Asian Agribusiness Consulting

Danish Crown targets China growth through Alibaba deal

Pork giant Danish Crown has signed a memorandum of understanding with Tmall, one of Chinese e-commerce firm Alibaba's business-to-consumer marketplaces.

The cooperative, the world's largest pork exporter, will now see its products made available to the 466m annual active consumers on Alibaba's e-marketplaces.

As part of the agreement, the meat of 1,001 Danish pigs - the number is based on the title of a well-known fairy tale - from one of Danish Crown's cooperative members on the island of Langeland will be reserved for sale to Chinese consumers, ready for Chinese New Year in February 2018.

But in less than two years' time, pork for the Chinese market will be processed at a new Danish Crown plant near Shanghai.

Danish Crown CEO Jais Valeur said: "Partnering with Tmall has enormous potential for Danish Crown. Chinese consumers are buying much more of their food online than anywhere else in the world. 

"By selling our products through Alibaba's e-marketplace, we get access to a vast sales platform and ensure that Danish Crown can become a pork provider of choice for the growing Chinese middle-class."

David Lloyd, managing director of Alibaba's operations in the UK, Ireland and Nordic markets, said: "Danish produce enjoys an excellent reputation in China and I am pleased to announce this agreement with Danish Crown today. 

"Chinese consumers increasingly want reassurance that the meat they consume is of outstanding quality and reared to high-standards, and we look forward to working closely with Danish Crown to enable the 466m annual active consumers on our e-marketplaces to buy quality Danish meat products on Tmall Fresh to enjoy at home."

Tmall will be running an online marketing campaign aimed at Chinese consumers on their platform from 24 August for three days, which will heavily promote Danish food and products, including the Danish Crown brand.

Danish Crown started exporting pork to China in 1998. In 2016, more than one full container load of pork was shipped every hour, every day, all year round. The majority of it is sold to Chinese distributors.

Last year Danish Crown exported more than 260,000 tons of pork to China representing a turnover at approximately EUR600m (US$705.1m).

The Danish Crown product range for Tmall will be picked, processed and packed at the Danish Crown facility in Ringsted, Denmark. In spring 2019, the production will move to a newly established Danish Crown factory in Pinghu, close to Shanghai.

Source: Just-Food. Date: 2017-08-23