Direct sourcing is central to Pagoda’s procurement plans for imported fresh produce.
The Chinese fruit retailer revealed 30 per cent of its imported products would come directly from overseas production bases in 2017, up from 15 per cent in 2016. Around 60 per cent of imported fruit will come directly from overseas bases by 2020, according to Pagoda’s forecasts.
“It has simplified the procurement procedures, reduced costs to lower prices, and ensured the quality of fruits to the greatest degree through seamless information docking and a high level of sales and procurement collaboration,” Pagoda explained in a release.
The head of Pagoda's international procurement business department, Peter Zhu, has been a driving force behind the direct sourcing push, visiting over 20 countries in the past two years.
The retailer now has direct sourcing arrangements in place in 22 overseas locations, including the US (cherries), Peru (grapes) and Mexico (avocados).
Zhu said sourcing directly from producers was not without its challenges, with Pagoda committed to meeting its overseas output standards.
"The major difficulty of direct procurement from overseas bases lies in output standards", said Zhu. "No matter if it's collecting 90 per cent naturally ripened durians or purchasing cherry plums.”
Pagoda held its global supplier meeting at the SkyCity Marriott Hotel in Hong Kong last week, alongside Asia Fruit Logistica. Over 200 representatives of leading companies from across the globe were in attendance.