Research Paper on China's Fruit & Veg Boom: Growing Supply to Meet Rising Demand

Introduction

China is one of the largest producers of fruits and vegetables across the globe (Statistica, 2019). Owing to the large population in China, income increase, and lifestyle change, the demand for fruits and vegs is ever increasing. Besides, the Chinese government is trying to boost the production of horticultural produces through new and relaxed agriculture laws to satisfy domestic demand and the international market (Azam & Shafique, 2018). As such, the supply of fruits and vegetables in China is adequate. The government of China enacted strict regulations on food production, and therefore the quality of fruits and vegetables for export is satisfying. Currently, the prices of fruits in China are slightly higher compared with the last year. However, the projection is that fruit prices will decline in the new future since the government is boosting yield in the production areas (China Dutch China Chambers of Commerce, 2019). It will imply that the supply will increase, bringing prices to equilibrium. China produces different varieties of fruits, giving exporters and importers numerous options to select.

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Business Description

The business will operate as Jones Import and Export. The firm registered as a private company, whereby the owner is the sole shareholder and the manager. The headquarter of the entity will be in California, and therefore the registration process of businesses in California are applicable.

The Business Registration

The process of registering the business is as follows:

• Step 1: Selecting a unique name for the company
• Step 2: Filling the Article of Organization with the Secretary of State Offices for California, showing the name of the firm, the management. Purpose of the company, and address of the firm and registered agent.
• Step 3: selecting a registered agent
• Step 4: deciding on the management
• Step 5: filling with the Secretary of State the Statement of Information
• Step 6: Payment of the state tax obligations
• Step 7: adhering to the regulatory and tax requirements
• Step 8: Application for the sellers' permit

Products

Jones Import and Export will be importing from China market fresh fruits. Specifically, the company will be sourcing from China grapes, luscious lychee, goji berry, durian, dragon fruit, lovely longan, pears, and apples. However, the company is planning to include vegetables starting from year three of operations.

The Market Analysis

The market analysis of the consumption of the fruits in California is the primary method for getting consumers of the fruits. In California, the population is growing, but there are fewer varieties of fruits available. The business will be selling both on retail and wholesale. Purchasers of Jones Import and Export products are supermarkets, households, learning institutions, and grocery outlets. A visit to the China Agricultural Trade Show provided an excellent chance to meet with various registered fresh fruits exporters. Several suppliers are on the list of considerations. The selection of the best firms will depend on the set criteria by Jones Import and Export. Customers for Jones Import and Export will be:

• Grocery stores
• Supermarkets
• Wholesalers
• Retailers
• Learning institutions
• Households.

The Supply Chain

The selected suppliers will be shipping the consignment through air transport. The company will be requesting for delivery of the specified order. The business will be supplying to customers per the orders made. The company will be delivering the specified order to buyers and customers' destinations, including home delivery. Besides, Jones Import and Export will open physical points of sale, where shoppers can visit. Mainly, delivery to buyers and customers is the priority.

Terms of Contract between Buyers and Sellers

• The agreement between buyers and sellers will be:
• The company will deliver products to customers' destiny as agreed
• The seller is liable for any damages during the transit of products
• The seller must provide the ordered quality and quantity

Challenges

• The cultural difference - Chinses are individualists, and they highly regard private affairs very much. As such, cultural differences make it challenges to deal with Chinese suppliers. Language is also a barrier because most of the suppliers do not speak English, but Chinese.
• Price increase - prices of horticultural products such as foods keeps on changing. Mostly, price increase of fruits makes them expensive.
• the Government's regulations - the government of China, is strict on exports, making the trading process with Chinese complicated.
• Fluctuating supply - the demand for fruits in the Chinese domestic market is high, resulting in unstable supply.
• The exchange rate keeps on fluctuating, and therefore costs one cannot project the cost accurately.
• Delayed payments or non-payments for exporters
• The unacceptability of the product in the local market for importers

Risks and Benefits Analysis

Risks

i). Transportation risk - imported/exported goods may get damaged or lost during transport. Such occurrences amount to incurring losses and lost customers due to unmet demand.

ii). Political risk - it emanates from government actions, political instability, and political developments in a country (Seyoum, 2013).

iii). Currency control risk

Benefits

• Importers access to a different type of products that are unavailable in their home country
• increased sales revenue and profitability due to an additional market abroad for exporters
• introduction of new products in the market
• reduced costs compared with own production
• high-quality products

The Company Management

Jones Import and Export operates as a private limited company dealing in importation of fruits in the California, USA. The owner is the manager assisted by the marketing manager, drivers, and sales person. The manager is responsible for strategic decision making and the overall oversight of the company. The marketing manager is responsible for developing marketing strategies for the target market. Drivers ensures products reaches owners on time, while collecting new orders.

The Funding

Sources of funding the company are:

• Owners saving
• Sale of personal assets
• Contributions from friends and relatives
• Short-term borrowing

Reference

Azam, A., & Shafique, M. (2018). An Overview of Fruits and Vegetables Trade of China. International Journal of u-and e-Service, Science and Technology, 11(1), 33-44

Dutch China Chambers of Commerce. (2019). China Market Potential for Fresh Fruits. Retrieved from https://www.dccchina.org/2019/08/fruit-price-imports-china-market-potentials/

Seyoum, B. (2013). Export-Import theory, practices, and procedures. Routledge.

Statista. (2019). Retrieved from https://www.statista.com/statistics/264662/top-producers-of-fresh-vegetables-worldwide/