An important number of Chinese wholesalers are not directly importing from foreign exporters but get their fruit from other importers and re-sell it in the market in exchange for a commission. Xingwan Fruits, a professional wholesaler with stores in 6 wholesale markets, had worked in this way since its establishment. But not long ago, the company started to change its approach, looking for opportunities by directly cooperating with suppliers from the fruit’s country of origin. Mr. Tomas Eduardo Nuñez Mendez is the Global purchaser of Xingwan Fruits. He shared with us his insights into the changes and trends he sees in the market.
Chinese visitors at the Chilean orchard
Difficult for new importers to find good suppliers
Chile has made immense investments, increased its production volume, and upgraded both post-harvest technology and processing facilities to attract increased attention from Chinese importers. Chile has become one of the main source markets of Xingwan Fruits. Tomas has recently been very busy helping the company reach qualified Chilean stone fruit and grape suppliers, and now he's started preparations for the coming cherry season.
“Of course, there are many qualified exporters in Chile, but sometimes it is not easy to come to a deal in the end.” Tomas told us, “This is two-way communication. Take the cherry sector as an example, the local cherry business has been well-established for many years. Some big players have already consolidated strong relationships with their clients in China. For export, they prefer to work with long-existing Chinese importers that they are familiar with. New importers must be able to differentiate themselves to make suppliers want to cooperate with them. On the other hand, it is also vital for importers to get to know the suppliers’ trustworthiness over a long distance, especially when dealing with perishable products.”
“For new participants like us, it might be difficult to get to know and evaluate suppliers in a short period. That is why Xingwan Fruits has dispatched me to production areas in the fruit’s country of origin, to help the company in reaching out to more potential suppliers, and smooth out communications.”
Exporters prefer to work with Chinese importers with multiple stores
With the increased volume, some exporters start to worry that overload of products can spoil their price level in the same market, it becomes a trend that supplier’s prefer to work with local importers with multiple stores.
“Take cherries as an example, light colored cherries are easily sold in big volumes in north China, while the consumers in south China prefer premium sized fruits. As market preferences vary, suppliers with multiple stores allow us to achieve quicker sales with better returns. Premium or super premium sized products are sold in smaller quantities in 2nd tier markets, but the price can be 10-20 RMB [1.50-3.00 USD] higher than the price in Shanghai (1st tier market). In addition, if the main market is oversaturated, importers can easily distribute the fruits to surrounding markets and sell them at a better price.” Tomas said. “Furthermore, the logistics cost can be quite high for perishable fruits. When operating directly without intermediary parties, fruit quality and freshness can be better guaranteed.”
Given these reasons, Xingwan Fruits opened 6 stores not only in the 1st tier market but also in the 2nd tier markets. “Often we sell half of the container in our stores in Shanghai, and the rest to stores in surrounding 2nd tier markets (Jiaxing, Wuxi, Nanjing, Zhengzhou, Gaobeidian-Beijing). We hope not only to bring the superior South American fruits to more local consumers, but also to help suppliers make their products more reachable and help them to increase brand awareness.”
Direct import improves company’s development
Xingwan Fruits used to purchase fruits from local importers and resell them in its stores. Only 4 years ago, the company started direct import. “It was not easy in the beginning, as we not only had to spend effort in reaching out to qualified suppliers, but some companies that we purchased fruit from became our competitors, which resulted in a sales drop. But we are working to overcome these difficulties. The company is steadily developing, and now 40%-50% of our products are from direct import, and our goal is to reach 80%. Of course, direct import brings higher risk and more challenges, but on the other hand, it improves the company’s growth. We are proud to say that Xingwan Fruits is now not only a Chinese importer, but has also a recognizable brand for foreign suppliers who seek to improve the awareness of their products in China."
Xingwan Fruits imports multiple types of fruits including cherries, grapes, sugarplums, nectarines, kiwis, and avocado. The company is looking for more fruit suppliers to cooperate with during most of the year.
More information:
Tomas Eduardo Nuñez Mendez
Shanghai Xingwan Fruits
Phone: +56 998584670
Whatsapp: +56 983561469
Wechat: tmklcb25
Email: tomas@xwfruits.com
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October 26, 2020 at 08:07PM
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