Market Research In China - Australian Centre for International ...

Market Development Research in China
September 02 – 12, 2007
In-market Research to Identify Prime Target for Future Market Development under
the auspices of Australia – Pakistan Agriculture Sector Linkages Program (ASLP)
Compiled By
Muhammad Sohail Mazhar
Reviewed By
Dr. Aman Ullah Malik
Dr. Timothy Sun
Contributions
Sosheel Solomon Godfrey
Babar Ehsan Bajwa
Muhammad Iqbal
Waheed Ahmed
Australian Center of International Agricultural Research (ACIAR)

Table of Contents
1. Introduction 02
2. Market Potential of China 02
3. New Market Development Research in China 03
3.1 Project Research Team for New Market Development Research in China 03
3.2 Getting Chinese Visa 04
3.3 Preparation of Consignment 04
3.4 Travel to China 05
3.5 Custom Clearance in China 05
3.6 Visit to Urumqi Yuqi Biological Science and Technology and Development. 06
3.7 Visit to Plant Quarantine Office, AQSIQ, Urumqi, China 08
3.8 Visit to Superstores/markets, Urumqi 09
3.9 Meeting with the Management of Xinjing New Cooperation, Jiajiale
Supermarket Co., Ltd. (NCS) 10
3.10 Visit of Fruit & Vegetable Wholesale Market, Urumqi 11
3.11 Meeting with Freight Forwarder: Railways Department, Urumqi 13
3.12 Running the Focus Group 1, Urumqi 13
3.13 Visit to Golden Wing Mau (GWM) Agricultural Produce Co. Ltd, Shenzhen 14
3.14 Visit to WalMart, Shenzhen 15
3.15 Running the Focus Group 2, Shenzhen 16
3.16 Meeting with General Manager, Shenzhen Agriculture Products Logistics
Co. Ltd., Shenzhen 17
3.17 Visit of Shenzhen Agricultural Wholesale market 18
3.18 Visit to Guangzhou Jiangnan Fruit and Vegetable Wholesale Market
Development Co., Ltd. 19
4. Consumer’s Section 20
5. Conclusion 20
6. Follow up Actions 22
7. Acknowledgements 23
Annexes 24
1

1. Introduction
Mango is the fifth largest fruit being produced in the world in terms of production and
Pakistan stands 5 th among eminent mango producing countries. The total mango
production of the world is 27.96 million tonnes and the Pakistan’s share is around 5.97 %
in it. Pakistan has got a wide range of cultivated mango varieties in its two provinces,
Sindh and Punjab, and thus its mango remains available in the market from May to
September. Although Pakistan is the 4 th largest mango exporter in the world, yet its
export volume is very low (10% of total production) and the average price earned by
mangoes from its existing importers is also far less (US$ 307.48/ton) than earned by
many other mango exporting countries (FAO, 2005).
Owing to the immense potential of Pakistani mangoes for increase in export quantity and
to improve the unit price of mango, Australian Center for International Agricultural
Research (ACIAR), in collaboration with Pakistani collaborators has initiated the ASLP
Mango Supply Chain Management Project in Pakistan on “Optimising Mango Supply
Chains for More Profitable Horticultural Agri-enterprises in Pakistan and Australia”. The
aim of this ASLP project is to address key constraints currently limiting the
competitiveness of supply chains for Pakistan and Australian mangoes. The specific
objectives of this project are:
1. To improve and maintain mango quality from harvest to consumption.
2. To identify present market needs and likely future opportunities for Pakistan
mangoes, using this information to inform the analysis of existing supply chains and
the development of improved supply chain management systems and practices.
3. To work with selected mango supply chains so that they can demonstrate to the rest
of the industry the impact of improved supply chain management on competitiveness.
4. To build capacity in Pakistan mango R,D&E institutions to conduct supply chain
analysis and implement improved supply chain management practices.
The current activity of market development research in China was conducted to explore
the future opportunities for Pakistan mangoes.
2. Market Potential of China
China is the thickest populated area of the world (Fact sheet of China is provided as
Annex 1). Although China is the second largest world mango producer with an annual
production of 2561.5 thousand Mt, with its mango season prevailing from March to
September, even then it imports mangoes from Australia, Philippines, Thailand, Taiwan
and Brazil round the year. Annual import of mango in China is around 28.23 thousand
Mt, valued about $28.98 million (FAO, 2005).
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China has been identified as a major export market for Pakistani mangoes owing to its
large potential of mango consumption. The two governments (China and Pakistan) have
signed a protocol of phytosanitary requirements for exporting mangoes from Islamic
Republic of Pakistan to the People’s Republic of China (Annex 2) in a meeting of
General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ),
China and Ministry of Food, Agriculture & Livestock (MINFAL), Pakistan in Beijing on
3 rd November, 2003. Also a free trade agreement (FTA) has been signed by the two
governments at Islamabad on 24 th November, 2006 to promote the trade between the two
countries (available on www.minfal.gov.pk).
3. New Market Development Research in China
3.1 Project Research Team for New Market Development Research in China
The ASLP mango supply chain management project research team for market research in
China was comprised of following four persons, one being from Australia three from
Pakistan.
1. Dr. Timothy Sun (Project Research Officer ASLP, University of Queensland,
Australia)
2. Mr. Muhammad Sohail Mazhar (Project Development Officer, ASLP, Pakistan)
3. Mr. Babar Ehsan Bajwa (Manager Technical, Pakistan Horticulture Development
and Export Board)
4. Mr. Sosheel Solomon Godfrey (Programme Officer, ASLP, Australian High
Commission, Pakistan)
Market Development Research Team
ASLP mango supply chain management project team conducted the “New Market
Development Research in China” between September 02 to 12, 2007 (Annex 3) in three
cities (Urumqi, Shenzhen and Guangzhou) identified as potential markets for Pakistani
mangoes.
3

The specific objectives of this activity were as follows
1. Identify the market access issues when entering China
2. Identify the internal distribution channels for Pakistan fruit in China
3. Evaluate both the wholesale and retail market opportunities within Urumqi,
Shenzhen and Guangzhou and determine the potential way for Pakistan mango
reaching targeted market segment
4. Examine consumer’s perceptions on Pakistan mango, including:
• Identify the factors that influence the purchasing decision– How do people
decide when to buy mango and, having made the decision to purchase,
how do they decide which Variety /brand or domestic/imported to buy?
• Determine the importance, relative and absolute, of mango attributes –
What value do consumers attach to them and why?
5. Identify and evaluate current and potential competitors of Pakistan mango in
the market
6. Financial feasibility analysis for Pakistan mango entering Urumqi, Shenzhen
and Guangzhou.
The research methodology, planned for the activity, included;
• Individual interviews from people including importers, wholesalers, retailers and
consumers, Custom and Quarantine officers, freight forwarders and transport
companies
• Two Focus group discussions
• Market observation: whole sale and retail markets
3.2 Getting the Chinese Visa
The team applied for a Chinese business visa. To apply for such type of visa, one needs
to get an official invitation from an authorized company or local government official in
China. The process should start at least two months prior to the planned visit.
For official tours, it is easier to come formally through Ministry of Commerce or
Ministry of Food, Agriculture and Livestock (MINFAL) to Ministry of Foreign Affairs
thus getting Note Verbale for the visa.
3.3 Preparation of Mango Consignment
The consignment, comprising of 30 kg mangoes of cv. White Chaunsa, was to be taken to
China with the project team to exhibit at different places. The consignment was prepared
by a research fellow, Muhammad Amin, working on sapburn management at postharvest
research laboratory, University of Agriculture, Faisalabad.
The fruit was sourced from the orchard of Mr. Saleem Khan Alizai, in Multan, where
they were harvested along with up to six inches pedicles. Desapping was performed
within the field using 1% solution of commercial grade lime followed by washing of the
fruit. The fruit was brought to Iftikhar Ahmed & Co. (IAC), Karachi (IAC is one of the
three approved HWT plants by AQSIQ, China. The two others are Durrani Associates,
Karachi and Questpak, Karachi) for hot water treatment (HWT). HWT (48° C for 60
4

minutes) was given to the fruit and it was packed in six corrugated boxes of 5 kg each. A
HWT certificate was obtained from the processing plant and the quarantine certificate,
being the import requirement of the China, was obtained from Plant Protection &
Quarantine Department, MINFAL (Karachi) before transferring the consignment to
Islamabad. The export procedure for China is given below;
Exporter
Fruit Harvesting
Taken to one of three
approved HWT plants
HWT and certificate of
HWT, Packing
Quarantine certificate from
MINFAL
Export
Importer
Importer obtains the import
permit from AQSIQ
3.4 Travel to China:
Urmuqi is 1720 km away from Islamabad & it is two and half hour flight. Urumqi, with a
population of three million people, is the capital of Xinjiang province, which is one sixth
of the total land mass of China.
The China Southern airline flies thrice a week from Islamabad to Urumqi. The famous
Karakuram Highway or silk road also connects Islamabad to Urumqi via Gilgit, Khunjrab
and Kashgar.
3.5 Custom Clearance in China:
The project team carried a consignment of 30 kg mangoes with them, which was brought
with an aim to have an idea of consumer tastes & preferences as well as to show the
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mangoes to potential importers and also to understand the quarantine drill required to
bring fruit into China.
Although the project team had got the necessary documents to fulfill the quarantine
requirements of AQSIQ, but still the mangoes were held by the quarantine officer at
airport till getting a confirmation from Beijing office of AQSIQ, China.
Dr. Timothy Sun was present at the airport to receive the Pakistani delegates, and the
team traveled together to the accommodation in Urumqi.
3.6 Visit to Urumqi Yuqi Biological Science and Technology and Development Ltd.
The project team conducted a meeting with Ms Lee Chang See, the General Manager of
the company (Annex 4.1). The company deals in fresh fruit import, distribution & export.
This company imports mangoes mainly from Thailand & Philippines, repacks & reexports
mangoes to Singapore and others. In near future the company is planning to enter
the central Asian countries as well. The GM of the company expedited that they carried
out the market promotion of Pakistani mangoes three years back in Shenzhen, China. The
experience was not good because the appearance and the packing of the fruit were very
poor; however the taste of mango was not bad. The company showed willingness to
support import of Pakistani mangoes but with the involvement of such an agency which
should ensure the quality of the produce.
Ms. Lee Chang See at her Office Project team at the Coldstorage facility of YUQI
The quality characteristics as desired by the company are given as under:-
1. Blemish and scratch free surface, physical appearance and uniformity in size.
2. Weight of fruit ranging from 500 – 750 g.
3. Effective pre-cooling and transport in reefer container to maintain the fruit
quality.
4. The fruit should have yellow color with blush (20%).
5. The preference of the importer was to have stickers on the Pakistani mangoes.
6

Further, Ms Lee provided the following information to the project team;
• The cost of freight from Urumqi to Guangzhou or Shanghai is 550Yuan per ton
and each container carries 25-30 tons.
• Travel time between Urumqi to Shenzhen by road is 6 to 8 days.
• Air freight charges from Islamabad to Urumqi are 8.5 Yuan (Rs. 68) per kg.
• Cost of packing is 1 Yuan per box & the cost of 8-9 kg box is 4.5 to 6 Yuan (the
price varies as per quality of packing).
The project team visited the vineyard of Ms Lee Chang See, where the harvesting,
grading and packing of fruit for domestic as well as export market was being practiced.
Vineyard of Ms Lee Chang See Temporary packhouse established at vineyard
Ms Lee requested the support of Pakistani partners to establish an export market of these
grapes in Pakistan.
Also the project team visited the under construction cold storages of the Urumqi Yuqi
Biological Science and Technology and Development Ltd., which has a blast chiller of 60
tonnes capacity along with nine cold rooms of 60 tonnes each having the facility of
adjustable temperature and humidity at different levels.
The postharvest handling flow chart of the Red Globe grapes is as follows
7

Postharvest handling of Grapes
Harvesting with clippers in the field
plastic bins of 20 Kg
Carriage to the field
packing shed on trolleys
Grading and removal
of deformed berries
Weighing
Packing (Polyethylene
bags) : 2 Kg
Packing (Polystyrene
boxes): 9-10 Kg
Transportation to the
respective markets
3.7 Visit to Plant Quarantine Office, AQSIQ, Urumqi, China
Price: 70 ¥/10 Kg
Mr. Yimit Rosol, Plant Quarantine Officer (Annex 4.2), gave a briefing to the project
team on behalf of AQSIQ. He defined the following requirements for the export/import
of Mango and Citrus in China;
1. The Chinese importer has to apply for the import permit with AQSIQ at least one
month prior to the import of consignment from Pakistan.
2. The phytosanitary certificate from MINFAL and a hot water treatment (HWT)
certificate from one of the approved HWT plants by AQSIQ must come with
other documents of the consignment.
3. The phytosanitary certificate should have written the statement given in the letter
of AQSIQ to the project team (Annex 5).
8

Meeting with AQSIQ officer
3.8 Visit to the Superstores/markets, Urumqi
The project team visited the major superstores of Urumqi to explore the opportunities and
to evaluate the potential competitors of Pakistani mangoes in the retail market of Urumqi.
They also observed the comparative prices of mangoes available on display in different
superstore chains. Following is the feedback taken from different superstores.
Colour mango on display in retail stores Apple mango on display in retail stores
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Superstore Variety Origin
Description
Skin Colour Appearance Sap Grading Disorder Price
Carrefour Color
Mango
Domestic Yellow, Red
Blush
Smooth No Yes Lenticel
spots
15.8 ¥/Kg
5-6 ¥/piece
Hou Gia
Xiang
Color
Mango
Domestic Yellow, Red
Blush
Mixed
(smooth &
No Yes Blemishes
&
9.98 ¥/Kg
rough)
softness
Apple Domestic Green & Rough No Yes 16.80
Mango
Yellow
¥/Kg
Jiajiale
Chain
Color
Mango
Domestic Yellow with
blush
Mixed No Yes Softness 12.8 ¥/Kg
Wet
Market
Color
Mango
Domestic Yellow, Red
Blush
Nonuniform
Present
on some
No Softness
and
14 ¥/Kg
mangoes
bruises
General Observations
• Only the domestic mango varieties (Color mango being dominant and Apple
mango at small scale) were available in fresh fruit markets of Urumqi.
• The average sale of mangoes depends on the level of market, i.e., the average sale
per day of low end markets is less than high end markets.
• Average mango weight per piece was recorded 700 g for both the Color mango
and the Apple mango.
• The packing of six mangoes is preferred (also people like to purchase in even
numbers) for gift purposes.
Colour mango on display in Wet market Weight of a sample mango fruit is nearly 900 g
3.9 Meeting with the Management of Xinjing New Cooperation, Jiajiale Supermarket Co.,
Ltd. (NCS)
The superstore chain had many outlets throughout the country and the one visited by the
project team had a total area of 184,000 square meters & 32,000 items were displayed for
selling on the shelves. The management told the team that they already have initiated a
partnership in Pakistan and is going to open its outlets in Islamabad and Lahore on 10th
of March 2008.
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The General Manager of the company, Mr. Chia Ze Yan (Annex 4.3), and his team
welcomed the project team in their office. After introduction of the two groups, Dr.
Timothy Sun (Project Research Officer) explained the purpose of the visit of project team
to China. Mr. Muhammad Sohail Mazhar (Project Development Officer) gave a
presentation on the mango varieties of Pakistan and their characteristics. The General
Manager of NCS opined that the selling of fresh Pakistani mangoes in the Chinese market
will be a difficult task as compared to value added form due to the availability of
indigenous mango varieties for extended duration. The small mangoes start coming to the
market in March-April, with retail price 8 to 10 Yuan per Kg. However, they appreciated
the features of late mango varieties (End of August-Sept) of Pakistan and added that these
can make a pace in the Chinese market. Further they mentioned that their super markets
cater and target the high income category, therefore require the premium quality. It was
also advised to target the same consumers for introducing the Pakistani mangoes.
Meeting with Management of Jiajiale Super stores Chain
The management of the company offered to provide free space for promotion of Pakistani
mangoes and Kinnow in their markets. They also advised the promotion of Pakistani
mangoes at the moment of Festivals in China which are scheduled every year in end of
September. Since there is a higher demand due to the festivals, the Pakistani late varieties
can capture the Chinese market.
3.10 Visit of Fruit & Vegetable Wholesale Market, Urumqi
The objective of visiting the fruit and vegetable wholesale market was to know about the
marketing channel, the product flow mechanism and the potential of Pakistani mangoes
in the local markets. In order to ascertain the first hand information the two wholesellers
were also interviewed.
The markets operate through government supervised system. The auctioneers/wholesale
agents carry out the selling business while, the supplier gives some incentive to the
wholeseller or to the bidder. The market also depends upon the importers who import
fruit from other provinces of China to this market (source of export to destinations like
Kashgar which links China to Pakistan and Russia). Generally the fruit business is being
carried out in the open vicinity. The hygienic conditions were not appropriate conforming
to food safety standards.
11

Mango wholesalers: briefed by Dr. Tim
There were only two wholesalers, dealing in mango. One of them had got only Chinese
Color mangoes. She told the team that mangoes on display were taken from southern
China, where the harvest season starts in the month of March. The selling price at this
wholesale shop was 13.3 Yuan/Kg. Regarding the consumers preference, she told that
they prefer big mangoes (600g) and average sale was one ton per day, 50% of which goes
to wet markets & variety stores. The wholeseller was unaware of any Pakistani mango
variety and showed interest in importing mangoes from Pakistan. The preferred size was
300-400 g with red or pink blush. The level of firmness was desired as sprung mangoes
& 0-10% yellow color with one to two weeks of shelf life.
Colour mango and Apple mango in wholesale market, Urumqi
The other wholeseller was the supplier to the retailers. He told the group that the
consumer’s demand of mangoes is maximum between May and September (2.5 tons/
day). Average price of good quality mango ranges from 13-16 Yuan per Kg and the profit
margin of wholesaler was 1-2 Yuan per Kg. The person showed keen interest to source
mangoes from Pakistan with a medium size (300-400gram), hard mangoes at color stage
of 0-10% yellow skin.
12

3.11 Meeting with Freight Forwarderer: Railways Department Urumqi
This meeting was scheduled in order to ascertain the possibilities of rail transport and to
understand the possible transport mechanism within China.
The contact person told the team that the refrigerated trains are available in China
traveling from Urumqi to Guangzhou, Shanghai or other parts of China. The freight
charges in a compartmentalized rail lorry carrying 45 tons weight is 131,250 Yuan from
Urumqi to Guangzhou. Additional costs of 8.6 Yuan per ton (loading cost) and 0.50 Yuan
per ton (road maintenance cost) add up for the total cost of freight through rail. The travel
time from Kashgar to Guangzhou is 10 days by train. There exist possibilities for the road
and rail transport but all depends upon the cost effectiveness.
The freight costs calculated back in Pakistan by PHDEB for export to China are given in
Annex 6.
3.12 Running the Focus Group 1, Urumqi
The Pakistani team got their mangoes from AQSIQ on September 05 after fulfilling the
quarantine requirements of China. The AQSIQ had taken some samples from the
consignment to observe if all the quarantine requirements were meeting.
The project team ran the first focus group in the office of Yuqi Biological Science and
Technology and Development Ltd. Urumqi. Purpose of the focus group meeting was to
undertake the sensory evaluations of the Pakistani late Chaunsa variety (White Chaunsa).
The focus group was comprised of six women from different areas, who had previously
experienced eating mangoes.
Feedback
Pakistani mangoes in Urumqi First Focus Group, Urumqi
1. The middle income group generally buys mangoes for their children, on festivals
or as gift whereas low income group does not buy mangoes at all.
2. The ladies had no experience about Pakistani Mango.
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3. The size of Pakistani Chaunsa was liked very much by the focus group
participants.
4. The preference on color was full yellow, a bit soft & sweet. The golden color was
liked most.
5. The price of 10 Yuan per Kg was acceptable to the participants.
6. At special events, like Chinese Moon & Spring festivals (mid September) even
more price was also acceptable.
7. The number of fruit in each box should be of even number that is 6 or 12 mango
fruits per box.
It was further revealed from the focus group meeting that the Chinese market is new for
the Pakistani mangoes. If the Pakistani exporters manage the supply of good quality
mangoes, the market is certainly big and open for Pakistan.
The focus group meeting was followed by informal discussions on various issues of trade
of perishables between Pakistan and China.
3.13 Visit to Golden Wing Mau (GWM) Agricultural Produce Co Ltd., Shenzhen China
The GWM is dedicated to fresh produce export, import, wholesale and distribution to
supermarkets, to become an integrated agricultural produce corporation with produce
development in origin, distribution and logistics and terminal sales. The company claims
to be the largest importer and distributor of fresh produce throughout China. The
company supplies fresh produce in 20 cities of China and its main buyers include Wal-
Mart, SAM’s Club, METRO, JUSCO, Lotus, Hymall, CARREFOR and some Chinese
superstore chains.
Meeting of Project team with GWM Management
The ASLP team briefed the company about the Mangoes of Pakistan. The quantity of
production, export and the time window was also discussed with the company’s
executives. The company has already been importing the Pakistani Kinnows. The
company executives also informed the ASLP team that the major functions of export to
Chinese markets were presentation of the fruit, attractive packing, cost effectiveness and
above all the taste where consumers are most important to make choices. The project
14

team was told that the company has been importing mangoes from Australia, Philippines,
Thailand, Taiwan & Brazil. The Brazil mango has taken its position in the China market
for the reason of late variety and supply at the time of moon festival (Mid September).
Regarding the presentation of mangoes the following information was shared with the
team:-
Appearance and General Characteristics
1. The Chinese market prefers rich taste of mango (strong taste sensation)
2. Good pink/red blush (20-30% red or blush firm / hard mangoes and 10-30% of
yellow color ripening stage)
3. Preferable size of around 600grams
4. Mangoes to be 70% ripe at the importers destination (China)
5. 7-8 days shelf life is required after reaching the importer
6. Mangoes with stickers (pasted on skin) in order to distinguish from local produce
Mango Prices at the Superstores
1. Brazilian mango, 40-80 Yuan per 5 Kg box
2. Philippines mango, 120-180 Yuan per 12 Kg box
3. Thai mango, 70-80 Yuan per 5 Kg box
4. Taiwanese mango, 80-120 Yuan per 10 Kg box
5. Australian mango, 180-220 Yuan per 10 Kg box
Country Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
China √ √ √ √ √ √
Taiwan √ √ √ √ √ √
Philippines √ √ √ √ √
Brazil √ √ √
Australia √ √ √
Thailand √ √ √ √ √ √ √ √
The project team assured the company that the involvement of project and PHDEB will
help them obtaining desired quality at the destination, and it was mutually decided to
undertake trial studies in the coming crop season (2008).
3.14 Visit to WalMart, Shenzhen
The project team visited the two different outlets of WalMart in Shenzhen to explore the
opportunities and to evaluate the potential competitors of Pakistani mangoes in the retail
market of Shenzhen. The team also observed the comparative prices of mangoes
available on display in different superstores. Following is the feedback taken from the
visit;
15

Philippine mangoes and Domestic mangoes on display in Wal Mart, Shenzhen
Character
Variety
Philippine Mango Chinese Mango
Skin Colour Green and Yellow Yellow with blush
Size Small (250 g) Medium (500 g)
Appearance Smooth Smooth
Sap No No
Uniformity Graded for size Graded for size
Specific Observation Mangoes suffering from softness The appearance was not uniform
Price 41 Yuan/Kg 20 Yuan/Kg
3.15 Running the Focus Group 2, Shenzhen
The Pakistani mangoes arrived Shenzhen on September 09, 2007. The mangoes were
fully ripe at this stage and the colour was 100% yellow, even some of the mangoes had
turned soft due to over ripening. The project team took the mangoes to a family
apartment, where three women and three men participated in the focus group.
The objective of this focus group meeting was to undertake the sensory evaluations of the
Pakistani Chaunsa variety among the customers of this city. Since, Shenzhen is one of the
high income cities within China, and the customers have buying/purchasing power as
high as 41 Yuan/Kg (as reflected during the retail market visit – WalMart), so, knowing
the consumer’s preference for mango is very important.
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Highlights
Pakistani mangoes in Shenzhen Second Focus Group, Shenzhen
1. The retail price of mangoes from mid May to mid July is 3-5 Yuan per Kg and the
price increases after July.
2. One of the participants liked the Pakistani white Chaunsa as it had strong flavor.
3. One of the participant told that this Mango resembles in taste like Durian fruit.
4. One of the group participants informed that she purchases 2 to 4 pieces of
mangoes every day while another told that she buys mangoes once or twice every
week.
5. The focus group revealed that mostly people purchase mangoes at least once
every week during the peak season & there is no particular reason to buy
mangoes.
6. Most of the Chinese people buy certain variety where as rest buy on appearance
and presentation on the shop.
7. The focus group highlighted that important attributes to buy mangoes are variety,
color (red & yellow), firmness and cost. Regarding the taste the group informed
the ASLP team as “the most important and develops consumer’s loyalty to a
certain variety”.
8. One of the group participants disclosed that he would check aroma of the mango
before buying. Regarding the pricing of Pakistani Mangoes the group informed
the ASLP team that if Pakistani mangoes taste sweet and give aroma they can pay
the price up to 12-16 Yuan/Kg.
9. The group members also mentioned that sticker on mangoes is important and
symbolic of good quality.
3.16 Meeting with General Manager, Shenzhen Agriculture Products Logistics Co.
Ltd., Shenzhen, China
The Shenzhen Agriculture Products Logistics Co. Ltd., Shenzhen operates through the
network of farms in China and supplies the fruits and vegetables to different cities of
17

China through JUSCO, WALMART, CARREFOUR, SAMS CLUB, Trust Mart (China)
and A-best (China).
Mr. Fang Li Zun, the General Manager of the company met the project team in a hotel.
Dr. Timothy Sun (Project Research Officer) described the objectives of the project
activity and introduced the mago varieties of Pakistan to Mr. Fang Li Zun. Also Mr Zun
evaluated the Pakistani Chaunsa mangoes and disclosed that “Ta Thai Long is a
Taiwanese variety of mangoes imported to China and it tastes similar to the White
Chaunsa”.
The company was keenly interested in the route & travel time to Shenzhen along with
costs of Pakistani Mangoes. The possibilities of by sea transport of mangoes to China
were also discussed. (A study of PHDEB on routes and cost of export to China is
attached as Annex 6).
Mr. Fang evaluating the external fruit quality Mr. Fang evaluating the internal fruit quality
The possibilities of trading Pakistani Kinnows in China were also discussed during the
meeting. The company showed keen interest in import of Kinnows from Pakistan. The
Manager Technical, PHDEB also gave briefing about the harvesting season, price, quality
and quantity of Kinnows.
Mr. Fang the General Manager of the company also showed interest to visit Pakistan in
February 2008 to see the Kinnow Industry of Pakistan. He suggested that we need to
promote two way trade in the interest of both countries. He wished to be linked up with
Pakistani exporters and processors.
3.17 Visit of Shenzhen Agricultural wholesale market
The Shenzhen Agriculture Products Logistics Co. Ltd also operates the wholesale market
in the Shenzhen. The project team was welcomed at the wholesale market of Shenzhen
by Mr. Fang and was introduced to the management of the market. The whole group
visited the wholesale shops in the market to evaluate the potential of Pakistani mangoes
in this market. It was observed that imported mango was also displayed on some
wholesale shops; particularly the Australian R2E2, imported from Taiwan was being sold
at wholesale price of 18.8 Yuan per Kg. Similarly the market was abundant in supply of
Australian Murcot mandarin being sold at 18 Yuan per Kg. Navel Oranges from South
18

Africa (Capespan) were being sold at wholesale price of 13.8 Yuan per Kg. (It reflects
the enormous potential of Pakistani Mango and Kinnow in these markets, provided
mango are supplied in end of August and Kinnow in End of March)
Meeting of project team with management of Shenzhen Agricultural wholesale market
Dr. Timothy showed the White Chaunsa variety to the wholesalers which was evaluated
for sensory parameters. The contact persons informed that grading is very important for
Pakistani mangoes to enter in this market. Similarly, the number of count in each box
must be of uniform size and weight.
Quality evaluation at wholesale market, Shenzhen
3.18 Visit to Guangzhou Jiangnan Fruit and Vegetable Wholesale Market
Development Co Ltd.
This market is one of the largest wholesale markets in China. The market operates by
different segments divided by the origin of the produce. Different countries had their
sections in the market and their fruit comes in their section and gets sold by the company
operators through profit sharing percentage. Mr. Guan, the General Manager Assistant,
was given a briefing by Dr. Timothy Sun regarding the activities of the ASLP project and
the purpose of the current activity. The White Chaunsa mangoes were also presented to
the General Manager, who liked the taste and welcomed the import of Pakistani mangoes
to this market.
19

Meeting of project team with General Manager of Guangzhou wholesale market
The highlights of the meeting are given as under;
1. The Jiangnan fruit market offered the support to promote the Pakistani mangoes,
provided the PHDEB develops understanding with their company
2. The company also offered Pakistan to set up its section in the market
3. The General Manager of the company asked for invitation to Pakistan by PHDEB
for his visit to mango Industry of Pakistan in end of May 2008
4. Consumer’s Section
China is not a homogeneous market. There are huge differences in markets between
Xinjiang and Guangdong. As a result the marketing strategy should be different between
these two provinces.
Market of Xinjiang
In Xinjiang, the volume of mango consumption is much less than Guangdong. This is
because
1) Xinjiang itself produces a large amount of fruit which has very cheap retail
prices (For example grapes 2 Yuan / kg, Melon 0.5 Yuan/ Kg) and can be as
substitute for Mango,
2) Most male in Xinjiang are not used to the flavour and taste of mango, which
results in female as the main consumption group
3) the income in Xinjiang is relative lower than other provinces near the coast
areas and its purchasing power has limitation
4) Xinjiang has much less population than Guangdong. As a result the market is
relative smaller.
However, people in Xinjiang regard Mango as a luxury fruit, which has been used
regularly for gifts. In the focus group conducted in Urumqi, one mentioned that many
government organizations (such as taxation, legal system and police) or state own
monopoly companies (such as power supply, banks, petroleum, airline,
telecommunication and railway) are often purchased luxury fruit for their staff as fringing
20

enefit. This purchase is happened before Chinese festivals such as spring festival, moon
festival, Chinese national day and New Year. Focus group also indicated that some
wealthy consumers (women in particular) will buy mango regularly regardless the price.
A taxi driver indicated that the mango price in winter can be as high as 90 RMB per kg.
However price in May or June can be as low as 4 RMB per kg.
In the interview of 9 taxi drivers in Urumqi, five mentioned that people in Urumqi had
the concept that all the mangoes taste the same. Taxi drivers believed that most people in
Urumqi had tried only one varieties of mango in their life time. This was often in the pick
season when price was very low. Often the mango they tasted was not so good due to
farmer’s deliberately harvesting very early so that the fruit was not easy to decay during
the long distance transport from South China to Xinjiang. Three taxi drivers interviewed
indicated that the mango they had before was not sweet at all. They also mentioned that
they only try once in a year. This point was confirmed in the focus group that low income
people do not purchase mango at all.
Given the conditions of Xinjiang market described above, the marketing strategy in
Xinjiang should focus on wealthy people and top markets. Due to people in Xinjiang do
not have experience in good quality of mango, promotion is needed. Mango quality is
absolutely essential given most buyers for gifts. Pakistan companies need to work with
local retailers to deicide what packaging is best to suit local taste.
Market in Guangdong
Guangdong is the richest province in China. People in Guangdong are used to tropic fruit
such as mango. They love mango and it has become one of the important fruit for most
people in Guangzhou. As indicated in the focus group, most people purchase mango at
lest once a week regardless seasons. The consumption of mango is therefore much larger
than Xinjiang. Mangoes are used mainly for self-consumption. Some are used for gift.
However the proportion of mango used for gift is much less than Xinjiang.
People in Guangdong have experienced all different variety of mangoes from different
countries. They know which variety is better than another and they know how to choose
mango in the markets. Two ladies in the focus group described the process of the way
they chose mango. For a new variety, they judged by the appearance. If the appearance is
attractive (free of blemish, golden or yellow in color, even in size), they will try some. If
they like the taste and flavor of the new variety, they will stick to it. If not they will not
buy it anymore. Once they like the taste and flavor of a new variety, the appearance of
the fruit is becoming less important to them. They can tolerant some defects on the fruit
surface if they purchase for self-consumption. The mango has to be perfect if used for
gift. This point was confirmed by visiting supermarket where the Thai mango was
displayed with less attractive appearance but high price. This is purely because some
people like its taste and flavor.
Pakistan mango is new to people in Guangdong. However results from sensory
evaluations of the Pakistani Chaunsa variety in focus group discussion showed very
promising sign. The common comment is that Pakistani mango is sweet although its
texture is not as smooth as other mangoes which are much less or no fiber. A participant
21

in the focus group indicated that she likes to pay 3 to 6 Yuan extra per kg for Pakistani
mango in the markets because of the sweetness and flavor.
Given the situation in Guangdong province, the marketing strategy has to start with
promotion. The promotion is not just let people know that a new variety mango is
coming. It has to give people opportunity to try it. The target group should be much wider
than Xinjiang, given the most people purchasing mango regularly. The quality of mango
for promotion has to be perfect in both appearance and taste.
How to send mango to these markets?
• Local Infrastructure and transport
• Cooling system
• Cost
• How many days
Karachi
Way of transport Days needed
------------- By road or train 14 – 16 days
------------ By air 1 – 2 days
_______
By sea 20 – 22 days
5. Conclusions
Islamabad
• China is a huge potential market where high quality fruit is imported from all the
countries of the world and the consumers can certainly afford to buy Pakistani
mangoes.
22

• Chinese quarantine laws are very strict and it is important that quarantine
requirements must be met. (A pre shipment inspection is necessary for export to
China).
• All three hot water treatment plants, certified by AQSIQ, are based in Karachi which
is a barrier for export of mango from Punjab. The mango will need to be brought to
Karachi first for treatment prior to export to China.
• It is highly advisable that PHDEB endeavours promotion of citrus & mangoes in the
coming seasons using the platform & expertise of ASLP mango supply chain project.
Delegation of exporters can be arranged for promotion of mango & citrus in China.
• Late harvest of Pakistani mango i.e. any time after 10 th September nearing Chinese
moon festival that is celebrated around 20 th of September every year can fetch big
gains.
• Each box should clearly mention the origin of produce & other relevant information
in Chinese language. Each box should contain even number of fruit that is 6 to 12
mangoes per box. Each mango should have a sticker which is important & symbolic
of good imported quality.
• Chinese prefer blush and golden mangoes having average weight of around 500grams
• Retail price and cost of mangoes on arrival should be calculated by doing some trail
shipments as cost is certainly an issue for Chinese importers. Also in road
transportation the enhanced shelf life will be an important issue and needs to be
addressed.
• Competition for fresh Pakistani mangoes is quite significant as China has lots of local
mango varieties and so the key to market our mangoes would be to ensure that we
deliver good quality
6. Follow up Actions
1. A shipment of 8 to 10 ton White Chaunsa mangoes will be sent to China in the coming
mango season in collaboration with either of the following companies in China;
a. Guangzhou Jiangnan Fruit and Vegetable Co. Ltd.
b. Shenzhen Agriculture Products Logistics Co. Ltd.
c. Golden Wing Mau Agricultural Produce Co. Ltd
d. Yuqi Biological Science and Technology and Development Ltd.
The PHDEB with support from ASLP will undertake this activity with the leading
exporters (approved HWT plants) of Pakistan. The ASLP Mango Supply Chain
Participants (Pakistan Side) will take the responsibility for ensuring the fruit quality.
2. These companies will be invited to visit Pakistan’s horticulture industry (as desired by
the companies) in order to have a mutual interaction and sustainable partnerships for
horticulture business between the two countries.
3. For the promotion of Kinnow from Pakistan, the New Cooperation Jiajiale Chain
Supermarket Co., Ltd. (NCS, China) has already agreed to provide the free space to
Pakistani Kinnow suppliers. Therefore a delegation comprising the leading Pakistani
23

Kinnow exporters has to be organized under the umbrella of PHDEB to undertake the
market promotion in China (2007-08 Kinnow crop year)
4. PHDEB will follow up with the planning of activities in collaboration of support from
Dr. Timothy Sun, University of Queensland, Australia.
7. Acknowledgements
The research team is thankful to the ASLP, ACIAR project leaders from Australia (Dr.
Ray Collins, University of Queensland, Australia) and Pakistan (Muhammad Iqbal,
PHDEB) for planning, support and sponsor of this activity. The role of Dr. Timothy Sun
was tremendous to organize the scheduled events and to link Pakistan to the best
horticulture business industry in China.
24

Annex 1: Fact Sheet about China (PRC - People’s Republic of China)
The world’s most populous country, China is a society in transition. It is an emerging
global superpower, and maintains a permanent seat on the UN Security Council. Though
nominally communist, the ruling Communist Party began liberalizing the economy in the
80’s and China is now one of the major players in global trade. Though almost half of
citizens depend on agriculture for their livelihood, recent economic growth has been
largely urban-based, drawing waves of poor rural farmers to migrate to the country’s
many massive cities.
Size
Land 9,596,960 sq km
Population
Languages Spoken
Type of Government
China and the United States are almost equal in size, and both
claim to be the world’s third largest nation.
Over 1.3 billion, though current population growth is relatively
low (0.59%) partly due to the government’s enforcement of a
“one-child policy”.
Mandarin Chinese is the official language, but local languages
like Cantonese, Mongolian and Tibetan dominate large portions
of the country. One fifth of the population is currently learning
English, and it is estimated that within 20 years the Chinese
English speaking population will outnumber native speakers in
the rest of the world.
The People’s Republic of China is most often referred to as a
“communist state.” Though the economy has become
increasingly capitalist in recent years, the Communist Party of
China (CPC) still exercises authoritarian control over the
country. There is little meaningful opposition to the CPC in most
elections, though it is increasing at local levels. The government
is harsh in its treatment of political dissidents and organized
25

Religion
Gender and Health
Issues
Environment and
Resources
Economy
resistance, but also has maintained public support by delivering
economic improvement for some portions of the population.
China ranks in the middle of the corruption index, sharing its
score of 3.3 (10 being the least corrupt) with India, Egypt,
Mexico and Saudi Arabia.
China is the only officially atheist country in the world and 59%
of the population identify themselves as non-religious. Still,
traditional beliefs of Confucianism and Taoism play a sizeable
role in Chinese culture. Small percentages of Buddhists,
Muslims, Protestants and Catholics, number in the tens of
millions. As many as 100 million followers of the Falun Gong,
self described as a “spiritual practice” rather than a religion,
experience regular persecution by the government.
Because of the “one-child policy” and the cultural value placed
on male children, by 2020 China is expected to have 30 million
more men than women due to sex selective abortion, adoption or
abandonment of female children, and even infanticide. Abortion
is legal on request (there have been allegations of forced abortion
and sterilization campagins) and contraceptive use amongst
reproductive age women is extremely high at 83.3%. There is a
large gap in literacy between men (95.1%) and women (86.5%).
Health care in China is not universal, though life expectancy has
more than doubled since 1950.
China faces a number of serious environmental issues caused by
overpopulation and rapid industrial growth. Water pollution and
a resulting shortage of drinking water is one such issue, as is air
pollution caused by an over-reliance on coal as fuel. It has been
estimated that 410,000 Chinese die as a result of pollution each
year. Deforestation and desertification are also issues. The
country’s rivers constitute the largest potential source of
hydropower in the world.
China is the world’s fourth largest economy. Per capita GDP is
$6,800/year, though the poorest 10% of families earn only 2.4%
of total income, while the richest 10% earn 30.4%.
Currency Ex. 1 Yuan (RMB) = 8 PKR = 0.13US$ (approx.)
International Aid
Received:
Receives US
Counterterrorism
Assistance:
Death Penalty:
$1.4 billion, or about $1 per person in 2001
China has worked with the US on a number of international
counter-terrorism measures.
In use for violent as well as non-violent crimes like tax evasion
and corruption.
Top Five Industries: Mining and ore processing, machine building, weapons, textiles
26

Poverty Rate:
McDonald’s
Restaurants:
and apparel, petroleum
10% reported to live below the official poverty line, though
46.7% of the country lives on less than $2/day
Since 1990
Military Spending: 4.3% of GDP – 22nd highest rate worldwide
Human Trafficking
Situation:
Media
Though China is a source, transit and destination country for
international trafficking, the most significant trafficking problem
is domestic, with as many as 25,000 vicitims each year. The
problem is exacerbated by government imposed restrictions on
movement within the country, which allows for exploitation of
illegal migrants in cities, as well as by the imbalance of malefemale
population, which motivates trafficking of women as
brides.
China ranks 159th out of 167 on the Reporters without Borders
press freedom index. Almost 10% of the population are internet
users, though the government censorship of websites recently
prompted Google to develop a special pre-censored version of its
search engine for the country.
Regions 23 provinces, 5 autonomies and 4 state Cities
Weather Tropical in south to subarctic in north Inner Mongolia
27

Annex 2: Protocol of Phytosanitary Requirements for Exporting Mangoes from
Pakistan to China
28

Annex 3: Program Details
Day Activities
2 Sept (Sun) Arrival of Pakistani research team in China
(Urumqi)
3rd Sept (Mon) Interview importers
Interview custom officers
Interview quarantine officers
4 th Sept (Tuesday) Visiting fruit wholesale and retail markets
Interview superstore management
Interview transport companies and freighters
5 th Sept (Wed) Interview wholesalers and retailers
Running a focus group
6 th Sept (Thursday) Travel to Shenzhen
Meeting with fruit importers and distributors
7 th Sept (Friday) Visit of superstores chain (Wal-Mart)
8 th Sept (Sat) Free day
9 th Sept (Sun) Running a focus group
Meeting with GM, Shenzhen Agriculture
Products Logistics Co. Ltd
10 th Sept (Mon) Visit Shenzhen Buji Agricultural product center
and interview wholesalers and distributors
Travel to Guangzhou
Visiting Guangzhou Jiangnan fruit and veg
wholesale market & Meeting with GM, market
administration
11 th Sept(Tues) Sosheel, Sohail and Babar fly back to Urumqi
Tim fly out from Guangzhou to Singapore
12 th Sept (Wed) Sosheel, Sohail and Babar fly out from Urumqi
to Islamabad
33

Annex 4: Contact List
4.1. Ms Lee Chang See, General Manager, Urumqi Yuqi Biological Science and
Technology and Development Ltd. Email: Lijg4299@263.net , Website:
www.naturetop.com.
4.2. Mr. Yimit Rosol, Plant Quarantine Officer, AQSIQ,Urumqi, China. Ph: 0991-
4639396, Email: yimitjan@sina.com
4.3. Mr Chia Ze Yan. Xinjing New Cooperation, Jiajiale Supermarket Co., Ltd. Email:
zjb@ncsjjl.com, Web: www.ncsjjl.com.
4.4. Mr. Giang Lai, Fruit wholesaler, Urumqi. Ph: 13039466583, 13999403052
4.5. Mr. Mau Wah. General Manager, Golden Wing Mau Agricultural Produce Co Ltd.,
Shenzhen China. Email: exp@wingmau-fruit.com, Web: www.wingmau-fruit.com,
4.6. Mr. Fan Li Zun. General Manager, Shenzhen Agriculture Products Logistics Co.
Ltd., Shenzhen, China. Email: lvtian@vip.163.com, Web: www.ps-cz.com
4.7. Mr. Zhiqiang Guan General Manager Assistant, Guangzhou Jiangnan Fruit and
Vegetable Wholesale Market Development Co Ltd. Email: jnpfsc@vip.163.net
34

Annex 5: Letter of AQSIQ
35

Annex 6: Freight Costs
A: Export to China by Road
Export to China by road freight is undertaken through Sost border. The Pakistani
transport can go till Kashgir or Taxurgan, where from the produce changes hands and is
transported in different vehicle. The transit time for travel from Karachi to Taxurgan is
seven to eight days and it takes another three to four days from Taxurgan to Biejing.
Similarly, it takes about eight days from Karachi to Kashgir, where from Urumqi is three
days travel and Shenzhen/Guangzhou is about six days travel.
The produce can be transported from Karachi to Rawalpindi in some private vehicle and
NATCO provides transportation from Rawalpindi to China (Taxurgan/Kashgir). Within
China, railway and other transport (reefer/non reefer) is available.
Freight Cost
Karachi to Taxurgan Rs. 170,000/-
Reefer & GenSet Rent Rs. 60,000/-
B: Air Freight
Air Company No. of Flights/Week Freight Cost
Air China 1- Karachi to Beijing Rs.90/Kg
PIA 2- Karachi to Urumqi Rs. 85/Kg
Southern China Islamabad to Urumqi Dose not carry Fresh Fruit.
C: Sea Freight
The available information for subject shipments by sea in 40’ Ref Container: -
S/No. Shipping Co. Freight US$ Transit Time
1. Maersk Line 1800-2000 14-18 Days
2. APL 2500 22-24 Days
3. Wan Hai 1700 12 Days
4. Shangai 1700 16-18 Days
36

The cost structures and possibility price in the markets of 5 kg mangoes are as follows;
Road transportation
Freight Charges of Refrigerated
Container (Karachi to Khunjrab) = 34
Internal distribution cost in
China;
Khunjrab to Urumqi = 36
Khunjrab to Shenzhen = 68
Farm gate price of Mango =
250
Transportation (Multan to
Karachi) = 20
Processing (Desapping, HWT,
Grading and Packing) = 85
Air Freight Sea Freight
Freight Charges (Karachi to
Urumqi) = 980
Internal distribution cost in
China;
Urumqi to Shenzhen = 64
Total Cost = 425 - 460 Total Cost = 1399
Possible wholesale price in
China = 85 - 92
Possible wholesale price in
China = 280
Freight Charges 40’ container
(Karachi to Beijing) = 25
Internal distribution cost in
China;
Beijing to Urumqi = 10
Beijing to Shenzhen = 10
Total Cost = 390
Possible wholesale price in
China = 78
37