HONG KONG, Jan. 12, 2024 /PRNewswire/ -- At the beginning of the new year, on January 5th, Pagoda Group (02411.HK) held a press conference to unveil its strategy for the next golden decade. The "Delivering Delicious Fruit" strategy that has spurred Pagoda's growth for nearly 20 years has been upgraded to "Becoming a High-quality Fruit Expert and Leader". The new strategy will guide and inspire medium- and long-term business development, aiming to create unique value for consumers more effectively and sustainably.
In recent years, the fruit retailing industry has entered a stage of diversification and homogenization despite the complex and evolving environment. Supermarkets, fruit chains, takeaway platforms, fresh food e-commerce and community-based group buying are springing up. Meanwhile, consumers, whose habits have been shaped over the years, have stepped up to seek a premium lifestyle with a wide range of high-quality products, leading to the growing influence of top brands. Derived from fruit retailing markets worth over RMB 1 trillion, the high-quality fruit retail sector is now booming. The National Bureau of Statistics, 2023 Report on the Work of the Government, UN World Population Outlook 2019, expert interviews, and calculations by the strategy consulting company— KMIND demonstrate that the high-quality fruit retail market is now valued at upwards of RMB 400 billion.
"In light of trends of industry development, market scale and consumption upgrading, prioritizing high-quality development is crucial for the organization and the entire industry. Viewed from the organization's perspective, the 'Delivering Delicious Fruit' strategy is no longer consistent with Pagoda's dominance and specialization in the industry. We always stay true to our original aspiration of ensuring high quality and putting customers first. After exhaustive discussion, we have finally decided to upgrade Pagoda's strategy into 'Becoming a High-quality Fruit Expert and Leader'," said Xu Yanlin, President of Pagoda, while elaborating on the context of the strategy upgrade.
Confronted with a new development situation, challenge and opportunity, Yu Huiyong, the Founder and Chairman of Pagoda, shed light on the company's development planning and vision for the upcoming golden decade (2023-2032) at the press conference. This plan was formulated through in-depth discussions and repeated argumentation. Mr. Yu identified four opportunities in China's fruit industry for the following decade: (1) enormous potential of fruit retailing; (2) demand for higher quality and efficiency in conventional ToB; (3), nascent fruit category brand; and (4) promising international market. "By seizing the four opportunities in the fruit industry, we will optimize our organizational structure and establish three business groups and an overseas committee. Our focus will be on retail, ToB, and category while also tapping into the global market in due course. We are unswervingly advancing towards the target of hundreds of billions of yuan! By 2032, we aim to become a world-leading fruit ecosystem tech company and ultimately a world-leading agricultural ecosystem tech platform company."
Fruit chain retail and category branding are Pagoda's core strengths. Over the years, Pagoda has gradually established a leading position in the industry, driven by two factors: category brand and distributor brand. In the coming decade, Pagoda will implement multi-pronged actions focusing on brand enhancement, business development, investment and resource optimization to further solidify and promote its strengths, with KMIND providing support.
For ToB, Pagoda plans to enhance its own supply chain with an emphasis on product development. The company aims to make its individual products more diverse and competitive while also expanding the diversity of ToB channels for its products. Additionally, Pagoda plans to explore new business opportunities such as distributing trade union benefits within enterprises or public organizations, meeting the demand for fruits after meals, and providing gift delivery services. Furthermore, the company will also venture into e-commerce, group booking, drop shipping, and other emerging businesses and services.
Taking over the Banguo B2B platform in October 2023, Pagoda will share its global supply chain resources with global partners with sustained efforts in an attempt to expand transaction scale and increase market penetration. There is a need to shift from a fruit-purchasing agent platform to a platform that includes fruit purchasing, transactions, and industry information interaction.
Launched in 2018, Banguo has established a long-term partnership with more than 1,700 suppliers. Via 178 warehouses in 125 cities and 14 provinces nationwide, it serves over 500,000 registered users. In the first nine months of 2023, the platform grossed RMB 2.4 billion in transactions.
With a global vision, Pagoda, giving full play to the advantage of "global buying and selling" supply chain integration, delivers China's high-quality fruits around the world. Pagoda's wholly-owned subsidiary, JCT, is productive in promoting the "Wangshan" apple in seven countries and regions worldwide. In the coming decade, Pagoda will shoot its bolt to become a leading fruit exporter in China, with fruit exports exceeding RMB 10 billion and a global B2B distribution network initially taking place. After over 20 years of continuous refinement and validation, Pagoda will enable global franchising in due course. Taking inspiration from 7-Eleven's brand and convenience store chain model, Pagoda will devise a business model for the Pagoda brand and fruit retail chain.
