Collaboration with Farmers Offers Value, Quality Control For IGA China

Store: Guizhou Heli Supermarket Corp.
Location: Guizhou Province, China
Annual sales: $700 million
Difficulty: Hard
Submitted by: Zhe Zeng, IGA Representative to China

Strategy

The Guizhou Heli Supermarket Corp. collaborates with growers to provide a greater value to shoppers at a 20-30 percent savings compared to the farmer's markets. Through this initiative, Heli has unified standards in produce consolidation and can provide food from farm to fork in under five hours. 

The above chart shows the store coverage of Guizhou Heli Supermarket Corp in Guizhou Province, China.

Pricing

• 20-30% lower than the farmer’s markets.

WHY IT WORKS

For Our Shoppers

Fresh and less expensive. Tucked away among the cloud-capped mountains, Guizhou has great views and countless organic produce. But the province is underdeveloped: farmlands are scarce and sporadic, transportation inadequate, and supply chain unreliable, denying shoppers the regular access to affordable and safe local produces. As a local supermarket chain with over 120 stores in multiple formats, Heli sends buyers to not only buy, but also work with growers to standardize operations, ensuring quality and controlling cost. The collaboration successfully cuts the overall cost by 30 percent and reduces the pick-to-shelf time down to five hours, saving time and money for Heli’s shoppers.

More responsible. Shoppers are always in the loop. They always see at the prime spot a special area with classy props and fine-tuned lighting, all related to the local fresh products. Alongside the cabbages, shoppers see a photo of the grower with a name, address, and a statement. Next to the price tag is a QR code that helps track the product status on every link of the supply chain. Looking around, they see the Heli mission statement lauding the beauty of the hometown and the importance of buying local and giving back to the community. Compared to national chains, shoppers at Heli are reported to feel prouder of their local cuisines and likely to pay a bit more for local produce.

For Our Store

Stronger brand loyalty. By teaming up with local signature producers and showcasing the star growers, Heli stores become the go-to place for community delicacies full of amazement and live cultural experiences. Sensations created by fresh, premium, and organic products ripple through the physical store space and Heli’s mobile shopping platforms, igniting momentary crazes and group purchases. All plays into a stronger Heli brand recognition, which translates into greater customer satisfaction and loyalty.

More social responsibility. Heli stores are doing more to fight poverty and creating values for all stakeholders. Through collaboration, Heli helps local government more effectively identify the potential entrepreneurs among growers for state loans. Heli also helps the multitude of growers organize and consolidate themselves for scale benefits by providing sales channels, market information, branding resources, and expertise on standard operations. 

Lower cost. Collaboration along this local supply chain of fresh produce brings down costs on all fronts, including the cost of communication, transportation, quality disputes, and spoilage loss. In return, growers can predict and grow better, stores have bigger margin and market share, and shoppers get more quality local produce at a better regular price. Everyone along the chain is better off.

Tactics

1. Buyers need to know everything about the local produce, like “Which farm has the best soil?” and “Who grows the best lotus?”
2. Help the growers to form co-ops, regularly share market information, and most importantly, be fair in business.
3. Schedule just-in-need packaging and just-in-time cross-docking at the DC. Try to get some standardization.
4. Set up special areas in-store for local produce and cultural items, offer signage that quotes the grower’s own words and uses their photograph.
5. Group purchases create better deals for shoppers and wins greater loyalty.
6. Have a QR code that tracks the product's origin.

Pro Tips

1. Consciously cultivate star growers and link the store to premium local produce.
2. Have your buyer listen to your shoppers: they always know when and where to get the best quality produce.
3. Work with the growers requires patience, but every little improvement saves in the long run.
4. Heli stores receive online orders at their individual social networking accounts and do 30-minute delivery.