Asiafruit Magazine recently shared with their readers a conversation with the head of our Vanguard Shanghai office, Timothy Li. Here is a look at that article and discussion that covered several topics around the state of our industry in China.

今年上半年上海为首多地封城或收紧管控期间，对贵公司业务带来了怎样的损失和主要影响？您看到整个产业链和果蔬市场上产生了哪些主要影响？

In the first half of this year, Shanghai and many other cities were locked down and tightening quarantine control. What are the losses and major impacts on your business? What major impacts have you seen on the whole industrial chain and the fruit and vegetable market?

Timothy:

上海封控期間, 我認為我司受到的影響和整個產業的從業者是一致的, 主要影響在貨物流通和清關上的延誤, 對新鮮果蔬質量上有負面影響。雖然上海港口沒有完全停頓, 但防疫要求下, 只允許持有通行証的車輛可以通行, 而且通往上海外地各高速口都設置檢查站嚴格防控, 司機的生活起居也只能封閉在車廂中, 更甚的是, 各地對有上海旅居史的車輛防疲政策不一, 某些地方甚至要求司機就地隔離最少7天, 逼使外地司機抗拒到上海提貨, 運力嚴重短缺, 使大量貨櫃滯留在港口, 對貨架期短的產品例如提子、牛油果等質量有負面影響。由此催生物流運費大幅上漲、貨櫃的超期費用等, 給各進口、批發商嚴重增加經營壓力。

During the period of the Shanghai lock down, I think the impact on our company has been the same as others in the whole industry. It has been mainly the delay in cargo circulation and customs clearance, and it has had a negative impact on the quality of fresh fruits and vegetables. Even though the Shanghai port did not completely stop, under the requirements of epidemic prevention, only vehicles with passes were allowed to go into the port. Checkpoints were set up at all highways leading to Shanghai for strict epidemic prevention. And the drivers’ daily life could only be lived in the carriage. What’s more, other cities had very different policies for vehicles with a history of travelling in Shanghai. Some places even required drivers to be isolated on the spot for at least 7 days, causing drivers to resist picking up goods in Shanghai. The serious shortage of transportation capacity made a large number of containers stranded in the port, which had a negative impact on the quality of products with short shelf lives, such as grapes, avocados, and so on. This led to a sharp rise in logistics costs and overdue charges of containers, which seriously increased the operating pressure on importers and wholesalers.

疫情和相关的管控措施给了您哪些新的启示，在公司业务架构、市场布局方面是否做了哪些调整来顺应这些改变？

What new inspirations have the epidemic and related control measures given you? Have you made any adjustments in the company’s business structure and market layout to comply with these changes?

Timothy:

疫情期間的管控促使社區團購的發展, 很多業外人員也成為團長主動聯繫批發商採貨。中國果蔬市場傳統上依賴批發市場、農貿市場、線下商超所組成的購銷鏈, 但疫情封控給我一個提醒, 社區團購、直播帶貨等新業態是不能忽視的, 這些業態背後的「粉絲」是一股潛力強大的購買力, 常規化的疫情封控會助長這些新業態的發展。消費者也會慢慢習慣這樣的採購方式, 但他們對質量、新鮮度的要求是不變的, 因此這些新業態對物流冷鏈有嚴格要求, 也促使對供應鏈服務商的需求。我認為這個發展趨勢對傳統的批發市場、線下商超的市場份額會慢慢蠶蝕。所以我司也在傳統批發商客戶的基礎上, 討論如何一起發展供應冷鏈的業務, 和客戶一起應對市場變化、共同成長。

The lock down prompted the development of community group buying, and many people outside the industry also became Leaders of the group and took the initiative to contact wholesalers to purchase goods. China’s fruit and vegetable market traditionally relies on the purchase and sales chain composed of wholesale markets, traditional fresh markets, and supermarkets. But the Epidemic closure and control reminds me that new business models, such as community group buying and live streaming e-commerce, cannot be ignored. The «fans» behind these business models have a large potential purchasing power, and the routine Epidemic closures and controls will promote the development of these new business models. Consumers will gradually get used to such a procurement method, but their requirements for quality and freshness remain unchanged. Therefore, these new business models need to have strict requirements for logistics cold chain, and they must also promote the demand for supply chain service providers. I think this development trend will slowly erode the market share of traditional wholesale markets and offline supermarkets. Therefore, on the basis of our traditional wholesale customers, our company discusses with them how to develop the business of supply cold chain, and cope with market changes to grow business together.

月解封至今，是否仍有哪些会在中短期内持续存在的问题影响果蔬供应链的运转？中国消费者的消费习惯和果蔬需求趋势因此出现了哪些值得关注的改变？

Since the opening in June, are there any problems that will continue to exist in the medium and short term that will affect the operation of the fruit and vegetable supply chain? What changes should be paid attention to in the consumption habits of Chinese consumers and the demand trend of fruits and vegetables?

Timothy:

核酸檢測結果和健康碼對中國物流貨運的從業員非常重要! 但目前本地的核酸檢測結果不能顯示在外地的健康碼上, 某些地方也會要求有途經中高風險地區省市外來司機抵埗後再在當地做核酸檢測, 未出結果不能放行。我希望能夠有一個全國通用的健康碼能適用全國各地的核酸檢測結果, 這樣能打破地域限制, 節省物流貨運從業員多餘的核酸檢測時間。

常規化的疫情封控促使消費者偏向採購量大、耐存的產品, 當長時間小區封控實行時, 貨架期長的品項如蘋果、梨、橙子等會比較暢銷。但封控解除後, 消費者還是忠於本心偏向應季的產品, 追求新鮮、高性價比, 最終的消費趨勢也是市場上的供應去主導的, 當季什麼品種價廉物美, 消費者就會選擇購買。

Nucleic acid test results and health codes are very important for Chinese logistics operators! However, at present, the local nucleic acid test results cannot be displayed on the health code in other places, and some places will require foreign drivers who have the route passing through medium and high-risk areas to do nucleic acid test in the local area after arriving, and they cannot be released without the results. I hope to have a nationwide health code that can be applicable to nucleic acid results all over the country, so as to break geographical restrictions and save redundant nucleic acid detection time for logistics operators.

Routine epidemic control has prompted consumers to prefer buying products in large volume and with durability. When long-period community epidemic control is implemented, products with long shelf life, such as apples, pears, oranges, etc., will be selling well. However, after the epidemic closure is lifted, consumers are still loyal to the products that are intended to be seasonal, fresh, and of value for the money. The final consumption trend is also dominated by the supply in the market. Consumers will choose to buy whatever variety is cheap and good quality in that season.

当前果蔬主要的营销方式发生了哪些改变？（店内试吃等所占比重是否越来越小？线上/直播营销面临哪些问题？）

What changes have taken place in the current marketing methods of fruits and vegetables? (Is the proportion of in-store samples getting smaller? What problems do online / live broadcast marketing face?)

Timothy:

正如我上述提及, 社區團購、直播帶貨等新業態會有更快的發展! 但目前線下商超、農貿市場還是主要的銷售平台, 當前果蔬的購買主力是以長者和家庭主婦為主, 他們比較習慣現場親自試食採購, 而且長輩們不太懂參與直播帶貨。反而對年輕人來說, 他們主要是在大城市獨居或兩三口子的小家庭, 採購數量少, 但比較喜歡社區團購、直播帶貨的方便, 整個行業營銷方式的改變是需要一段時間去進化的, 當大部份年輕人變成中年人, 而他們的子女也習慣在線上購買果蔬, 那時候才是營銷方式的徹底改變!

之前我也提及過, 線上直播帶貨對供應冷鏈有嚴格要求, 如何減少包裝、冷鏈物流成本的同時要保持產品的新鮮度, 是線上直播帶貨面臨的問題。

As I mentioned above, new business models such as community group buying and live streaming e-commerce will see faster development! However, at present, supermarkets and traditional fresh markets are still the main sales platforms. The main buyers of fruits and vegetables are the elderly and housewives. They are more accustomed to in-store tasting and purchasing on-site, and the elders don’t know how to participate in live streaming e-commerce. On the contrary, for young people, they mainly live alone in big cities or in small families of two or three people, and the purchase quantity is small, but they prefer the convenience of community group purchase and live e-commerce. The change of the marketing method of the whole industry will take some time to evolve. When most young people become middle-aged people, and their children are also used to buying fruits and vegetables online, then the marketing method will be completely changed!

As I mentioned before, online selling has strict requirements on the supply cold chain. How to reduce the cost of packaging and cold chain logistics while maintaining the freshness of products is the problem faced by online live e-commerce.

在接下来第三季度，您看好哪些进口/国产水果的表现？为什么？

Which imported / domestic fruits are you optimistic about in Q3 this year? Why?

Timothy:

進口水果方面, 南非橙、柑橘會比較暢銷。因為這是當季的品項, 而且是國產季尾的反季節品項, 國產的柑橘、橙類新季還未開始, 尤其是柑橘類在國外的產量比去年減產, 預計到中國的貨量也相對減少, 期待這些品項在市場大賣。

國產水果方面, 我比較看好秋月梨, 這個品種已經發展好幾年, 但產量還是追不上國內市場的需求。暢銷原因是消費者喜歡秋月梨的高糖度和果肉細滑的口感, 加上臨近中秋節, 梨類是傳統的應節產品, 預計秋月梨會持續往年的熱賣行情。

For imported fruits, South African oranges and mandarins will be selling well because these seasonal fruit items arrived at the end of the domestic season. The new season of domestic citrus and oranges has not yet begun. In particular, the crop of mandarins from many origins is down compared to last year. It is expected that the volume of goods exported to China has also been relatively reduced. It is expected that these items will sell well in the market.

In terms of domestic fruits, I am more optimistic about the Autumn Moon (Qiuyue) pear. This variety has been developed for several years, but the crop still cannot catch up with the demand of the domestic market. The reason for the best-selling is that consumers like the high sugar content and smooth eating taste of Qiuyue pears. In addition, as the Mid-Autumn Festival is approaching, pears are traditional festival products. It is expected that Qiuyue pears will continue to sell well as in previous years.

目前来看，全球正逐步走出疫情，但仍有遗留的挑战（人力、农资农具、物流、不利天气、经济）。您对中短期内的中国新鲜水果市场发展有怎样的预期？

At present, the world is gradually emerging from the epidemic, but there are still remaining challenges (manpower; agricultural materials and tools; logistics; adverse weather; economy, etc). What are your expectations for the development of China’s fresh fruit market in the medium and short term?

Timothy:

我認為地緣局勢的變化所引申的一連串挑戰, 會使中國新鮮水果市場的行情更為波動。匯率波動、各國通脹趨升、地區衝突引申的出口禁運等, 這些挑戰同時發揮複雜的關聯性, 影響各國的消費需求、航運物流成本等, 中國作為全球主要的經濟體, 其市場所受到的影響會更為明顯。我認為中國新鮮水果進口商對中短期的訂單計劃會更為謹慎, 不能只憑往年的行情經驗去做訂單決定, 會更多參考其他市場的變化和到貨量去預判國內行情。某些進口商甚至會改變銷售策略, 轉為重點銷售國產水果去減輕地緣局勢變化的市場風險。

I think a series of challenges caused by the change of the geographical situation will make the market of fresh fruit in China more volatile. Exchange rate fluctuations, rising inflation in various countries, export embargoes caused by regional conflicts, etc. are all challenges that create a complex correlation at the same time, affecting the consumption demand and shipping logistics costs of various countries. As a major global economy, China’s market will be more affected. I think Chinese fresh fruit importers will be more cautious about their medium and short-term order plan. They can’t make order decisions only based on the market experience of previous years. They will make more reference to the changes in other markets and the arrival volume data to predict the domestic market performance. Some importers will even change their sales strategies and focus on selling domestic fruits to reduce the market risk of geographical changes.

维持供应链的高效运转是疫情以来全球果蔬业面临的最主要挑战。疫情期间，中国有一些新的港口和物流通道开放，包括佳沛在内的公司也首次尝试新的输华港口或路线。贵公司业务是否也有这方面的新尝试？看好哪些新的输华渠道（以及针对的国家/品项？

Maintaining the efficient operation of the supply chain is the main challenge facing the global fruit and vegetable industry since the epidemic. During the epidemic, some new ports and logistics channels were opened in China. These include Zespri, who also tried new ports or routes to China for the first time. Is your company attempting anything new on this aspect? Which new channel for exporting to China are looking good to you (and targeted countries / items)?

Timothy:

其實過去2年我們在計劃和南非柑橘、橙的合作包裝廠開通直航包船到廣州南沙港, 但由於疫情和市場行情波動的原因, 我們還在等待合適的時機去推進這個計劃。南非柑橘、橙類輸華需要預先進行冷處理作為檢疫條件, 包船比集裝箱有更穩定的溫度控制, 能夠保障柑橘橙類的到港質量。在國家的粵港澳大灣區發展規劃綱要下, 廣東省政府也在積極推進南沙區的發展, 提供完善的港口設施和簡化的清關流程, 使南沙港具備強大的競爭力, 因此我對南非柑橘橙開通直航包船到廣州南沙港充滿期待。

In fact, in the past two years, we planned to work together with South Africa Citrus Packers to open a direct shipping Break-Bulk Vessel to Nansha port in Guangzhou. However, due to the epidemic and market fluctuations, we are still waiting for the right timing to promote this plan. South African Citrus and oranges exported to China need to be cold treated in advance as a quarantine condition. Chartering has more stable temperature control than containers, which can ensure the arrival quality. Under the outline of the national development plan for Guangdong/Hong Kong/Macao Great Bay Area, the Guangdong provincial government is also actively promoting the development of Nansha District, providing perfect port facilities and simplified customs clearance process, so that Nansha port has strong competitiveness. Therefore, I am full of expectations for the opening of a direct Break-Bulk Vessel from South Africa to Guangzhou Nansha port.

您认为这一趋势是否会持续发展下去，让输华水果比以往更加分散？这对行业会产生怎样的影响？

Do you think this trend will continue to develop and make the fruits exported to China more dispersed than before? How will this affect the industry?

Timothy :

我認為這是國家經濟發展的大趨勢, 過往的主要進口水果清關口岸依靠邊境陸運口岸、香港、上海等主要沿岸港口, 在疫情管控常態化之下, 這些傳統口岸在進口水果高峰期如春節前期會承受巨大的貨量壓力, 剛過去的春節塞港問題使各進口商和果農蒙受巨大損失。在宏觀經濟發展的考慮下, 國家是鼓勵開通更多的進口水果輸華路線以促進各口岸、港口的發展。鄭州水果進境空運口岸是其中一個例子。進口水果的重點批發市場目前在廣州和上海, 在越來越多華中、華北的口岸發展和開通之下, 我認為這樣會促進當地水果批發市場如鄭州萬邦、北京新發地、河北高碑店市場和當地進口商的發展, 將來全國進口水果批發市場的份額會趨向均衡發展。

I think this is the general trend of national economic development. In the past, the main import ports were mainly border land ports such as Hong Kong, Shanghai, and other major coastal ports. Under the normalization of epidemic control, these traditional ports will have huge volume pressure during the peak period of imported fruits, such as the pre-sale period of Chinese New Year. The problem of port congestion in the past Chinese New Year caused huge losses to importers and packers. In consideration of macroeconomic developments, the State encourages the opening of more imported fruit routes to China to promote the development of more ports. Zhengzhou Airport for Fruits Importing is one example. At present, the key wholesale markets of imported fruits are located in Guangzhou and Shanghai. With the development and opening of more and more ports in central and northern China, I think this will promote the development of local fruit wholesale markets such as Zhengzhou Wanbang, Beijing Xinfadi, Hebei Gaobeidian market and more local importers operated there, and the market share of most imported fruit wholesale markets in the entire nation will tend to develop in a balanced way in the future.

清关是进出口商最为头疼的问题之一，现在是否出现缓解？海关总署近日表示“对输华冷链食品检出阳性的境外食品生产企业，不再实施暂停进口申报的紧急预防性措施。”，这对水果进口有怎样的意义？

Customs clearance is one of the most troublesome problems for importers and exporters. Is there any relief now? The General Administration of Customs recently said that «emergency preventive measures to suspend import declaration will no longer be implemented for overseas food production enterprises that have detected Covid positive on cold chain food exported to China». What is the significance of this for fruit import?

Timothy:

由於疫情影響,很多進口商在減少進口水果的訂貨量以應對市場行情風險, 因此目前各口岸沒有特別嚴重的貨櫃滯留壓力, 清關流程按正常的效率順利執行。上述海關總署的政策是比較科學方面考慮去實施的, 加上目前海關要求的進口冷鏈食品防疫消殺流程, 貨物到消費者手上之前已經進行過消毒, 已經可以減低接觸冷鏈食品而受感染的風險。這會提振消費者購買進口水果的信心, 也給了進口商和消費者經驗, 不會再對檢出陽性的進口水果產生額外的恐慌, 避免再次發生對進口水果市場行情的嚴重衝擊。

Due to the impact of the epidemic, many importers are reducing the order volume of imported fruits to cope with the market risk. Therefore, at present, there is no particularly serious congestion pressure at ports, and the customs clearance process is being implemented smoothly according to the normal efficiency. The above-mentioned policies of the General Administration of Customs are considered to be implemented in a more scientific way. In addition to the current epidemic prevention and disinfection process of imported cold chain food required by the customs, the goods have been disinfected before reaching consumers, which can reduce the risk of infection. This will boost consumers’ confidence in buying imported fruits, and it also gives importers and consumers experience to cope with this issue again. There will be no additional panic about the Covid positive found on imported fruits, so as to avoid a serious impact on the market again.

疫情是否让水果货物的全程可追溯性比以往更加重要。这是否给行业带来了哪些新的机遇？

While the epidemic makes the whole fruit process traceability more important than ever, does this bring any new opportunities to the industry?

Timothy:

全程可追溯性一直是業內重點發展的項目, 尤其是目前疫情防控常態化, 可追溯性對食品安全尤其重要, 也是目前消費者最為重視的。我在去年底的訪問中提及過, 希望各國能夠共同制定統一的消殺防疫標準以簡化各地的清關消殺流程, 全程可追溯性必定是各國海關的重點要求。這可能會促進國際科技巨頭對食品安全、可追溯性等領域的投資和科技研發, 我嘗試大膽猜想一下, 將來會否發展一種病毒探測器, 就像我們現時放在集裝箱的溫度紀錄儀一樣, 能夠實時定位監察不同病毒、細菌的濃度水平, 以方便各國海關人員實施貨物檢疫和感染源頭追蹤?

Traceability has always been a key development project in the industry, especially in the current normalization of epidemic prevention and control. Traceability is particularly important for food safety, and it is also the most important consideration for consumers at present. I mentioned in my previous interview at the end of last year that I hope all countries can jointly formulate unified disinfection and epidemic prevention standards to simplify the customs clearance and disinfection process around the country. The traceability must be the key requirement of customs all around the world. This may promote the investment of international technology giants on their research of Food Safety and Traceability. I try to make a bold guess. Will a virus detector be invented in the future, just like the temperature recorder we currently put in containers, which can monitor the concentration levels of different viruses and bacteria in real time, so as to facilitate the customs officers of various countries to implement cargo quarantine and trace the source of infection?

还有哪些关于中国市场的信息和观点愿意和全球业者分享？

What other information and views about the Chinese market would you like to share with global industry people?

Timothy:

疫情防控常態化加上外圍地緣局勢變化的不確定性, 使越來越多中國進口商考慮轉變業務重點, 集中精力在國產水果的銷售上。我看到國產水果在質量和包裝設計上有明顯進步, 中國消費者也不再盲目付出高價去追求進口水果, 某些質量好的國產水果賣價甚至高於進口水果, 高品質、高性價比永遠是銷售成功的關鍵。但目前國內水果種植都是以個體農戶分散種植為主, 沒有類似新奇士這樣的同業組織去統一果農的採收時間和質量標準, 我相信中國的水果種植還有很大的發展空間, 當形成質量標準化、產量規模化, 其低物流成本的競爭力會對進口水果銷售帶來長遠的衝擊, 各國包裝廠、出口商要思考怎樣保持高品質的同時, 降低各項成本保持在中國市場上的競爭力。

The normalization of epidemic prevention and control, and the uncertainty of changes in the peripheral geographical situation, have made more and more Chinese importers consider changing their business strategy and focusing on the sales of domestic fruits. I see that domestic fruits have made significant progress in quality and packaging design, and Chinese consumers no longer blindly pay high prices to pursue imported fruits. The selling price of some domestic good-quality fruits is even higher than imported fruits. High quality and high value are always the key to successful sales. However, at present, domestic fruit planting is mainly operated by individual farmers, and there is no organization like Sunkist to unify the harvest time and quality standards of farmers in China. I believe that there is still much room for the development of fruit planting in China. When quality standardization and crop harvest standardization are formed, its competitiveness of low logistics costs will have a long-term impact on the sales of imported fruits. Packers and exporters in various countries should think about how to maintain high quality while reducing various costs and maintaining competitiveness in the China market.