How Do Imported Supermarkets Choose Products after Entering the E-Commerce Platform In China?

A few years ago, imported milk powder was in great demand in China, especially in Australia. Mothers tried every means to bring it back from abroad through friends or "purchasing on behalf of others". After the emergence of cross-border e-commerce, everyone can buy imported milk powder with a full range of products and a wealth of resources.


For the first time, import supermarkets are made aware of the business opportunities of cross-border e-commerce platforms. It was the Double Eleven in 2015.


At that time, Costco, an American membership supermarket, broke the turnover of 20 million RMB in the opening hour of Tmall International and finally sold more than 200 tons of Kirkland nuts and 180 tons of dried cranberries, almost emptying Costco's stock. After seeing Costco reap the benefits, supermarkets such as Germany's Metro, Aldi (Orozzi), US's Wal-Mart, Shan Mu members, Australia's Woolworths, and South Korea's discount supermarket E-mart have all settled in major domestic e-commerce platforms or opened online shopping malls alone, hoping to get a piece of the Chinese retail market.


Not long ago, Woolworths, Australia's largest local supermarket, officially launched its official website. In fact, as early as 2015, Woolworths' overseas flagship store entered Tmall International. Two years later, it opened a flagship store on Netease koala.


In 2017, German discount supermarkets Aldi (Olanzi) and Lidl (Lidl) successively entered Tmall International. Olanzi opened an overseas flagship store in March and then a flagship store in December.


Wal-Mart and Shan Mu member stores not only set up shopping apps, but also hold hands with JD.com to set up global flagship stores to enrich their categories through cross-border e-commerce. With the help of JD.com, Wal-Mart has developed into the most complete store with top-grade products on JD.com's global shopping platform.


Metro, which was the first to enter, is now mature and has opened up a two-store model in Tmall International, setting up official overseas flagship stores and official China flagship stores respectively.


The two stores have different product categories.


The overseas flagship stores are imported through cross-border e-commerce and, based on the advantages of global procurement, select products with high cost-performance ratio to Chinese consumers, ranging from snacks and drinks to home health care, to meet the growing consumer demand.


And its flagship store in China is the promotion front for Metro's own brand, mainly to attract younger online consumers.


In contrast, overseas flagship stores have more types of products than China's flagship stores, while bonded areas have certain category restrictions, and the two-store model is undoubtedly complementary. Costco immediately followed after seeing the advantages of the two-store model.


No matter which cross-border e-commerce platform they grew up on, in order to gain a foothold in the Chinese market, imported supermarkets must take the brand differentiation route.


How exactly is it done?


It mainly depends on the selection mode. When choosing products, the emphasis is different, and the difference between imported supermarkets is naturally reflected. Below we have chosen five imported supermarkets that have entered domestic e-commerce to see which products are most popular with Chinese consumers.


Costco (Costco) is the largest chain of membership-based storage stores in the United States. Since its establishment, Costco hopes to provide members with the best quality products at the lowest price.


Tmall big data shows that the majority of people who like to buy things in online import supermarkets are post-80s white-collar women in first-tier cities, and the popular products are mainly beauty makeup, clothing, health care products, red wine, mothers and babies, etc. As a result, Costco's only official flagship store overseas focuses on personal care and nutritional health care.


Before entering Tmall International, the team spent a lot of energy to understand the consumption habits of Chinese consumers. They found cranberries and kirkland nuts were the two products with the most purchasing frequency, so they chose them as the main products.


Kirkland is Costco's own brand. Costco's strategy is to promote proprietary brands, which can increase consumer stickiness and repurchase rate. After the Kirkland brand is recognized by Chinese consumers, Costco will launch other Kirkland products one after another.


Costco has done a comprehensive job in marketing and publicity. On the one hand, it is aimed at the group most likely to spend money in Costco-Chinese who have studied in the United States. During their stay in the United States, they contacted Costco and had a good reputation. International students are the best propagandists.


On the other hand, it is very good at making topics for itself. For example, this 2-meter-tall plush bear, because of its huge size, suddenly became a net red item. At the beginning of the opening of Tmall International, there was also the activity of giving a plush bear free of charge as much as it bought. At present, Costco's offline physical stores in China have not opened for a long time, and most of their efforts are focused on e-commerce operations.


Aldi is Germany's largest affordable supermarket chain. In 1946, the albrecht brothers opened a 100 square meter retail supermarket in Essen, Germany. Their ambition goes beyond this. At the beginning of the brand, both brothers wanted to open chain stores. More than half a century later, Aldi opened more than 10,000 stores in 20 countries with a total turnover of more than 50 billion euros.


Aldi supermarket has the advantage of "fair price and selection", which selects fair price and high quality goods for consumers. Through careful selection, continuous testing and experiments, we have built our own brand and provided high-quality products to consumers at the lowest price.


After entering Tmall International, Aldi has controlled about 700 kinds of commodities according to the original operation concept. Basically, there are only 1-2 kinds of choices for each kind of commodities. Competition among brands and reduction of enterprise management fees are used to drive down the prices of commodities. Finally, it accounts for more than 90% of the low-priced categories in Tmall's flagship store.


Aldi is Germany's largest affordable supermarket chain. In 1946, the albrecht brothers opened a 100 square meter retail supermarket in Essen, Germany. Their ambition goes beyond this. At the beginning of the brand, both brothers wanted to open chain stores. More than half a century later, Aldi opened more than 10,000 stores in 20 countries with a total turnover of more than 50 billion euros.


Aldi supermarket has the advantage of "fair price and selection", which selects fair price and high quality goods for consumers. Through careful selection, continuous testing and experiments, we have built our own brand to provide high-quality products to consumers at the lowest price.


After entering Tmall International, Aldi has controlled about 700 kinds of commodities according to the original operation concept. Basically, there are only 1-2 kinds of choices for each kind of commodities. Competition among brands and reduction of enterprise management fees are used to drive down the prices of commodities. Finally, it accounts for more than 90% of the low-priced categories in Tmall's flagship store.


Especially wine, The Drinks Business believes that Aldi will focus on selling wine because the Chinese market has a great demand for Australian wine.


From 2015 to now, China is Australia's largest alcohol export market. According to data analysis, China's spending on Australian wine reached 474 million Australian dollars in 2015, up 51%. From January to September 2016, Chinese wine imports from Australia increased by 19.06% year on year.


Zhang Zhiqiang, executive director of the International Private Brand Alliance, told "Retail with the Third Eye," that "Orozi plans to use Australia as a springboard to enter Asian retail markets including China. The reason why we have to bypass Australia is that Orozzi has already established a solid supplier base there. "


Therefore, compared with Aldi's proprietary brands, Australian products are closer to Chinese consumers and have high acceptance, which facilitates Aldi to enter the Chinese market. Moreover, Aldi has a very strong relationship with Australian suppliers, so there is no need to worry about supply chain, logistics and transportation.


Aldi is particularly careful in quality control and category selection, and the trial-and-eat process alone is very harsh.


If it is new food, it must go through at least 5 trials. However, those foods that have already been served have to be tried at least twice. If it does not pass, the company will ask the supplier to make improvement, otherwise it will stop cooperation directly.


Before choosing a product, they will screen products according to the preferences of Chinese consumers and look for good-looking packaging designs, which is also one of the reasons why many consumers like to shop in Aldi supermarket.


Aldi Orochi China CEO Vicker once said in an interview: "From the farm to the storage, and finally to the consumer's hands, every link in the chain has to control the quality. And then make sure to give consumers the best products they want. "


Metro should be familiar to everyone. It entered China as early as 1996. Up to now, 93 stores have been opened in 58 cities across the country.


On September 8, 2015, Alibaba Group and Metro announced an exclusive strategic cooperation. Metro's official flagship store will be located in Tmall International. Its advantage is that Tmall International Platform can attract young consumers and has huge traffic, especially during online shopping festivals such as Double Eleven and 618.


In the selection of products, Metro obtains the general demand range of consumers according to Tmall's international consumer demand and big data analysis before making global purchases.


When entering Tmall, Metro's main product was imported liquid milk, especially its own brand AKA milk. It is a liquid UHT milk (ultra high temperature sterilized milk) with 3.5% milk fat content, and it is produced on the exclusive farm in western Europe. Metro, based on its understanding of China's dairy market, has a high demand for cheap and fine imported liquid milk in the country, so it started to promote this kind of liquid milk.


On the 11th of 2017, Metro Tmall Store sold 2.35 million litres of imported milk, 22% of the milk sold on the entire Tmall platform.


Later, based on the iteration of Tmall's international consumers' demand for imported goods, Metro pushed for products such as wine, mother and infant, nutrition and health care and kitchen utensils according to its global purchasing advantages.


It is understood that French net red cookware Tefu cookware, German Atami milk powder, Chilean red wine, Japanese Unimat series, meal replacement powder, barley juice, children's lactic acid bacteria calcium tablets and so on are all products with good sales in overseas flagship stores at present.


However, it is worth paying attention to that Metro brand is complete, but it has not yet set foot in the fresh field.


Woolworths' overseas flagship store on Tmall is very different from other imported supermarkets. It focuses on Australian products and advocates a healthy lifestyle.


Woolworths opened its first store in Sydney in 1924 and has now developed into a supermarket chain group with 3,600 stores and is also Australia's largest retailer. This is exactly what founder CEO Percy Christmas said: "every city needs a Woolworths, no matter who, everyone needs a place of high quality and low price to shop."


Forty years later, Woolworths set up a quality assurance laboratory to ensure the quality of its products. Before they were put on the shelves, they had to be tested by analysts.


Subsequently, Woolworths developed its own brand products, the purpose of which is still to improve people's health. Most of the products are low-fat, low-sugar, low-salt foods, and are rich in calcium and vitamins.


Although Woolworths' overseas flagship store has obvious local characteristics, its overall advantages are not as obvious as those of offline stores in Australia, because it does not provide fresh fruits and vegetables from Australia. The largest category is healthy and pure natural products such as milk powder, vegetarian oatmeal and skin care products. These products can also be bought in other imported supermarkets. There is no advantage in the choice of products.


Woolworths products also have no price advantage. Metro is cheaper than Woolworths for the same milk powder. Overall, Woolworths is still in the development stage.


Members of Shan Mu in the United States are Wal-Mart's high-end membership stores, selling products in large packages. Compared with large families with a large population in the United States, this sales mode is relatively wasteful for small Chinese families, so Shan Mu member stores have been lukewarm in China.


On the selection, the head of the Shanghai marketing department of the Shan Mu member store said: "The priority must be the quality, especially the fresh one."


Shan Mu members have set up overseas flagship stores and flagship stores in Jingdong's e-commerce platform respectively. After opening up e-commerce, the fresh food of Shan Mu members sold very well. In 2012, Shan Mu member online stores launched fresh food in first-tier cities one after another, and provided online shopping services that delivered two servings a day and orders in the morning.


In this way, you can buy fresh fruits and vegetables, meat and frozen products without leaving home. Does this mean that imported supermarkets are quietly replacing the function of vegetable markets?


Imported supermarkets have developed from offline physical stores to online e-commerce mode, opening a new retail mode. At present, there are more or less some differences between imported supermarkets, and the advantages and disadvantages are obvious.


In the field of China's retail industry, imported supermarkets will also be impacted by domestic boutique supermarkets and competition will become more intense. As for the future development, let's wait and see.


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