In this February, Ttangkkeut Organic Agriculture Corporation was selected as the participant of the ‘New Business Model Creation Project in China’ promoted by the Korea Agro-Fisheries & Food Trade Corporation(aT). The export to China began in earnest with various supports from this project. In particular, the export of organic GABA rice, which has been certified as an organic product by the Chinese government, is becoming more active. It has been recognized by Chinese consumers as premium organic rice that has secured quality and safety, and the volume of export to China is climbing up.
#The first to obtain China Organic Product Certification(CQM) in Korea
In last December, Ttangkkeut Organic Agriculture Corporation is the first domestic entity to acquire China Organic Product Certification(CQM) in Korea. As the Chinese government approved the quality and safety of exported GABA rice, local Chinese consumers also began to trust and purchase it. Accordingly, in November of this year, it exported USD 39,000 worth of 7.2 tons of GABA rice, laying the foundation for a full-fledged entry into the Chinese market.
The corporation achieved a range of international certifications such as USDA organic certification, Halal certification, and low carbon certification in the United States, along with CQM. By securing international qualifications, the rice has become a popular product that can be exported steadily for a long period of time regardless of worldwide circumstances.
The export targets for China are 30 tons this year, 1,000 tons in 2025, and 10,000 tons in 2030, and marketing activities and promotion events are reinforced.
#Sought-after in the finest premium market
The Korean organic GABA rice exported to China is raising its added value by focusing on the premium market. In order to build the image that the product guarantees the quality, Chinese middle and upper class consumers were selected as targets instead of low priced competition in the Chinese market,
Yun Yeong-sik, CEO of Ttangkkeut Organic Agriculture Corporation, said, “In order for Korean organic rice to enter the Chinese market, a step-by-step scenario was established. That, first, a marketing test was conducted for organic GABA rice in China. Next, we plan to thoroughly prepare intensive promotions and marketing activities to build up the premium brand image, then successfully launch at offline stores in China.”
#Diversification of export items and exporting countries
The GABA rice is exported not only to China, but also to the United States, Hong Kong, and Singapore. The export price is more than twice the price of what is sold in Korea, yet it is still chosen by local consumers. As consumers rely highly on safety certifications, the fact that the corporation already obtained several kinds from the most recent CQM, USDA organic certification, Halal certification, to low carbon certification, is definitely an advantage. Besides, organic GABA rice has been found to be effective in a number of functionality including preventing adult diseases such as high blood pressure, cerebral infarction, and dementia, as well as improving diabetes and removing cholesterol. As a result, it is gaining popularity as a nutritional diet especially for examinees and researchers, the elderly to prevent dementia, and children in the growth period with excessive brain activity.
CEO Yun Yeong-sik of Ttangkkeut Organic Agriculture Corporation
CEO Yoon said, “As the number of locals in China is growing recently, we are going to expand the export complex from the current 10ha to 300ha in 2025. In addition to organic GABA rice, we plan to develop 5 kinds of GABA rice porridge and processed rice products, and export them from 2022.”
#aT’s New Business Model Creation Project in China
The ‘New Business Model Creation Project in China’ operated by the Korea Agro-Fisheries & Food Trade Corporation(aT) fosters distinguished agricultural products for China and supports the advancement of a distribution platform suitable for the latest local trends. The project utilizes 11 strategic items set by aT to develop new products that are in demand but not circulated in China, or it supports marketing expenses necessary to target new distribution stores such as O2O stores, online malls, franchises, home shopping, and reverse shopping malls.
Kim Ji-won, the Assistant Manager of New Northern Business Department at Overseas Business Office of aT
1. Please introduce the achievements of the New Business Model Creation Project in China
-Company A designed a powdered stick-type of ‘Yuja Kombucha’ targeting female consumers who are interested in beauty and health after many years of market research, and finally knocked on the door of Chinese market. As a result, it has successfully introduced to eight leading distribution stores in 2019 for the first time. Company B developed ‘Yuja Passion Fruit Tea’ by combining a fruit preferred by Chinese consumers with yuja tea, a traditional Korean citron tea, and has now entered a few online and offline malls including Dongbang Home Shopping. In addition, samgyetang, which was difficult to present at mainstream market due to price problems, was launched for the first time in CCTV, China’s state-run home shopping channel, and supplied as food ingredients to the largest Korean food chain stores.
2. What kind of efforts has been made to successfully enter the Chinese market in the case of Ttangkkeut Organic Agriculture Corporation?
-The first export was made after three years of preparation from the development of new varieties to the acquisition of organic certification in China, and registration of a rice processing plant for Chinese export. Through a two-year support project, the packaging design of organic GABA rice ‘Gwanhaemi’ was customized to Chinese style and market strategies were established by conducting market tests for local consumers at a luxury store in Beijing. In addition, it has become more competitive by securing quotas by recruiting buyers who can import rice in China, and has also entered a premium online mall that is powerful in distributing fresh agricultural products. Lastly, in preparation for online launch, we supported the designing of a product detail page(e-directory) and a promotional video that emphasized the safety and differentiation of Korean products, and recipes. As soon as the export begins in full-scale, promotions will commence on major social media and video platforms.
3. Please comment to the domestic agricultural exporters interested in the Chinese market.
-The ‘New Business Model Creation Project in China’ aims to ‘create a new business model’ for exporters and buyers. This year, aT’s Chinese buyers network was used to arrange a 1-on-1 video consultation to support domestic exporters struggling with COVID-19. Currently, we are actively discussing specific terms and conditions, so the future is looking bright. We hope for your continued interest in the New Business Model Creation Project in China.