No. 1 Store officially settled in Shanghai Free Trade Zone

Recently, No. 1 Store announced that the company has officially entered the Shanghai Free Trade Zone. However, because No. 1 Store was not listed separately, it was unable to participate in the collective scenery of the capital market free trade concept stocks. However, for the No. 1 shop where the imported food business is getting bigger and bigger, the policy dividend in the FTZ is the most expected, which may help to help the company break away from the red sea of ​​the e-commerce price war as soon as possible.

According to the data from No. 1 shop, No. 1 shop has imported 20,000 kinds of imported goods from nearly 70 countries around the world before entering the Shanghai Free Trade Zone. The import volume is very large. According to customs data, as of November this year, the sales volume of imported milk from No. 1 store accounted for 37.2% of the total import volume of the country’s customs. In other words, there are nearly 4 boxes of imported milk from each of the 10 imported boxes sold in China.

“As the leading e-commerce supplier of domestic imported goods, after entering the Shanghai Free Trade Zone, No. 1 stores will be expected to obtain strong policy support in developing import trade, reducing international settlement costs, and engaging in cross-border e-commerce business in the future”, 1 Yu Gang, chairman of the store, said.

Huang Zhixiong, vice president of No. 1 Store, told the Securities Daily: “Whether there will be more efficient changes in the customs declaration, inspection and quarantine chain of imported foods, help the entire supply chain to be as short as possible, and further wait for the clarity of policies and practices.”

Helps improve the supply chain

As we all know, one of the difficulties in importing imported food into China is that the supply chain is too long. "As imported foods are constrained by the validity period, together with the process of customs clearance, the validity period may be over a third or half when consumers buy." The relevant person in charge of Hershey’s company, Fu Yan, expressed to Securities Daily. According to public information, Hershey is the largest chocolate and chocolate confectionery manufacturer in North America and has a history of 110 years.

The reason why No. 1 Store can lead the import food category in e-commerce is largely because the company is backed by Wal-Mart and can help many foreign food manufacturers solve the problem of “difficulty in landing”. "We want to ship good products to China, but it's difficult to expand offline. The No. 1 store is a platform that just created an opportunity for us to help through an efficient channel called 'Brand Through Train'. We quickly completed the process of brand declaration, procurement, transportation, etc. Then, through the warehousing of the No. 1 store, we can quickly share with consumers in all of China. Why did we choose to cooperate with the No. 1 store? Because this is the most convenient way.” He said.

Although No. 1 stores are equivalent to Jingdong and Suning as comprehensive electricity suppliers, their most competitive products are not 3C and home appliances. In this regard, Huang Zhixiong also admitted to the Securities Daily: "In the area of ​​e-commerce, everybody will think of Jingdong when they buy 3C, they will think of Amazon and Dangdang when they buy books, and they think of No. 1 stores when they buy food. The genes of No. 1 store determine the company's imports. Food has a unique and inherent advantage. If food is the core category of No.1, then imported food is the category of No.1 store."

So, how high is the threshold of this barrier? "After the cooperation between No. 1 and Wal-Mart, Wal-Mart's supply chain, especially in the purchase of imported goods, has given great support to No. 1 store. This combination is not easily cultivated by other competitors," Huang Zhixiong said.

Benefit from "Food Diplomacy"

According to Huang Zhixiong’s introduction, many imported foods sold at No. 1 store are directly collected from the manufacturers, unlike other e-commerce providers who want to pass through secondary agents and tertiary agents.

For this "ability" of No. 1 shop, Huang Zhixiong said that it is mainly due to the strong promotion of the embassies of various countries in China. “The government agencies in China gave us a lot of help. When we started importing food in 2010, it was the Australian agency in Shanghai that recommended it to us. Because of their recommendations, we have greatly accelerated the introduction of imported food. In fact, The Chinese agencies are also very happy to have a platform and an opportunity to recommend domestic companies and their products to Chinese consumers."

This point was also confirmed at the opening ceremony of the "Global Food Festival" held at No. 1 Store. Embassies of the United States, Australia, Spain, the United Kingdom, and other countries in China all sent representatives to attend the conference. The responsible persons of overseas food giants such as Yizi, Nestle, and Hershey also participated in the whole process. “We are further consolidating the leading edge of the No. 1 store through the food brand 'Brand Through Train' and the 'United Nations' strategy at the tip of the tongue. Let domestic consumers realize that No. 1 is the best choice for buying imported food.” Huang Zhixiong said.

In fact, the Chinese market has long been an important target for many overseas food giants, in addition to the “inside” of the No. 1 store. According to the forecast of the American Food Industry Association, by 2018, China will become the world’s largest consumer of imported food. By then, the scale of China's imported food market will reach 480 billion yuan.