1. Effective Distribution to Reach Chinese Customers
By: Mr. David Kuk Managing Director, DCH Logistics Co. Ltd.

2. Dah Chong Hong Holdings Ltd.
DCH Holdings was established in 1949
Total turnover in 2011 : USD 6 billion
3 core businesses: Motor, Food and Consumer products and Logistics.
DCH has 93 Food Mart stores in Hong Kong
Advantages of DCH Food Mart stores
Wide Coverage in Hong Kong
Gate way to China
Blooming Tourism Market (42 million in 2011, 67% from Mainland China)
Competitive Price (NO tax and VAT)
Brand awareness Increased: Tourists buy and bring back to home countries

3. Our “Food Mart” Supermarket
Seafood
Our “Food Mart” Supermarket
DRIED SCALLOP
FROZEN SCALLOP
SCALLOP
DRIED ABALONE
MACKEREL
SAURY
DRIED SEA CUCUMBER
CRAB
SHRIMP
OYSTER
FISH SURIMI
SARDINE
10% Products are from Japan
Frozen Meat
INSTANT NOODLE
Snacks & Grocery
Beef
FROZEN CAKE
TEA (GREEN/MUGI TEA)
JUICE
FROZEN INAKA SOBA
FROZEN PASTA
MISO
FROZEN RAMEN
KONNYAKU
SALT
DRY SOBA
PLUM LIQUOR
INSTANT NOODLE
JAPANESE NOODLE
SAUCE
INANIWA UDON
SANUKI UDON
COFFEE
GRILLED SCALLOP
SLIM TEA
JELLY CANDY
BLACK VINEGAR
CHOCOLATE
58% 9%
14%
19%
Fruits & Vegetables
FRESH FRUIT
FRESH VEGETABLE
TOFU
BOILED VEGETABLE
MUSHROOM
AZUKI BEANS

4. DCH China Customers of Retail, Food Service and Internet Channels
One of the Leading National FMCG Distributors in China
More than 20 years of experience in China
Providing services in more than 28 cities, selling directly to about 15,000 stores
Focus on Food and Beverage
Having distribution channels of Retail, Food Service, Horeca, TVS, Internet, etc.
Customers of Retail, Food Service and Internet Channels
Retail
Food Service
Internet

5. 4 Key Categories of Agency Partnership in China
Confectionery
Beverage
Nutritional
Food Service
JA’s Apples

6. DCH’s Promotion for Japanese Products
In store Promotion & Display
Exhibitions
Truck advertisement
Joint Promotion with JA & MAFF
Promotion Events
Sales & Exhibition Center in South China

7. Nationwide Distribution Channel
DCH Offices
North: Beijing
East: Shanghai Nanjing Suzhou Wuxi Xiamen
South: Guangzhou Shenzhen Xinhui
West: Chengdu
Central: Wuhan
Logistics Centers
Hong Kong
Xinhui
Macao

8. Importation Flow into China
A. General Products to Bonded Warehouse
Goods into bonded warehouse
wait for CIQ check and
Customs Clearance
Value adding services can be
Done inside bonded warehouse
Sourcing & liaise with suppliers in Japan
Documentation
Chinese Label Application
Lab Test Certificates
Goods arrive at China Port
Food Safety Testing if necessary
Ensure products quality
Fire Wall for Imported Products
If any issue occurred and fail, goods can be returned back to country of origin or HK
Customs Clearance
Sales and Distribution
Delivery
Multi Temperature
Point to Point
On time
Repackaging
Non-Bonded Warehouse (Multi-temperature)

9. DCH’s Logistics Setup DCH Xinhui Logistics Center in South China.
Xinhui Logistics center can act as a gate way for southern and western China market.
Bonded Warehouse → Not regarded as entering China  Firewall for imported products  No need to pay tax & VAT until selling in China market
Custom Clearance  Good Relationship with local officials
Food Safety Testing
Foreign Product Exhibition & Display Center
International Repackaging Center → Material Sourcing, Package Design, etc.
Multi-Temperature Storage → Ambient, Air-conditioned, Chilled, Frozen
Multi-Temperature Delivery → GPS & Food Tracking and Tracing System

10. DCH’s Seamless Cold Chain Management
To ensure quality of chilled & frozen products
Products from Japan
Temperature Checking when Receipt
Unloading & Warehousing at Air-conditioned Decks
Goods stored in warehouse at right temperature
GPS
Goods arrive at supermarkets at right temperature with accurate record
Warehouses: Temperature Detection & Keeping full record
Whole Process: Temperature Control and Checking

11. Conclusion Hurdles Solutions 1. High Selling Price
1. Be competitive by lowering the cost through supply chain efficiency ; Shipping in Bulk and repack in China
2. Short Shelf Life
2. Improvement through latest food technology
3. Always Difficult for SME’s Products due to no economies of scale ; high entry costs like listing fee
3. Consolidation in Hong Kong → Form a basket of Japanese Products for shipment and promotion
4. Radiation Incident → Customers are lack of confidence
4. Certificate proving Radiation Free ; Seamless Food Tracking & Tracing System to increase customers’ confidence
5. Lack of Promotion Platforms
5. Setting up a long term sales & exhibition platform in DCH D.C.
6. Complicated Export Documentation ; Communication Problems
6. Work with a partner that has branch office in Japan (e.g. DCH Japan)
7. Lack of Experience in China Market
7. Work with a reliable & experienced partner