Esitys: Jonna Wibelius, Food from Finland | Elintarvikealan vientivalmennus 24.3.2017: www.evira.fi/pkvienti/vientivalmennus

1. F&B going Online –case China
© Finpro

2. A shift in consumer behavior opens up for a
new business model
Industries like consumer electronics,
appliances, toys and games, and other
household products are already firmly
established in the e-commerce space, but
food and beverage manufacturers have
overall been slower on the uptake.
As more consumers shift to a
preference for online shopping,
F&B manufacturers need to find
ways to adopt e-commerce as part
of their sales and marketing
strategies.

3. The trend is global, and F&B companies are
developing their strategies accordingly
“We’re experiencing dramatic changes within our industry. This is causing significant
shifts in the drivers of our business – consumer, customers and channels – that are
redefining the way our customers eat, live and shop. We’re constantly evaluating all
aspects of our business and working to capitalize on these shifts to maintain our
leadership in the snacking industry over the long term.” Irene Rosenfeld, chairman and
chief executive officer, Mondelez International (Feb. 21, 2017, at the Consumer Analyst
Group of New York conference in Boca Raton).

4. In 2015, Mondelez announced a growth plan
that set an aggressive e-commerce goal:
$1 billion in revenues by 2020.
Resources
• Mondelez hired a VP-global head of e-commerce, removing the segment from the
marketing department and creating its own division, proving the company’s attempt
at better integrating e-commerce into its broader corporate strategy and growth
objectives. Mondelez has also spent the last 2 years growing its e-commerce team.
Partnerships
• in 2016, Mondelez partnered with Alibaba Group, China's e-commerce leader, and
opened a flagship Alibaba’s B2C marketplace Tmall to sell its products.
Own efforts:
• In 2015, it added "buy now" buttons to shoppable online ads, making it easier for
consumers to feed their craving while browsing online.
• For 2 consecutive years, Mondelez has hosted a consumer-facing December gifting
site that allows special products and personalization.
Results:
• Net revenues in e-commerce grew more than 35% in 2016.

5. The e-commerce business model is here to
stay –Asia (China) is leading the
development
• Online retail sales is growing globally, China is
leading the development.
• Worldwide Retail Ecommerce Sales was expected
to reach $1.915 Trillion in 2016. Double-digit
growth will continue through 2020, when sales
will top $4 trillion.
• China remains the world’s largest retail
ecommerce market, with sales representing
almost half (47.0%) of digital retail sales
worldwide (eMarketer).
• Spending via mobile is booming and accounted
for 55.5% of all ecommerce sales in 2016, and is
expected to reach 68% by 2020 (eMarketer).
• Expanding middle classes, greater mobile and
internet penetration, growing competition of
ecommerce players and improving logistics and
infrastructure are the key growth factors.

6. China –growing demand for safe, imported
food
• 40% of Chinese consumers buy food
online, in contrast to just 10% of the
US consumers (McKinsey).
• The food currently offered online is
dominated by dry packaged or
canned food.
• The product categories of imported
fruit and other types of fresh food
are among the fastest growing
categories in urban areas.
• Chinese consumers are looking for
quality & safe imported food
products. The demand for health
food and supplements is also
growing.
• Domestic food scandals and concern
for food safety are some of the key
drivers of the demand.

7. What are Chinese consumers buying online?
Frequency and percentage purchased by
Chinese online consumers

8. Where are they buying it from?
Two marketplace players control 80% of the
B2C market (domestic as well as cross-
border)

9. Marketplace store VS individual brand store
Marketplace store (Alibaba’s
Tmall/Tmall Global, JD’s JD.com)
• 90% of all sales
• 50% of the brand’s SKUs (mainly
bestsellers)
• Heavy marketing
• Needs a perfect quality of service
(chat function, etc)
• Sales are public
• Volume driven
• Enclosed world –the marketplace
owns the customers and the data
• Vague search results on Baidu
Brand store (.cn store)
• 10% of all sales (some brands have less
than 1% sale on their own website)
• Full assortment of SKUs
• Branding/History/Values/E-magazine
• Shop locator/OmniChannel
• Loyalty/eCRM

10. Who’s buying? And why?
• According to Nielsen research, the typical online buyer of
imported products in China is female, younger than 30 and
with an income of more than RMB 11,000 (approx €1500) per
month.
Frequently cited reasons for shopping online include:
• Accessibility.
• Convenience.
• Price/discounts.
• Greater assortment.
• Detailed product information & customer reviews.
• Confidence: consumers place higher levels of trust in the
authenticity of purchases made on major B2C platforms such
as Tmall, JD.com and Yihaodian.

11. How to sell your products
online?
Market access models
E-commerce
model
Domestic
(local
presence in
market)
Cross-
border
Marketplace
(flagship/distributor/
third party/ online
supermarket
Direct
sales
Marketplace
flagship/distributor/
third party/ online
supermarket
Direct
sales
From home
country to
consumer
From
bonded FTZ
warehouse

12. How to get started?
• Are my products suitable for e-commerce?
• Is there a demand for my products in China?
• Consider domestic VS cross-border?
• Consider business model: flagship? Third party? Distributor? Sell directly?
• There are no quick fixes! Developing the e-commerce channel requires time and
investments.
• Branding, marketing, story-telling –key for commercial success.

13. Thank You!
Jonna Wibelius, Senior Market Specialist (e-com, China, USA)
+358504681764, jonna.wibelius@finpro.fi
Esa Wrang, Head of Industry, Director
+ 358 400 243 076, esa.wrang@finpro.fi
Annaleena Soult, Program Manager
+ 358 40 343 3447, annaleena.soult@finpro.fi
Tiina Luoma, Senior Program Coordinator
+ 358 50 464 3385, tiina.luoma@finpro.fi