The likes of Driscoll’s and Zespri look to second- and third-tier cities for growth
Top fruit companies have identified second- and third-tier cities in China the pathway to further growth in Asia’s largest market.
According to a report from China Daily, Zespri and Driscoll’s believe rising health awareness, growing disposable incomes and evolving retail ecosystems all position the lower-tier cities for growth.
Driscoll’s has partnered with popular streaming shows to strengthen its presence in these regions. It has collaborated with the iQiyi reality series Let’s Farm, which follows 10 young participants each season as they operate a real farm, sell products via livestreaming and interact with consumers.
“The show’s audience is mainly young people aged 18 to 25 in smaller cities, making it a perfect platform for us to build brand familiarity and trial,” said Henry Yoon, marketing director of Driscoll’s China told China Daily.
“In the past two years, our sales growth rate in lower-tier cities has outpaced that of first-tier cities,” he said.
“People in top cities like Shanghai or Beijing face more pressure and are more price-sensitive. But in second and third-tier cities, malls and premium retailers like Hema are bustling. That’s where we’re placing our strategic bets.”
Leo Li, e-commerce manager of Zespri, said the kiwifruit marketer’s ’widen and deepen’ strategy aims to increase outlet numbers within existing cities while entering new urban centres.
“Cities below the second-tier level, starting from third-tier cities, represent a vital frontier for our mid to high-end positioning,” said Leo Li, e-commerce manager of Zespri, a New Zealand-based kiwi fruit brand,” said Li.
“The rise of livestreaming and the relatively untapped purchasing power in these cities are driving our decision to go deeper.
“If a city used to have 100 retail points for our kiwi fruit, we aim to increase that to 150 or more. Though we imported 1.4bn kiwifruits into China last year — one for every citizen — the actual household penetration rate is still far lower. That’s why market penetration remains a key growth driver for us.”
