How did the apple supply-side reform journey unfold?

Fruit wholesale prices fall to “rock bottom”
E-commerce platforms people remember as selling only cheap goods hold their prices firm

Bad news has fruit wholesalers frowning. Since entering the second half of 2015, the fruit market has plummeted. Compared with previous years, apple and orange prices have nearly been “halved,” and the wholesale unit price of pomelo has already fallen below one yuan per jin. What is worse, even at such prices, fruit sales still cannot pick up.

The e-commerce sellers who also sell fruit, however, do not have such worries. Take this year's hottest Luochuan apples as an example: the wholesale price is about 3.6 yuan per jin, while on some e-commerce platforms, Luochuan apples work out to more than 9 yuan per jin.

Why do apples from the same producing area differ so much in price?

“In fact, the difference in quality is not too great; the main thing is that the sales model is different.” Liu Yong, head of the base of the Shaanxi Luochuan Yuanfeng Apple Professional Cooperative, explained to Modern Express reporters.

Contrast

Citizens' fruit spending stays high

Fruit has already become a “main player” in daily household consumption. Data from a Nanjing wholesale market shows that at their market, the proportion of individual consumers has risen sharply, especially household consumption, which rose 40% compared with 2014.

Miss Sun is a skilled baker. She likes to fold all kinds of fruit into bread and cookies, such as blueberry cookies and strawberry cake, “nutritious and delicious.” So, she told Modern Express reporters, her monthly spending on fruit is relatively high: “When vegetables and fruit are not enough, fruit substitutes for them. Every month I spend far more on fruit than on vegetables.” She roughly calculated that she probably buys at least 1,000 yuan worth of fruit each month.

Mr. Yang's family also spends about 1,000 yuan a month on fruit. Mr. Yang told reporters that in this season they buy more apples, mandarin oranges and cherries. The latest change is that in the past half year he has begun buying fruit online. At present, his household's ratio of online to offline fruit consumption has already reached “half and half.”

Ms. Li's daughter is two and a half years old this year. She told reporters that her monthly fruit expenditure is about 300 yuan. Ms. Li said she gives her child one Red Delicious apple every day, priced at about 5 yuan, and for things like kiwi fruit she also chooses the higher-priced ones.

Wholesalers and fruit shop owners all say sales are slow

But wholesalers and fruit shop owners all say sales are slow. What has happened to the fruit market?

Bo Hongyuan has been in the fruit business for 17 years and opened a company specifically in the fruit market, mainly selling apples and pears. Looking at it now, “there is almost no profit; it is good enough not to lose money.”

At this time in 2014, he could sell more than 15,000 boxes of fragrant pears and apples a day, but now daily sales are more than 2,000 boxes, and prices cannot be pushed up either. A 15-jin box of fragrant pears now sells for only forty-plus yuan, whereas before this would cost at least more than 60 yuan, and apples have fallen by more than half compared with previous years.

Wholesale sales are slow, and traditional roadside fruit shops are also hard to sell from.

Pan Zhixiang has been in the fruit sales business for more than 10 years in the Xiangfuying vegetable market. The shop he runs is more than 90 sq m, with forty or fifty kinds of fruit displayed in a dazzling array. Apples alone come in seven or eight kinds, with prices ranging from 3.8 yuan/jin to more than 10 yuan/jin. “Before, selling around 10,000 yuan a day was easy; now, if daily sales can reach 5,000 yuan, that already counts as good.”

Ms. Jiang, who runs a fruit business near Hongmiao, also clearly feels that business is hard this year. She said that many fruits in the shop are now being sold at zero profit, and she estimates that 2015 earnings will be at least about 10% less than the previous year, and for her, who has been in the fruit business for more than 20 years, this is also a first. “Business used to get better every year. This year the wholesale price dropped, and the selling price dropped too, but sales just cannot pick up.”