A special promotion by the U.S. Department of Agriculture’s Agricultural Trade Office Shanghai and Tmall.com, China’s most popular B2C online shopping website, has shed new light on a market segment for ecommerce that could prove game-changing for U.S. to China sales. Two pre-sale campaigns this summer tested demand in China for US grown cherries, and the results showed that Chinese online shoppers are big fans of U.S. agriculture.
According to a statement from Alibaba Group, the parent company of a group of online businesses, including Tmall, the first pre-sale cherry promotion (which ran June 26-July 11), resulted in 110 tons of cherries sold through Tmall. In addition:
– Tmall hosted a second cherry pre-sale and set the limit to 30,000 cherry orders—about 60 tons. It sold out in three days.
– Chinese consumers were able to get the cherries even faster than the majority of U.S. consumers. It takes just 48 to 72 hours for the cherries to leave American trees and get into the hands of Chinese consumers.
– During the first promotion time frame, Tmall sold 11% of all US cherries exported to China. The combined sales of Tmall’s first and second promotions beat the total cherry import volume of three Southeast Asian countries combined (Malaysia, Singapore and Thailand).
The cherry promotion is part of Tmall’s pre-sale experiment that helps U.S. businesses gauge Chinese consumer interests before the products are shipped. In the pre-order system, users pay a small deposit on a selected item for later delivery. In this case, cherries were being pre-sold before they were even picked. This allows U.S. companies to calculate consumer demand and ship only products that are ordered. The process creates greater efficiency and large cost savings all around.
Apparently U.S. food products are red hot in China, where consumers are increasingly turning to e-commerce to access foods from the U.S. amid concerns over food safety in their home country. Tmall has seen a 500% surge in sales of imported food in the first half of 2013, said Alibaba. According to the U.S. Department of Commerce, agricultural exports from the U.S. to China reached $26 billion in 2012, up 38% from 2011.