What's Made in the USA and Selling Online in China?

Food from U.S. Farms: It's a New Chinese E-Commerce Trend

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Selling Credit: USMEF

Every month, the U.S. sells thousands of containers of pork to China – much of it byproducts like stomachs, tongues and feet, which might wind up in soups in factory cafeterias. Nobody realizes where that meat comes from (and for the made-in-the-USA brand, that's surely for the best.)

American meat exporters recently had an idea: Why not build the U.S. pork brand in China by selling more of the choice cuts? And why not do it with a splashy promotion via e-commerce giant Alibaba?

Last month, a week-long promotion opened the U.S. pork site on Alibaba's Tmall, a giant online marketplace. A Hong Kong celebrity chef, as well as the chef of the U.S. ambassador to China, offered recipes. The site also featured cute pig cartoons and images of rippling American flags.

Tmall has been tapping into China's craze for food imported from around the world. Last year, it offered flash sales of U.S. cherries (168 tons sold) and Alaska seafood (50 tons). Figures on the frozen pork promotion are not yet available, but the U.S. Meat Export Federation, which organized it, said it had 400,000 viewers in the first few hours.

While savvy U.S. consumers seek out locally grown food, many in China would rather eat products flown in from halfway around the world. That's because China has had too many food safety scandals to count, from tainted baby formula to exploding watermelons to cooking oil scooped from the gutter and recycled. (Even Walmart was caught selling fox meat here when it was supposed to be ... donkey.)

Eating imported food is also part of living the good life in China, which just became the world's biggest market for red wine. Curiosity plays a role too.

"To many Chinese consumers, Western food is a big part of Western culture, and they're very interested in that," said Julia Q. Zhu, founder of Observer Solutions, which does e-commerce and technology research in China and Asia. Ms. Zhu, who used to work for Alibaba, says online sales of perishable imported foods are still small – and likely limited for now by issues with maintaining the cold chain during transport in China -- but have potential.

Some food for thought for U.S. farmers and food brands: As Alibaba prepares for a U.S. initial public offering, China's e-commerce sales have surpassed, or are soon set to surpass, those in the U.S., depending on who's counting.

Food and drink sales are one of the fastest growing categories in China – Euromonitor International put them at $6.7 billion in 2013 and forecast the figure will quadruple by 2018.

Chinese online grocer Yihaodian, majority-owned by Walmart, also does brisk sales of imported food. But Tmall's sales are unusual because it's not specialized in groceries. Accounting for nearly half of the Chinese e-commerce market, Tmall sells everything from Nike shoes to Samsung phones. The U.S. equivalent of the pork sale might be a flash sale of frozen Chinese dumplings on Amazon.com's front page.

Joel Haggard, the U.S. Meat Export Federation's senior VP for Asia-Pacific, noted that much of the U.S. pork shipped to China is byproduct that winds up first at frozen wholesale markets before being served in places like factory canteens.

"We have been trying to get more product in front of consumers with the country-of-origin label on it," he said.

The pork promotion, touted on TMall's front page, allowed the federation to share recipes, videos, information on safety and provenance, and a zoomed-in view of the meat grain.

"It was interesting for us to be able to get in front of consumers and tell our story – much more appealing than conventional advertising, frankly," Mr. Haggard said. Given that, the federation didn't do any advertising outside Tmall. Now it's evaluating the promotion and pondering its next move.

The U.S. pork has won mostly good online reviews, though some complained it was pricey. (Ribs sold for $6.85 a pound, marked down from $12.49 a pound. The accompanying copy noted that ribs are a favorite of fictional Frank Underwood from "House of Cards," which shows online in China.)

A sampling of buyers' comments: "It's the first time I bought U.S. pork, just to have a taste." "It's expensive, but it's safe and delicious."

One user noted that U.S. pork tasted different from homegrown meat and took a jab at Chinese farms: "Maybe it's because (Chinese pigs) live and eat dirtily. The only time they get a shower is before being killed."

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