Network of Asia and Pacific Producers (NAPP) has 26 Fairtrade certified SPOs supporting over 5000 small producers producing a wide array of FT products such as tea, coffee, fresh fruits, spices, and nuts. Though the industrial production in the country has returned to pre-pandemic levels and the local retail sales have picked up, the Fairtrade small-scale producers struggle to benefit from the recovery as their business is export-oriented, with the US and EU as their major export destination. Due to the lockdown in the initial phases whilst the producers had to deal with the shortage of laborers and shutdown of the operational plant, they were still working on the business orders placed by buyers in 2019. As per the recent survey undertaken by SPOs, the business order from traders have reduced by 30%-50% due to export restrictions in the destination countries. It is likely that the SPOs will be facing more severe challenges in 2021.
While the export-oriented market takes time to recover, the local Agri-consumption in the country has gained over the past few months as crowds started returning to local tourist sites, restaurants, and shops. This was an opportunity for Fairtrade SPOs to focus on developing a more sustainable growth engine at home and to diversify their markets at the same time.
Through Fairtrade, a fund was allocated to support the Fairtrade SPOs in the country to engage in digital marketing in the domestic market. The Project is funded by SECO (State Secretariat for Economic Affairs) in partnership with Max Havelaar Foundation, Switzerland, and is implemented by Network of Asia and Pacific Producers.
Since the outbreak of COVID 19, China’s e-commerce has achieved significant market shares to meet people’s social distancing requirements. Under the project, an e-commerce platform will be developed jointly with Chunbo- a leading food e-commerce company, supplying more than 4000 types of quality and safe foods under 14 major categories to consumers in China, particularly in Beijing where around 30 million population reside.
To increase the income and promote the development of the next-generation farmers, Chunbo has created a “Liangxin Shouhu Dadi Shengchanzhe” Alliance (an alliance of agricultural producers consciously dedicated to the environment and ecosystem), to achieve their common vision of “protecting human health and environment. Up to now, the Alliance has 158 members, who are all hardworking new-generation farmers refusing to use chemical pesticides. The company sources high-quality food products not only from members of the Alliance but also from selected global high-quality food suppliers and its own production bases. Today it has built long-term partnership with embassies of 30 countries and food industry associations and has supplied consumers with local and international high quality and safe food products.
Around 10 selected SPOs will get an opportunity to promote their FT products on the platform for 3 months. NAPP and Chunbo will carry out a marketing campaign to promote organic FT tea in Chunbo ‘s e-trading platform with a special column designated for the promotion of Fairtrade products. If the business gains good shape, the cooperation will continue. The Fairtrade products are selected after the samples have been tested and approved by its cutting committee. Chunbo is the first Chinese E-commerce food platform with a self-owned CMA-certified laboratory. To ensure food safety, the company has built quality control laboratories that meet the national standards for pharmaceutical filling workshops in North and East China, respectively, where professional technicians conduct tests for each batch of the food product delivered to Chunbo, including pesticide residues, heavy metal residues, hormones, veterinary drug residues, preservatives, artificial pigments, etc. An estimate of more than 80,000 batches of products is tested each year to ensure food safety. Since Chunbo is committed to creating a safe food supply chain — from farm to the table, a unique ID is assigned to each product, together with a real-time test report. The whole testing process is traceable.
Simultaneously, 02 Fairtrade SPOs have also been selected as a pilot batch to develop their retail business capacity. As of today, all the SPOs supply their tea to traders in a bulk package. Chunbo will provide technical assistance to the two SPOs to design retail packages, improve technical parameters and specifications to meet consumers’ demands as well as address regulatory measures. Coffee and matcha tea is selected as pilot products, after considering the emerging market trend and the increasing interest of the younger generation.
Since Fairtrade is not registered in China, the platform with Chunbo will be the first time that FT products are promoted in China in an alternative way through e-commerce with appropriate measures to minimize the risks.
The Project will benefit 09 SPOs supporting 1218 members producing Fairtrade certified peanut, goji berry, matcha, black tea, green tea, coffee, and honey
“Before the project, China’s small producers and their SPOs rely on bulk exports led by traders. This resulted in a lower profit margin and strong competition from other producers. With support from the SECO funding project small producers are trying to explore the high-end retail market and capture more marginal profit and diversify their market. Thanks to Fairtrade NAPP for facilitating the access to the SECO fund”- Xinrong Zhao, Chair of Shaoxing Shangyu Graham Tea Farmers Association & Vice-chair of China National Producers Network; NAPP Board Member
