As the largest country in the world today, "China is the economic powerhouse of Asia," according to Alexandra Zhen, senior research manager of Ipsos China. After all, with a GDP of 90 trillion RMB (equivalent to US$12.2 trillion) in 2018, the nation is still growing economically. Yet, with this type of expansion, she emphasizes that "consumers are becoming much more wealthy and sophisticated and demanding as well."

Speaking on the matter during a session on the Chinese market at the Global Cherry Summit in Chile last month, she adds that, for them, "It's not about what is cheaper, it's about more value for money and making sure I'm getting what is worth my money."

Recognizing these consumer desires could be incredibly valuable to the produce industry. According to Liu Zhi, general manager of Dalian YIDU Group, the total amount of fruit imports by volume in China in 2018 was more than threefold the value of what it was in 2009. Of these imports, the cherry is currently the number one category in terms of value.

Zhen notes that, when consumers shop for cherries, they primarily care about freshness, quality, appearance, and shape. As of this year, locals, who are becoming more educated about the category, consider variety a "significant" factor when buying cherries as well.

However, cherries have also come to represent much more to the Asian society. "Cherries are seen as a premium fruit, a symbol of love, and as healthy and nutritious," she explains.

These associations are linked with the idea of 'cherry freedom,' a financial concept with "grassroots beginnings." Speaking on the idea, Zhen elaborates: "It came from the consumers, and basically, to have cherry freedom means I can afford to buy any cherries whenever I want. So, it actually is an indicator of the consumers' wealth status."

To Zhen, this view is tied to future opportunities for those in the cherry industry as well as for those in other fruit businesses: "As the consumption upgrade continues, there will be an increasing market for premium fruits," she says.

China embraces 'new retail' with diversified store models

For cherry companies striving to find success in the Chinese market, understanding the dynamic country's overall retail landscape, as well as the new formats emerging there, could be key, say speakers at last month's Global Cherry Summit.

According to Patti Sun, CEO of Daymon Worldwide China, those in the industry should be familiar with "the two sides of the game" - these two sides being the Chinese multinational conglomerate Alibaba Group and internet-based technology enterprise Tencent.

As two of the biggest forces in the Chinese market, the companies each operate through e-commerce as well as brick and mortar stores, explains Sun.

In fact, unifying physical and online stores has become a trend in the country, notes Daniel Ho, product director of Xianfeng Fruit supermarkets. He adds that, by following this trend, companies aim to improve the efficiency of buying and selling as well as the shopping experience as a whole.

To Ho, this is a mark of the age of 'new retail'. Describing this idea, Ho comments: "The new retail is mainly focused on the customer service as supported by online business in addition to physical stores." This, he adds is driven by big data, AI and supported by efficient logistics and mobile payments.

Such developments have resulted in a greater focus on online to offline commerce (O2O). "One trend we're really seeing is integration," says Sun. She comments that this has led to the rise of scan-and-go stores, such as Tencent's Wal-Mart.

With online delivery especially taking off, Sun reveals that four key O2O delivery service apps in the nation are JD.com, Tencent, Meituan.com, and Wu-mart.

"Fruit chain stores with O2O models are getting more and more popular as they meet the changing needs from the final customers, especially the young generations," adds Ho.

As far as traditional brick and mortar stores, Sun says that a few that continue to fare well include Auchan, Vanguard, Walmart, Yonghui, and Carrefour.

She emphasizes that Yonghui is still opening up new stores and, out of the four, is the only one seeing positive growth in each of three categories: the number of shoppers, the value of products they bought, and the frequency of their trips.

For companies looking to work with such conventional stores, Sun points out: "Every region has different players, so you really need to know who to focus on which region."

For example, while she asserts that Sunart is the number one retailer in the northern and eastern regions, Yonghui dominates the western region and Walmart is most dominant in the south of the country.

Still, beyond such retailers, many produce companies are hoping to reach a broader range of customers through expansion with diversified formats.

Sun explains that Ali group's HEMA, for instance, has stores with on-site products, in addition to a corresponding online platform; a HEMA vegetable market, set up similarly to a wet market; a HEMA MINI shop, which is a smaller format of the HEMA vegetable market and located in the countryside; and the HEMA F2, which is a convenient store format that is focused on the fresh category.

Other new retail models include advertising fresh fruit through live-streaming platforms, says Ho.

In this type of format, advertisers "go to the farms, take a video, and talk about what's happening here. After that, they put down a QR code so the consumer can just scan that to go to a platform to buy the fruit", he remarks.

TikTok is also becoming an unexpected but popular way to advertise fruit. On it, Ho notes that people "make promotions, share information, and then make business happen.

Considering these developments, he says "Conventional supermarkets are facing a big challenge from new retail players, but they are trying to find partners with online experiences to fit the trend."

In regard to the next moves for the cherry industry, Ho says: "According to our statistics, 90% of the cherries are bought by the young generation - people aged 25-40 - So, I think the retailer needs to focus on this group."

He suggests that companies could use special marketing teams and also provide "special offers", such as a buy-one-get-one-free promotion, to target the main demographic that buys cherries, arguing that to increase the consumption of cherries, you need to reach these "target customers."

As cherry sales in China are often "gift-driven", Zhen adds that, to boost consumption in the future, those in the industry increase the number of occasions Chinese locals associate with cherries.

Sun provides a further perspective: "If you really want to generate consumption, no matter whether you're online or offline, we will need to penetrate [the market] more."

Though there are a number of progressive ways in which companies are attempting to do this, "It's still not clear which type of model will be successful in China," Liu contributes - as such, only time will tell which of the diverse formats prove to be most effective.