Jacob’s Well is a British wholesale distributor selling food and drink across China. The company’s directors, Zhong Shi Jia and Andy Radcliffe explain how and why they entered the market, and what’s worked to make their business a success so far
We met shortly after university and became friends before setting up Jacob’s Well. We are a total solution offering UK export, China import, marketing and distribution services for any product that fits on a pallet.
Zhong Shi’s parents’ company really is a Marks & Spencer penny bazaar-style success story. They started their business in 1987 selling seasonal fruit off the pavement in Harbin and have been in the food distribution business ever since: they’ve since built a wealth of expertise, with connections across China to support growth.
In 2014, Zhong Shi explained to me his frustrations with British businesses refusing to sell products to an established Chinese business. I decided to find out why. Picking up the phone myself, I discovered exactly what Zhong Shi said I would: mention ‘China’ to an international sales manager and they’d refuse to sell. After making several such calls, I realised it was because of the way UK business performs due diligence and the sales managers he had been speaking to were clearly biased after years of hearing industry anecdotes that weren’t always true.
Further analysis of the problem led to a marketing model that was transparent and verifiable for our UK based suppliers whilst serving the needs of our Chinese consumers. It wasn’t difficult, only really requiring some minor tweaks to our structure and governance and a new marketing message. With a marketing office established in Farnham in Surrey and regional offices in Shanghai and Harbin, we quickly established a geographic footprint that met the needs of our UK supplier base and supported Chinese consumers too.
Initially, we ran everything out of Harbin and Beijing, eventually opening our third warehouse in Shanghai in late 2018. We also formed a number of partnerships with local distributors in Tier 2 and 3 cities beyond our direct reach. The Jia family connections were an essential part of our rapid growth and we are very grateful to them.
We use a combination of in-house intelligence, connections, feedback and market research to decide which products to sell. If we think we can sell a product and it fits a gap in our portfolio we are always happy to review it. One of the greatest influences on our selection of a brand is the attitude of the prospective UK manufacturer and their desire to get their market entry right.
All of our Scottish brands have been incredibly popular from day one. They each have their own strong identity, unique selling points and their offering hits the nail on the head for the consumer in China.
As with any market, it’s naïve to focus on a single sales or distribution channel. The supply channels in greater China are a single ecosystem that have codependencies. A brand may survive online but it won’t thrive until it’s visible in more than one or two online locations. That really has been Jacobs Wells’ strength from day one – the combination of having TMALL Classic, JD.com, Taobao and PinDuoDuo stores with product in warehouses in Shanghai or Harbin ready for shipping to China’s B&M retail or to the consumer with a same day/next day service has really allowed us to stand out as a visionary leader in the supply of British food and beverage (F&B) products.
Our message to British businesses around this is clear: China has some of the highest standards of governance in the world with rigorous enforcement – right first time is the best option.
Different regions have different product preferences, and this is where good product and market research comes in. It’s easier to sell products like preserves in larger jars in the north and products like gin in the cities along China’s eastern seaboard. Knowing the reasons why means knowing the consumer well.
Our biggest challenges come from the UK manufacturers and their ability or flexibility to adapt to China’s needs. The majority of our UK suppliers are amazing. They want to be successful in the Chinese F&B market and will do everything they can to ensure we are. Occasionally we’ll find a supplier has failed to listen to our advice or lowers its usual standards because they inappropriately believe they’ll get away with it because it’s China. The accuracy standards in the paperwork we require from our suppliers is reflected in the standards that we work to. Our message to British businesses around this is clear: China has some of the highest standards of governance in the world with rigorous enforcement – getting it right first time is the best option.
We don’t have many surprises trading in China as what it is to be British and Chinese is built into the DNA of the company. We trade freely in an environment that is frequently misrepresented in the Western press. Anyone who comes to see our business and learn about our Chinese consumers, staff and their families will soon see how happy we all are, getting on doing the things that we love. Sharing the best of British food with the people of China.
We would advise any company looking to enter the Chinese market to pick up the phone. Have a chat, come with an open mind and a great product and we will do our best not just to sell it, but to sell it well. Jacob’s Well has an abundance of expertise in where to put marketing spend. We represent our brands across China throughout the year online and at trade shows like CIIE Shanghai, FHC Shanghai, Food2China Guangzhou, SIAL Shanghai and an abundance of local promotional events in our partner retailers and shopping malls.
Last year really saw us transforming our business. The pandemic has created an abundance of new opportunities and exponential growth in our online sales. Our online service offering is evolving rapidly and we’re now focusing on how we can deliver UK products to the consumer with sub one hour delivery times in Tier 1 cities. Things move fast in China.
To find out more about the Food and Drink sector contact Antoaneta.Becker@cbbc.org and to get in touch with Jacob’s Well email email@example.com