Sales of Korean Kimchi Start in Chinese High-End Department Stores
The revision of standards for imported kimchi by the Chinese government in November 2015 enabled Korean kimchi to restart its distribution in the country, which had been halted for some time. Currently, the consumption of Korean kimchi is steadily increasing among young Chinese consumers who are interested in Hallyu (Korean culture wave) and the Chinese high-income group who pursue a healthy lifestyle. Daeil Food, a Korean kimchi producer, has recently succeeded in entering three Chinese department stores with its products—the first step for the company’s advancement into the premium kimchi market in the country.
Supplying Kimchi to Three Department Stores in the Northeastern Region of China
Daeil Food has been eyeing the premium kimchi market of China since the resumption of Korean kimchi export to the country. The company has been steadily carrying out promotional activities in local department stores and high-end supermarkets of the three provinces (Heilongjiang, Jilin, and Liaoning) in Northeastern China with high consumption of Korean-style kimchi. Daeil Food has also been gathering information about the Chinese kimchi market through the company’s interactions with Chinese buyers and actively participating in China’s major food trade fairs such as CFSI (China International Food Safety Technology & Innovations Expo).
Thanks to these efforts, the company was able to become the first Korean kimchi producer to sign a contract with Chinese department stores. In September of this year, Daeil Food started supplying to the stores ten types of kimchi products manufactured in cooperation with producers of Gangwon Province. The three department stores selling its products are Wanda (operated by China’s largest realty group), Zhuozhan (a high-end department store present in all three northeastern provinces), and Eurasia (famous as the world’s largest department store).
Mr. Hong Geum-seok, CEO of Daeil Food, explains, “These are high-end department stores frequented by high-income consumers. Our products are sold there in the general and Korean traditional food sections. We plan to supply about 100 tons of kimchi to those stores by the end of this year and hope to expand the export to 500 tons next year.”
Cultivating China’s Kimchi Market by Differentiation in the Production Process
How did Daeil Food attract the interest of Chinese high-end department stores? The answer is three-fold: the company’s know-how in kimchi production, the use of carefully selected ingredients, and thorough food hygiene management. Since kimchi is a fermented food, it ripens during the shipping process and can easily lose its crispiness. However, Daeil Food uses its own seasoning made with natural seaweed (sea mustard and kelp), which helps to keep kimchi crispy for a long time.
The flagship product of Daeil Food, Baechu-Kimchi with Black Garlic, is a good example of its differentiated production process. It is made with the extract of black garlic which is known as a healthy functional ingredient. This premium kimchi product appeals to many foreign consumers who dislike the taste of raw garlic. The product’s manufacturing technique is patented in Korea and Japan.
Since kimchi is a type of Korean traditional food, Daeil Food adheres to the principle of using only Korean ingredients—napa cabbage, white radish, red pepper powder, garlic, etc. No artificial seasonings or sugar are used in consideration of consumers’ health. The company puts great effort into managing its kimchi manufacturing facilities in a hygienic way in order to ensure the quality and high food safety of its products. All related facilities of the factory—air showers, filters for foreign matter, etc.—possess HACCP (hazard analysis and critical control point) certification. Daeil Food has also succeeded in obtaining ISO9001 and ISO14001 certifications for its food safety management system.
Active Exports to Japan, Taiwan, and Canada
In addition to Baechu-Kimchi with Black Garlic, Daeil Food produces a variety of kimchi products: mat-kimchi (sliced kimchi), baek-kimchi (white kimchi), kkakdugi (chopped radish kimchi), chonggak-kimchi (whole radish kimchi), and many more. They are exported to mainland China, Taiwan, Japan, and Canada. In the foreign markets, the company uses the brand name “Maison de Kimchi.” Its Baechu-Kimchi with Black Garlic has been distributed in Japan since 2014. In Taiwan, it was sold out three times in a row when it appeared on the largest local home shopping channel, Momo, in November 2015. Shipment of small-sized mat-kimchi products to Korean stores in Canada started this January.
Mr. Hong says, “Our biggest goal is to capitalize on the advantages and high food safety of our products to establish a strong presence in China’s kimchi market. To this end, we are embarking on a series of promotions targeting Chinese high-income consumers who are interested in health.”
# Additional Info: The Efficacy of Kimchi
Kimchi is a world renowned fermented food. It was featured in a magazine with global reach, Health, in 2006 as one of the top five healthiest foods. Since 1g of kimchi contains over 1 billion lactobacilli, regular consumption of kimchi is effective in improving immunity and preventing cancers. Consumption of kimchi in China skyrocketed in China in 2003 during the epidemic of SARS (Severe Acute Respiratory Syndrome) as many Chinese hoped the fermented food would help them ward off the disease. Thanks to the healthy image of kimchi, its sales in the country continue to grow.
Inquiries: Daeil Food Co., Ltd.