For many global brands, entering the China market is a very conscious and strategic choice. For others, China chooses the brand.
That was the case for iconic baby food company Gerber. Chinese distributors had been importing its pureed apples, peaches and peas for sale on Alibaba’s Taobao Marketplace long before Gerber considered selling into the world’s second-largest economy. But with sales climbing amongst China’s health-conscious parents, the Nestlé-owned company was forced to take notice.
“I don’t think Gerber really identified China as a market,” CEO Bill Partyka says. “I think the Chinese consumer actually identified Gerber.”
Twenty million babies are born in China every year, according to the CEO, making it the world’s largest market for paediatric nutrition. Amongst the country’s increasingly sophisticated consumer class, new parents are looking for the highest quality baby food they can find. It’s a trend that has only grown since China dropped its one-child policy in 2015. That’s an opportunity for Gerber, which says it sells science-backed, nutrient-dense foods created to support the first two to three years of a child’s life.
Also, as cross-border e-commerce took off in China, a door opened for international brands such as Gerber because they are perceived as safer and of higher quality than the products Chinese consumers can find at home. The distributors on Taobao, with their fingers on the pulse of the domestic market, were the first to sense this opportunity. Once Gerber saw the demand, Partyka says he realized, “We need to take responsibility for developing that business.”
Enter Tmall Global, Alibaba’s dedicated cross-border e-commerce site for foreign companies that want to sell into China.
The site allows companies to access the China market more easily – and more cost efficiently – than if they had established a physical presence there. Already, brands such as Macy’s, Ocean Spray and GNC have opened flagship stores on Tmall Global to tap the surge in Chinese consumption. At the same time, Alibaba’s rigorous vetting procedure for those brands guarantees the integrity of the commerce taking place on the site. That guarantee means customers are more likely to shop there.
For Gerber, a platform that supported brands as well as customers was essential for formalizing its e-commerce business in China.
“We weren’t looking for somebody that could just manage transactions for us,” Partyka says of Tmall Global. “We wanted a strategic partner that we would be together [with] for the long term.”
Gerber’s focus is always on its main value proposition: delivering farm-sourced, nutritious baby food to its customers. The ingredients are grown and the products produced around the USA, mostly in Fremont, Michigan, where Gerber first started 90 years ago. (Swiss conglomerate Nestlé bought the company in 2007.)
Generations of the same families of farmers in Fremont have grown the carrots, sweet potatoes, spinach and other vegetables and fruits that go into the company’s baby food. The farming process is so important that Gerber is constantly testing the soil and evaluating the types of seeds being used. The company rates the farmers on a scorecard to make sure they are in line with Gerber’s highest standards.