Speaking during last week’s inaugural Beef Festival in Chongqing, China’s largest metropolis, Feng Jiyu, general manager of Hengdou Agriculture Co, which operates a beef processor of the same name, said the company had been establishing a nationwide network of warehouses which would allow it to deliver nationwide once the company’s website was set up.
Hengdou, said Feng, had established a marketing headquarters in Beijing and branch offices in all the country’s key population belts, including northerly Shenyang but also the populous central province of Henan and the wealthy southern cities of Guangzhou and Shenzhen.
The announcement about an own-name online retail operation came after Hengdou, in March, launched nine new packaged meat products, such as cooked liver, tripe and brisket, prepared in various Chinese styles and frozen for quick cooking. The firm already sells a range of frozen steaks and dried jerkies. These are retailed via key Chinese online sites such as Taobao.com, Tianmao.com and Jingdong.com. Hengdou sells 150g packaged frozen steaks online for RMB22 with five-steak packs selling for RMB178 on Jingdong.com, a food-focused online retailer.
The firm gives consumers instructions on how to cook beef such as steaks in ‘Western’ ways: Chinese cooking tends to emphasise the use of stir-fried cubes of beef as well as clay-pot cooking of variety/offal cuts.
According to Feng, Hengdou is keen to maximise online sales both of gift boxes and convenience snack products. But it is also looking to sell wines, olive oils and other high-margin imported food products which it currently markets in marketing material to educate customers on how to consume beef.
"We will increase both our online and our offline presence," Feng told journalists in Chongqing. Notably, the firm last month opened a brand-name store in Beijing’s fashionable Wangjing district. "It is vital to use offline stores to build brand recognition," said Feng. His retail clients include Walmart, RT-Mart and Carrefour outlets in China.
Traceability is a key marketing point for Feng, who said online customers would be drawn to the company’s ability to trace meat – all of which, Feng said, came from the company’s own 300,000 herd of Simmental and Chinese-native Luxi cattle, fed in feed-lots adjacent to company slaughtering facilities in northern and south-western China.
Hengdou has seen online retail shake up China’s traditional retail market in the past few years, with consumers switching to frozen and convenience meals in a manner before unseen in China where wet markets – most without any refrigerated meat – and supermarkets have long dominated.
Based in Sichuan, one of China’s fastest-growing regional economies, Hengdou stands to gain from rising beef consumption, according to Feng, who pointed to average per capita beef consumption of "5kg per capita in China compared to 45kg in developed countries".
Long-term, China has the potential to export branded beef products to Muslim and other countries, stated Liu Changde, head of the beef committee at the China Animal Husbandry Association (CAHA), a government body. CAHA and the Chongqing government teamed up with Hengdou to organise the Beef Festival, which saw demonstrations on how to cook beef as well as how to recognise "water-injected and fake beef" according to an invitation to the event sent to China-based journalists.