Asian & Middle-East Market Opportunities

Asian & Middle-East market opportunities

by Pierre Escodo, editor of EUROFRESH DISTRIBUTION magazine

PREMIUM PRODUCE, A RISING DEMAND IN THE GULF by DANUBE SUPERMARKETS head of procurement, Ahmed Ali

RAISING STANDARDS AND DRIVING NEW CUSTOMERS IN THE UAE by ELITE AGRO VP sales, James Varghese

INDIAN MARKET REALITY AND OPPORTUNITIES by Suri Agro Fresh Jt. Managing Director, Hitin Suri

MARKET ACCESS, THE NEXT DOORS TO BE OPENED by CSO market expert, Simona Rubbi

CHINA RETAIL, PRIORITY AND GROWTH WITH IMPORTED BRANDS by CR VANGUARD head of perishables procurement, Mike Li

MARKETING STRATEGY FOR ONLINE & OFFLINE IN CHINA by FRUTACLOUD CEO George Liu

ONLINE & OFFLINE, NEW RETAIL PHENOMENON IN CHINA by HEMA SUPERMARKET (ALIBABA) head of procurement, Paul Sheh

OMNICHANNEL SOLUTIONS & HOW TO TAKE ADVANTAGE OF THE KOLs by ARCTIC SOLUTIONS CEO Bjorn vd Veen Asian & Middle-East markets

0. Global perspectives

1. Middle East 2. Apple, grape and kiwi demand in Asia 3. China

4. Japan

5. Singapore

6. Malaysia

7. South Korea

1. Demand for fresh food continues upstream 2. Continuous urbanization (to double

within 15 years, +250 millions) 3. Growing middle-class 4. Rising per Capita income (2017 forecasts : Middle-Eastern GDP: +2,9%, South Asia : +7%) 5. Innovative business

by Pierre Escodo, editor of EUROFRESH DISTRIBUTION magazine

3. A US$10 Billions F&V market in the Gulf, 50% in the UAE

. €100,000 millions modernizing the market (coldstorage, infrastructure, cooled buildings)

. 5,500 licenced companies, a model for the region

. Adopting food standards, global player

. Greater transparency, inspiring on Australia and Holland

. Proximity with the port, future electric trucs

Strong demand in Asia: +24%

Evolution of apples imports in South East Asia, 20015vs2016

300000 2015 250000 2016

200000

Tons 150000

100000

50000

140000

120000

100000

80000

60000

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0 China HK India Japan Korea Taipei Singapore Thailand

. In 2016, China imported €21.54 million, Taiwan €12.35 million, Hong Kong €3.6, India €2,3 million, Singapore €1,8 million and South Korea €1.3 million

EU kiwi : top-importing countries in Asia 25.000.000 20.000.000 15.000.000 10.000.000 5.000.000 0

New Zealand Chile Italy Greece

300.000 . Origins: Chile 31%, USA 18%, Peru 16% and Australia 14% 250.000

200.000

150.000

100.000

50.000

0 China HK Japan Korea Thailand

. In 2016, HK imported €1,5 million, India € 704,364, Malaysia €435,613 and Singapore €397,915.

EU stone fruits: top-importing countries in Asia

1.800.000

1.600.000

1.400.000

1.200.000

1.000.000

800.000

600.000

400.000

200.000

0 HONG INDIA MALAYSIA SINGAPORE KONG

. In 2016, China imported €22.83 million, Taiwan €12.35 million, Hong Kong €4.38 million, Singapore €3.17 million, Malaysia € 1.8, South Korea €1.34 million and Indonesia €1.19 million.

EU berries : top-importer in South East Asia 25.000.000

20.000.000

15.000.000

10.000.000

5.000.000

0 CHINA HONG SINGAPORE TAIWAN KONG

. 1,4 billion people in 2016

. “In 2016, China surpassed the US to become the world’s largest retail market with total sales of $4.886 trillion, compared with $4.823 trillion in the US” Source: eMarketer’s retail forecast

. 42% Fresh produce in food expenses : 14% of capita consumption in fresh fruits and 28% of capita consumption in fresh vegetables.

Fresh food sales 40% consumers experienced fresh food online

High potential Low Internet penetration rate in China (52%) Many promotional campaigns & services offered: delivery, payment facility, credit, …

International Share Others

1. Wal-Mart 6,4% Carrefour 2. China Resources NC RT-Mart Vanguard 3. Yonghui 3.6% Lianhua 4. Sun-Art 0.3% Haihang Group Bubugao Wumart AEON China

Number of . Specialized fruit stores (as Types outlets Pagoda, Zianfeng) are competing with the Online Hypermarket 9,481 fruit platforms (fruitday.com, Supermarket 33,202 Yiguo.com, JD.com, …) Department store 4,689 . Biggest retailers are in the top 4 mega cities : Shenzhen, Convenience store 16,832 Guangzhou, Shanghai, Warehouse club 108 Beijing. Specialty store 108,809 Discount store 577 CHINA 2nd China fruit chain Hangzhou Qunfeng . Since 2004

. 1100 stores, annual turnover US $300 million.

. O2O model (online to offline), highly professional fruit brand operators.

. 5 major brands : Fruit Wharf for wholesale and distributors, XianFeng Fruit Co. and Mr. K Fruit for end consumers, Yang Guopu for dried fruit, Fruit Terminals for fresh cut fruit.

2017: FRESH FRUIT IMPORTS REMAIN STABLE

. Fresh fruits imports in Japan reached 81,756,905 ¥ in January 2017

. Banana : +30-40% in total imports since 2012

. Banana : 60% of total fresh fruits imports

100000 90000 80000 70000 60000 50000

40000

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0 April 2016 July 2016 sept-16 nov-16 January 2017

% sales JAPAN Retailers Food sales with food AEON $1,07 billion 49% ITO-YOKADO $601,672 Highly concentrated Retail sector million UNY $501,236 66% million LIFE $518,178 66% million

JAPAN

. June 2016: AEON launched BIO C’BON organic food chain in Tokyo, in partnership with France’s Marne & Finance Europe (CARREFOUR group)

. « AEON aims to see organic foods become a popular part of daily meals – instead of being ‘special’ line – by priority to customer satisfaction and sustainable business growth.”

MATURE RETAIL SECTOR

. $1,3 Billion retail sales of Singapore retail in 2015

. $2,3 Billion proyected Retail sales by 2025

Retailers Nb Share outlets % NTUC Fare Price 100 33% Dairy Farm Int 123 10% Holdings Sheng Siang 38 9,3% Supermarkets

Retailers Number of outlet Village Grocer 8 Jaya Grocer 20 Big Group RHD 34 MBG Shop Isetan Japan GCH Retail Dairy Farm

. South African apples represent more than half of imported volume.

. Top categories : Gala and Granny

Imported apples in Malaysia by origin, 2016

South Africa China USA NZ France

Distribution : One of the most developed in South East Asia Retailers Turnover . E-Mart Forecast 2017 2018 : total retail sales $1,2 billion reached $529,91 billion. (+6,13%) Central Food Retail Co. . E-commerce on the rise : e- Lotte retail sales accounted for Eland 11.2% of all retail sales in Costco Wholesale South Korea, this figure is expected to reach 14.7% in KACM 2019. Mega Mart . Fresh fruits imports reached 863,660 tons in 2016 (615,680 tons in 2015)

SOUTH KOREA Apples & pears on the rise . Total fruit consumption in 66,5 kg/year (+8%)

70 . Strong evolution of pear 60 (+77%) and apple (+19%) 50 consumption over the last 3 40 years.

0 Total Apple Pears Grapes 2013 2014 2015

. Thailand retail includes both wholesale, Retailers Nb of outlet retail & R&C. Makro Cash & Carry . Big C : 150 hypermarkets, 160 Central Food Retail Co. 6 chains supermarkets, 400 shops Tesco 400 The Mall . Central Food Retail Co. is a distribution holding with 6 under-brands : Central Villa Market ( High value) 33 Food Hall, Tops Markets, Tops Big C 710 Superstore, Superoom, Tops Daily, Eathai.

. Still high import duties +10%

Grapes nº1 imported fruit

. $525 million imported fruit in 2016.

. Top imported fruits : Grapes, oranges, strawberries and apples.

US China Malaysia Australia

$431 Million Vegetables imports

Malaysia China Australia Thailand US Pierre Escodo, editor [email protected] Thank You! www.eurofresh-distribution.com mobile +34.661.324.134 @EUROFRESHD