WAITROSE’S CHINA SUCCESS

Waitrose, with an annual turnover of £6bn is one of the UK’s most successful supermarket chains and has built a strong reputation for delivering high quality products and customer experiences.

Since the launch of their cross border e-commerce initiative with Avenue51 in 2016 the fast scaling growth trajectory of their market share in Mainland China has been extraordinary. Below is a simplified walk-though of how this was achieved.

SETTING OUT.

During phase 1 the Avenue51 team built a specific China edited list of Waitrose own brand products from their complete inventory list of over 3000 SKUs. The original criteria for this list was only to include products that had a long shelf life (min. 12 months), were relatively compact and could serve as an upgrade replacement for existing products that Chinese shoppers were already buying, rather than introducing novel products that were more natively British (think lemon curd!).

TESTING & LEARNING

After narrowing the list, samples were then sent to the buying directors of a select group of online retailers (operated by Avenue51 or third party retailers forming part of the Avenue51 network) that, due to their proven standards, qualified as potential online stockists.

Reviews came back from the retailers based on a range of product attributes including taste, pricing and packaging. Ultimately 20+ products (Master SKUs) were decided upon and the registration process with Chinese customs to export these products via cross border e-commerce channels was completed by the Avenue51 logistics team.

STOCK PREPARATION

Quantities of stock projected to sell over a rolling 2-3 months period were moved to the Avenue51 ISO9001 certified fulfilment centre (FC) in London. 

Note: To secure the interest of reputable online retailers in Mainland China it is critical to show that the stock is “on hand” and available to ship instantly, and not stored elsewhere. These retailers are highly sensitive to the risk of orders not being fulfilled, as negative online reviews from their shoppers can be highly destructive.

STORES SELLING

Brand assets were localized for the Chinese market and shared with the appointed online retailers to create product pages for their stores. 

Shoppers in China placed orders with these retailers and paid for them in RMB using local online payment gateways including Alipay and Wechat Pay. Payment from these gateways are typically received by Avenue51 in GBP or Euro 28 days after the transaction.

The Avenue51 platform integration with these retailers meant that once orders were placed in their stores the products were being rapidly picked, packed and loaded onto a consolidated air shipment from London to the shopper or retailer (for business to business orders) in Mainland China. Orders instantly began to flow.

ADAPTING

After a few months the transactional data in the Avenue51 online reporting platform started to reveal some valuable buying patterns, with particularly strong demand for honey emerging as one example.

The Avenue51 online retail team observed insights from the reviews and questions being posted by these honey shoppers that enabled them to adapt the brand assets to the shoppers’ interests and further lift demand. These included enquiries related to whether the honey would be suitable for eating with potatoes and being used in skin care regimes. 

At this stage insights being gathered suggested it would be low risk to introduce Waitrose’s range of personal care products. Action was taken and orders for these new SKUs instantly skyrocketed.

IMPROVING FULFILMENT TIMES

For those SKUs with proven, fast growing demand it made sense to move a proportion of the stock into the Avenue51 bonded fulfilment centres (“bonded” simply means the products have not cleared customs yet, therefore import duties have not been paid) in Mainland China. Having the stock closer to the shopper/retailer enabled delivery times to be shortened on new orders, resulting in even higher shopper satisfaction ratings.

The appointed retailers followed suit and started stocking the popular Waitrose SKUs in their own bonded fulfilment centers in China, as they were quite confident in the volume of daily orders being placed by the shoppers. Aside from the obvious benefits this also led to a faster turnaround in payment for the stock.

MARKETING

Marketing initiatives have included providing product samples to micro bloggers (less than 25,000 followers), targeted online advertising based on shopping behaviour patterns and live streaming of shopping experiences from UK Waitrose stores.

TO BE CONTINUED…

In 2020 Waitrose continues to evolve and succeed in Mainland China setting the pace in terms of best practices that can be followed by British and European supermarket chains expanding into one of the world’s most complex and valuable markets.

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