Brands helping growth at Walmart China
Walmart is so far the only international retail chain operating in China with its own nationwide logistics centre for perishables. “All the fruit and vegetable distribution today is centralised from our 11 platforms,” said Vincent Yeh, head of perishables procurement at Walmart China.
The depots are located at Shenzhen, Guangzhou, Shanghai, Beijing, Wuhan, Chengdu, Kunming, Xiamen, Shengyang, Taiyuan and Hangzhou. Walmart China is today busy building an international supply chain to directly source most of its imported fruit.
So far in the first semester, about 20% of the imported fruit sold in the shops has been directly sourced by the Walmart department. This represents about 200 containers of overseas fruit (like apples, citrus, pears, grapes, cherries and blueberries) and 1,000 units of tropical fruit from South East Asia (mainly bananas, dragon fruit, durians and pineapples). Imported fruit today represents 45-50% of all the fruit sold by the shops. “We believe we can still have larger sales of imported fruit, since it is helping us to differentiate us as an international chain,” Yeh said.
Citrus and durian the most popular in 2015
Citrus is the largest imported category, taking up about 40% of the directly sourced volumes, followed by apples (25%) and pears (5%). Citrus procurement at Walmart has more than doubled since October 2014, when the US was again given access to Chinese markets. Durians became the fastest growing item in 2015 (all sourced from Thailand). “It is increasingly popular this year due to its health benefits: it is considered a warm or energetic fruit, recommended for women and babies,” Yeh said.
Due to the same health trends, lemons were the fastest growing imported fruit in 2014. It is very popular for its antioxidant properties and benefits for the skin. Avocados and blueberries keep increasing in popularity too, for similar health reasons. Spain has appeared on the market with lemons and oranges, able to supply over a long period, though South Africa is the top source for citrus, between May and September, followed by Egypt, Spain (with late oranges between February and June) and Australia (between May and September).
Produce brands helping to sell
“In future we hope to sell more branded items, even well-known European brands. This is our next step towards quality,” Yeh said.
So far among the most famous brands sold there is Dole, Zespri and Sunkist. “Last year we started with Pink Lady, Blue Whale and Oscar; Truval is also one of our growing brands.” Fuji apples remain by far the best-selling variety in China , representing 90% of the volumes. The remaining 10% are Galas and Red Delicious. Imported varieties represent 30% of the total sales of apples at Walmart, mainly with Gala, Red Delicious and a few varieties from New Zealand (Rose and Queen). The main sources are Chile, New Zealand, the US and France. Stone fruit and grapes are also a future growth category according to Vincent. So far, cherries represent more than 90% of the stone fruit imported, with plums second with just 5%. The potential demand is there for other products like apricots, peaches, nectarines and flat fruit.
PE