LOTUS : INTRODUCE THE "ORIGIN AND HEALTH" CONCEPT TO CHINA

LOTUS - the retail supermarket giant of Chia Tai Group was established in 1921 by Chinese Thai industrialists brothers Chia Ek Chor and Chia Siew Whooy. Starting from selling crop seed, Lotus built up a large and complete modern industry chain in agriculture and animal husbandry. Lotus has a strong hold to supply chain and chain hypermarkets in distribution, especially in terms of Thai food imports. This year marks the 19th anniversary of its entry into China and Lotus has adapted itself to the China market.

Strictly control the supply chain

Thai fruit is always reputed for its rich variety and quality. In Lotus, fruit accounts for 80% - 90% of its Thai food and in its overall fruit import, the proportion of the Thai fruit is as high as 70%. Lotus imported from Thailand more than 170 containers of Thai fruit last year, among which, according to a manager, durian, coconut, mangosteen and banana are the most popular ones to Chinese customers. The most popular Thai fruit is durian, the total import value of which reached 50 million yuan last year. So Lotus will increase the procurement of Thai fruit including coconut, mangosteen etc. in the days later.

Quality ranks the top in customers' concern list, which is also the reason why Lotus arranges specific personnel to monitor the process from planting, harvest to transportation in the origin. Moreover, direct import from the origin, one of Lotus' cutting-edge strategies, has shortened the process by two or three days when compared with purchasing from wholesale market. Generally, after picking, there will be only six days before Thai fruit appears in terminal stores, so the fruit quality is well guaranteed.

Referring to the most popular Thai fruit, durian, Lotus owns its proprietary brands: CP fruit and the high-end one: CP. The latter is specially customized for buyers with a very strict source monitoring. In the best durian origin Chanthaburi Province, Lotus contracted for a plot of land and appointed five to six workers responsible for environmental monitoring and field management; fruit thinning reached 50 per tree (100 per tree in general) with insect proof nets and no pesticide and fertilizer; from flowering to mature, each durian enjoys a long growth periodicity of about 125 days (generally, the fruit ripens within 90 days). When the durians are nearly ripe, they will be transported directly to China by air and a quick customs clearance will be offered by professional company agents. So in the evening of the day, Chinese customers can buy the durians picked in the morning in Lotus stores, and the fresh taste and flavor of the fruit are all retained.

Advocate Marketing Education

With Thai rice ranking top of Thai's export in volume, Thai jasmine rice is now among the key commercial varieties in Lotus. It has been a long time since Thai jasmine rice entered China market, and its sales volume gained a double digit growth every year. Thai jasmine rice sales in the five provinces in South China only accounts for 73% of the total export volume of China market.

At present, for Chinese customers' concern of food safety, the promotion of Thai rice focuses on conveying the concept of origin, using both the 885 bar-code and the certifications of the Ministry of Commerce of Thailand to boost confidence in consumers. Besides, Lotus will continuously hold promotion activities to enable customers to buy Thai rice imported with original packaging at an affordable price. For example, Thai rice harvested in November and December, after customs declaration, will arrive in China market in the first three months of the next year, during which the Chinese celebrate the Spring Festival, the best time for promotion.

Establish Differentiation Advantages

From Farm to table, from breeding to processing and sales, one of Lotus' advantages is the perfect supply chain of frozen meat and seafood of Chia Tai Group. Therefore, Lotus sets up a Store-in-Store sales counter in the supermarket for better promotion. With its rich experience, Lotus has been searching for breakthroughs in terms of packed Thai food. In recent years, Thailand dried fruit has been sold very well. Except for dried mango and durian, Lotus will continue to introduce different tastes such as dried mangosteen. Besides, due to the relatively plain flavor of Chinese instant noodles and a high enthusiasm for new taste among Chinese customers, Lotus also introduced instant noodles from Southeast Asia, with Tom Yum Kung and curry being the major flavors. Thai snacks such as Tao Kae Noi Crispy Seaweed, Koh-Kae Peanuts and a variety of cookies have always been popular among Chinese customers.

However, there are still difficulties for Lotus to overcome. Due to poor variety and high cost, Thai drinks saw a fall of 10% in sales last year because of the impact of pure fruit juice (1000 ml) and products from other countries. Besides, customers in South China are apt to eat fresh fruits. So Lotus will, with high quality and reasonable price, focus on the concept that healthy and vitaminrich juice can be available all year round, trying to gradually change the ideas and habits of Chinese consumers.

Continuously Expand Online and Offline Market

The past two years have witnessed an upsurge of cross-border e-business platforms of different sizes. Chia Tai Group has reached an agreement of cooperation with Itochu Corporation, CITIC Group Corporation and China Mobile Limited on jointly developing their cross-border e-business. As a retail brand of Charoen Pokphand, Lotus will follow the step under the strategic framework of cross-border e-business.

For young customers, Lotus has developed an online shopping channel 'cplotus.com' providing more than 1,000 products ranging from fresh food, packed food, household articles, imported food, etc. Consumers can pick up goods by themselves or ask for logistic distribution services. Further segmentation has been made in offline stores according to the conditions of local markets, and physical stores of different business models are opened, catering to different customer groups.