also be very big.
Step 3. Start high
The essence is to get your product positioned really high end. Perhaps even at prices five times what you would dare to ask in Europe or the USA. There are supermarket chains who focus purely on foreign products: BHG, OLE, Jenny Lou’s, City Super, Corner’s Deli. And yes, since the volumes then will be lower, you will have to buy yourself in on the shelves.
The positioning in these retail chains will not provide you a lot of turnover, but it will provide you with credibility. If you product is in OLE, then it must be good. And in the Chinese market, that is very much based on references and hearsay, this is essential.
Step 4. Slowly down the line
One your product is positioned, and you have generated some volume, got some word of mouth, it is time to enlarge the volumes. The next set of supermarkets to approach are the high-end chains: Sam’s Club, Taste, Great, Treat, Bravo. Here you may have do discount a bit on your original price, do some promotions, and you will get a better feel of the market.
It is also the moment to review your physical distribution and to make choices where in China you want to be active.
Step 5. To the mass
Just keep in mind that China has over 5 times the population of the United States. Buying power may be less, but still it is a huge and developing market. This allows for a whole range of supermarket chains. This is the top-10:
- Haihang Commercial(海航集团)
With each of these supermarket chains you will have to negotiate and find your place. You most likely will have to pay listing fees, but given the fact that you have gone through step 3 and 4 you already should be able to predict the take-up of your product.
In parallel: online
There is a considerable number of online stores as well, but the list is dominated by Tmall and JD.com.
- Tmall(Alibaba) 50%
- JD.com 30%
- Amazon China
- 51nuy(YiXuan/Wechat owner)
Having your product in one or more of these stores may look nice, but you will need promotion to become visible. You can buy favourable spots on these websites, but you can also use social media to promote you product further. In Chinese of course, and in the Chinese way.
How to get started?
Alliance experts can help you with the first steps into the huge China market. We understand that as long as volumes are still low, you will not open an office in China. We can act as your local representative and country manager, in close collaboration with your export manager.
For step 1 and 2 we can do market research and give you advice on your brand positioning. From step 3 our activities will really kick-off, making use of our extensive network with supermarket purchasing managers.
We work with a team of people Tianjin and Hongkong, both big cities with many international connections. The communication is facilitated by one of our colleagues who lives in or near your base country and who speaks your language. Our service fees start from around 10,000 EUR, depending on what you want and how often you will need us.