A coalition of brands has pooled resources to increase recognition in China, writes Tim McCready.
A coalition of 18 top New Zealand food and beverage exporters has been brought together with support from government agency New Zealand Trade & Enterprise (NZTE), to propel New Zealand's leading brands to consumers in China.
The coalition, known as the NZ Food Basket, promotes over 200 different products — from leading New Zealand exporters across meat, seafood, produce, dairy, cereal, spreads and beverage — on Alibaba's Tmall e-commerce platform.
Alibaba is the world's largest retail e-commerce company, and its Tmall platform is China's largest online marketplace — which the company says has over 600 million users. This initiative makes New Zealand the first country to open its own flagship store on the platform.
Tmall's enormous reach in China — including to a rapidly increasing number of consumers outside the top-tier regions — makes it one of the preferred gateways into the China market for foreign brands.
The initiative came about when the companies involved noted they shared many of the same challenges in China — including cost, complexity, language barriers and a lack of local e-commerce expertise — and could be a lot stronger if they pooled their collective knowledge and worked together.
At the signing ceremony for the initiative earlier this year, Alibaba's managing director for Australia and New Zealand, Maggie Zhou, said increasing the brands' recognition in China would help participating New Zealand companies gain greater influence over the positioning, pricing and distribution of their products.
"Together, we want to help these brands deepen their engagement with the Chinese consumer, so shoppers in China can gain a greater appreciation of the premium high-quality products that New Zealand offers," she said.
Alibaba's New Zealand Country Manager, Pier Smulders, has been the primary lead for Alibaba on the NZ Food Basket initiative.
He says: "New Zealand carries a strong country image for high-quality and safe food products. Alibaba Group is delighted to be partnering with the New Zealand Food Basket to showcase a range of unique Kiwi brands on our Tmall platform.
"This is an exciting opportunity for New Zealand brands to engage directly with Chinese consumers and is an outcome of our working relationship with New Zealand Trade & Enterprise."
Nicola O'Rourke, chair of the initiative, says the Food Basket provides an opportunity for New Zealand brands to capture sales revenue and consumer insights with the direct B2C model. It provides greater ability to control pricing, build brand awareness, establish a direct relationship with consumers and access sales data.
"It will significantly improve our reach and shorten the supply chain in a way that each brand couldn't achieve alone," she says.
NZ Food Basket says the goal for its first year is to focus on implementing and improving the business model, establishing good governance and management, growing the membership of companies in the initiative, building brand awareness and gaining visibility in a crowded e-commerce market.
It is already seeing early conversion rate success from site traffic, with the average purchase price on the site around 200 renminbi (NZ$43) and average units per purchase at 2.5-3 units across brands.
"This is hugely encouraging as it indicates the concept of the Food Basket is working, and consumers are being exposed to multiple brands and products from New Zealand when visiting the site," says O'Rourke.
In the second and third year, the Food Basket plans to focus on targeted investment in on-and-off-platform marketing activities to drive sales growth.
These will include livestreaming events, the use of key opinion leaders (influencers), domestic campaigns targeting New Zealand-based Chinese and inbound tourists, Tmall platform campaigns, and promotion through social media platforms, websites and Chinese festivals.
O'Rourke says the collaborative nature of the project means brands can be cross-promoted, generating exposure across products on offer.
"We are pleased to see the benefit of the store with 1200 units of one product sold out in two minutes versus normal sales of 200 units per month, following a promotion involving a key opinion leader," she says.
"Even more significant is the benefit the rest of the brands that are live on the store received from the promotion of this one brand, with another supplier selling 100 units purely to consumers who came to the store for the promoted product and discovered another brand sitting alongside."
O'Rourke says though it is still early days, "these results show the power of bundling premium New Zealand products together and leveraging the marketing of all the brands to drive traffic to the store for the benefit of all."
Who is in the New Zealand Food Basket?
• Lewis Road Creamery
• New Zealand Wild Catch
• Sealord Group
• Picot Productions Ltd
• Shott Beverages
• Fonterra Brands NZ
• Oha Honey Limited Partnership
• Landcorp Farming
• Zespri Shanghai
• Fiordland Lobster Co.
• Smartfoods (Vogel's Muesli)
• Alliance Group
• Babich Wines
• Cherri Global
• Future Cuisine
• Zealong Tea Estate
• Rockit Global.