Callebaut, selling on Alibaba's Tmall
George Zhang, managing director of Barry Callebaut China, looks into the phenomenon of Double 11 – the largest one-day online sales in China – and the company’s move for e-commerce in the country.
For most of the world, November 11 (11/11) was just another day. George Zhang and our employees in China knew that November 11 Singles' Day is also the largest e-shopping day for China. This was Double 11, an online shopping day made popular by the Chinese e-commerce giant Alibaba. Now it’s the world’s largest one-day online sale – far bigger than that of both America’s Black Friday and Cyber Monday combined.
Callebaut®, one of Barry Callebaut’s gourmet chocolate brands, was among the 60,000 international brands that took part in last year’s Double 11 blitz on Alibaba's Tmall. Shoppers received up to 30% off on a number of Callebaut products.
“Online is a relatively new relationship and experience for us,” said George. “What we’ve learned is that even chefs and chocolate users are excited about the opportunity to pick up good buys from our online site.”
As the clock struck midnight on 11/11 in China, thousands of online customers had bought Callebaut products from its Tmall store on that single day. The sales tally rang a 300% increase over previous year's record-setting sales total. The shopping frenzy sparked by the November 11 promotion was repeated on December 12, or Double 12, which is the country’s second-largest online shopping festival.
The significance of Double 11 and Double 12 is not just its gross one-day sales volume, but in how George sees e-commerce tactics gradually changing the way Barry Callebaut is doing business in China.
Meeting the needs of online buyers in China
“The Chinese consumers and business are going online. Even our customers – such as the artisanal and professional chocolatiers – in China are selling their chocolate products online to the consumers,” George said. “We are still a B2B company. But as lifestyle and business evolve, we need to have better online presence to meet our customers’ expectations and to reach out to more of these customers across all corners of China,” George explained.
The migration of the Chinese semi-professionals and professional chocolate buyers to online channels such as Tmall is spurring the greater growth of e-commerce chocolate sales. As these shoppers continue to make online purchases of their equipment and ingredients, gourmet chocolate products are also finding its way into their shopping carts.
Chinese consumers are increasingly online and e-commerce market in the country grew by 40% in 2016. E-commerce now represents 17% of total retail sales in the country. The e-commerce industry in China has generated RMB 5.33 trillion (USD 8.1 billion) in 2016, which represents twice the growth rate of the whole retail economy in China.
"Even our customers – such as the artisanal and professional chocolatiers – in China are selling their chocolate products online to the consumers." George Zhang, managing director of Barry Callebaut China
“Our gourmet customers in China prefer premium quality products. To get those premium items, these customers often need to go online to order imported goods, as the trend shows that they perceive foreign goods to be of higher quality,” he said.
On its Tmall store, Callebaut is driving more planned purchases by employing compelling online campaigns and cross-marketing activities, while their traditional sales and marketing tactics are targeting their customers in the hotels, restaurant, and cafes as well as bakers and patisseries with more bigger purchases.
Today, the company has several WeChat groups for the chef communities across several Chinese cities to provide these professionals users with relevant and timely product information. For these chefs, this is a chance to discuss how their products fit into their recipes, sharing stories on how they can be used to create fun and tasty creations, and looking for new and popular chocolate products.
“Because online shoppers often mirror brick-and-mortar ones, our customers have the opportunity to research the viability of new products before committing to bulk purchases,” George said. “We’ve also learned that smaller formats packaging is increasingly important for the artisans and semi-professional users in China because such packages are more convenient for them to use for trial. There is also a stronger focus on price but quality is equally paramount for these users.”
Partnership matters on the Internet
Barry Callebaut has a 170 years heritage as a chocolate company that has created a strong brand among food services and distributors. But in China, Barry Callebaut is gradually diversifying from its traditional roots into e-commerce that is increasingly important for its growth in China. This year, Barry Callebaut celebrates the 10 year anniversary of its chocolate factory in Suzhou, China.
“Over the last 10 years, we have gained valuable lessons by working closely with many local partners,” he said. During the Ruby Chocolate launch in Shanghai a few months back, George accompanied our CEO Antoine de Saint-Affrique and Asia Pacific president Ben De Schryver to Alibaba’s corporate campus in Hangzhou. “We have learned a lot from Alibaba, and that meeting made us so determined to push our e-commerce agenda in China,” he said.
Weeks later, George extended an invitation to Shirley Cheung to share her experience in leading China’s number one online cake maker, LeCake, with participants of Barry Callebaut’s annual global Managers’ Conference.
“I was so overwhelmed by the interest from our colleagues from around the world,” George said. “It just reaffirmed my belief that the Chinese are thinking beyond products made in Europe; it’s now about premium brands that are Made on the Internet.”
It’s all about Mobile
During his talk at the global meeting in Paris, George shared his personal experience living a day in China without cash – paying for everything including travelling and food only with his phone and his WeChat application.
“Online shopping in China is now a mobile affair, 90% of this Double 11 sales was done by mobile phones,” George said.
Alibaba’s increasingly mobile shoppers are the latest evidence that China is long past its PC era, even skipped the laptop era. People are not just using their phones for reading and games – they’re now doing pretty much everything on those smartphones, from basic grocery shopping to in-store payments to managing an online personal wealth fund.
China’s growing middle class and the country’s shift to a consumption and service driven economy will continue to spur the e-commerce growth despite China’s economic slowdown. George said he is excited that the country’s growing appetite for luxury and premium chocolate spells big opportunity for its e-commerce business.
Ultimately, George thinks we are just at the beginning. “There's room for even more online growth for Barry Callebaut beyond China. Right now, what we are doing is listening to the data, joining the conversation, and innovating for growth. But there will be much more, very soon.”