Last August, Pagoda took a significant step towards globalisation by opening its first experimental shop, in Tachung, Taiwan. It was designed along the same successful lines as Pagoda’s Chinese stores, with an area of 200 m2, an attractive design and display, and a wide assortment of premium products. With this move, Pagoda became the first Chinese fruit retailer to establish a presence on the island. By moving into the Taiwanese fruit retail sector, the company is enacting a long-held plan for its operations in Taiwan. It sees great potential in the Taiwanese market due to the relatively few fruit stores there. Pagoda now hopes to help develop the fruit retail market in Taiwan and strengthen its ties with local fruit businesses there.
The award-winning retailer has also launched its own digital application. “Our aim is to start selling our products online,” said Pagoda CEO Peter Zhu. And the chain continues to innovate with the launch of the new store concept Sarahpick, a convenience format serving fresh food based on fruit and vegetables. “Following the success of our first trial stores, we are now planning to open up to 200 by 2020,” Zhu said.
10,000 Pagodastores by 2020
Zhu also stressed the company’s ambitious target of opening 10,000 Pagoda fruit stores in Asia by 2020. “The other Southeast Asian countries have similar consumer habits to China, so we hope to be equally successful in those markets, too,” he said. Founded in 2001, Pagoda has since expanded rapidly, establishing a growing presence throughout the fruit sector in China. As a further demonstration of its vast ambitions, Pagoda acquired the large fruit supermarket chain, Guoduomei, in Beijing at the end of 2015.
On the logistics side, Pagoda is now directly sourcing about 80% of the fruit and vegetable volumes it distributes, supplying its stores via its 3 major regional logistics centres (in Shanghai, Shenzhen and Guangzhou) and its 12 city warehouses. As a boutique fruit retailer, Pagoda’s own brand provides premium quality fruit at affordable prices. To ensure the quality of its produce, it imports directly from overseas suppliers with whom it strives to maintain close relationships. About a third of its products are directly sourced from abroad.
Rise in cherry sales
Pagoda’s stores sell an average of 90 different items daily, with cherries, usually imported year-round, among the items seeing most growth. Its top Northern Hemisphere sources are the US and Canada, and in the Southern Hemisphere (November-March) it’s Chile, New Zealand and Australia. China’s own cherry season runs from March to June. “Melons are our second item in terms of growth,” says Zhu, “but we find it difficult to source overseas the kind of crunchy, sweet and juicy melons that Chinese consumers want.”
At the 2016 PMA Fresh Connections event in China, Pagoda took a big step towards securing a large share of the Chinese avocado market by signing up to a joint venture with US grower Mission Produce and importer Lantao. At the moment, there are few recognised fruit brands in China, so this represents a major opportunity to establish Pagoda as a leading brand. Avocados are still relatively new to Chinese consumers, with Mexican avocados reaching the market just four years ago, followed in 2015 by Peruvian and Chilean brands. Pagoda shifted its focus towards securing the Chinese market for avocados as the company believes it will represent a large part of the fruit market in years to come.
Among the top 100 retail chains
This landmark joint venture agreement for Pagoda comes hot on the heels of receiving the prestigious title of Produce Retailer of the Year at the Asia Fruit Awards at Asia Fruit Logistica 2015. What is more, this year Pagoda was named on the list of the Top 100 Chain Retailers; the only Chinese fruit retailer to claim this honour. Pagoda places great emphasis on educating consumers about the importance of a quality diet in a healthy lifestyle, and there is now an ever growing interest in China, across all the generations, in consuming premium quality fruit. That’s why Pagoda promises consumers it will refund their money if not fully satisfied.
Pagoda, whose headquarters are in Shenzhen, is the largest independent fresh produce chain in the world with 1,500 stores across China. It is looking to grow its business and form professional partnerships with excellent fruit suppliers from across the globe. The company promotes Pagoda Orchard as “everyone’s garden.”