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Effective Distribution to Reach Chinese Customers By: Mr. David Kuk Managing Director, DCH Logistics Co. Ltd.

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Presentation on theme: "Effective Distribution to Reach Chinese Customers By: Mr. David Kuk Managing Director, DCH Logistics Co. Ltd."— Presentation transcript:

1 Effective Distribution to Reach Chinese Customers By: Mr. David Kuk Managing Director, DCH Logistics Co. Ltd.

2 Dah Chong Hong Holdings Ltd. DCH Holdings was established in 1949 Total turnover in 2011 : USD 6 billion 3 core businesses: Motor, Food and Consumer products and Logistics. DCH has 93 Food Mart stores in Hong Kong Advantages of DCH Food Mart stores Wide Coverage in Hong Kong Gate way to China Blooming Tourism Market (42 million in 2011, 67% from Mainland China) Competitive Price (NO tax and VAT) Brand awareness Increased: Tourists buy and bring back to home countries

3 Seafood DRIED SCALLOP FROZEN SCALLOP SCALLOP DRIED ABALONE MACKEREL SAURY DRIED SEA CUCUMBER CRAB SHRIMP OYSTER FISH SURIMI SARDINE Fruits & Vegetables FRESH FRUIT FRESH VEGETABLE TOFU BOILED VEGETABLE MUSHROOM AZUKI BEANS INSTANT NOODLE Snacks & Grocery FROZEN CAKE TEA (GREEN/MUGI TEA) JUICE FROZEN INAKA SOBA FROZEN PASTA MISO FROZEN RAMEN KONNYAKU SALT DRY SOBA PLUM LIQUOR INSTANT NOODLE JAPANESE NOODLE SAUCE INANIWA UDON SANUKI UDON COFFEE GRILLED SCALLOP SLIM TEA JELLY CANDY BLACK VINEGAR CHOCOLATE 58% 9% 14% 19% Frozen Meat 10% Products are from Japan Beef Our Food Mart Supermarket

4 DCH China One of the Leading National FMCG Distributors in China More than 20 years of experience in China Providing services in more than 28 cities, selling directly to about 15,000 stores Focus on Food and Beverage Having distribution channels of Retail, Food Service, Horeca, TVS, Internet, etc. Customers of Retail, Food Service and Internet Channels Internet RetailFood Service

5 4 Key Categories of Agency Partnership in China JAs Apples ConfectioneryBeverageNutritionalFood Service

6 DCHs Promotion for Japanese Products Joint Promotion with JA & MAFF Exhibitions Truck advertisement In store Promotion & Display Sales & Exhibition Center in South ChinaPromotion Events

7 Nationwide Distribution Channel Logistics Centers North: Beijing East: Shanghai Nanjing Suzhou Wuxi Xiamen South: Guangzhou Shenzhen Xinhui West: Chengdu Central: Wuhan DCH Offices Hong Kong Macao Xinhui

8 Importation Flow into China Fire Wall for Imported Products A. General Products to Bonded Warehouse Food Safety Testing if necessary Ensure products quality Goods arrive at China Port Goods into bonded warehouse wait for CIQ check and Customs Clearance Value adding services can be Done inside bonded warehouse If any issue occurred and fail, goods can be returned back to country of origin or HK Repackaging Delivery Multi Temperature Point to Point On time Sales and Distribution Customs Clearance Non-Bonded Warehouse (Multi-temperature) Sourcing & liaise with suppliers in Japan Documentation Chinese Label Application Lab Test Certificates

9 DCHs Logistics Setup DCH Xinhui Logistics Center in South China. Xinhui Logistics center can act as a gate way for southern and western China market. Bonded Warehouse Not regarded as entering China Firewall for imported products No need to pay tax & VAT until selling in China market Custom Clearance Good Relationship with local officials Food Safety Testing Foreign Product Exhibition & Display Center International Repackaging Center Material Sourcing, Package Design, etc. Multi-Temperature Storage Ambient, Air-conditioned, Chilled, Frozen Multi-Temperature Delivery GPS & Food Tracking and Tracing System

10 Products from Japan Goods arrive at supermarkets at right temperature with accurate record Unloading & Warehousing at Air-conditioned Decks Goods stored in warehouse at right temperature Whole Process: Temperature Control and Checking Warehouses: Temperature Detection & Keeping full record Temperature Checking when Receipt GPS DCHs Seamless Cold Chain Management To ensure quality of chilled & frozen products

11 Conclusion 1. High Selling Price1. Be competitive by lowering the cost through supply chain efficiency ; Shipping in Bulk and repack in China HurdlesSolutions 2. Short Shelf Life2. Improvement through latest food technology 3. Always Difficult for SMEs Products due to no economies of scale ; high entry costs like listing fee 3. Consolidation in Hong Kong Form a basket of Japanese Products for shipment and promotion 7. Lack of Experience in China Market7. Work with a reliable & experienced partner 4. Radiation Incident Customers are lack of confidence 4. Certificate proving Radiation Free ; Seamless Food Tracking & Tracing System to increase customers confidence 5. Lack of Promotion Platforms5. Setting up a long term sales & exhibition platform in DCH D.C. 6. Complicated Export Documentation ; Communication Problems 6. Work with a partner that has branch office in Japan (e.g. DCH Japan)


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