Sungiven Foods, ‘China’s Trader Joe’s,’ Lands CNY 100 Million
COVID-19 and China
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Fresh food provider Sungiven Foods (元初食品) recently secured CNY 100 million in funding from MS EverSpring (百润长青) – a subsidiary company of the USD fund of Maison Capital (麦星投资).

Founded in 2011, the Xiamen-based company concentrates on the food retailing business. As of October 31, 2019, it had opened 105 stores in Xiamen, Shenzhen, Dalian and Quanzhou, with annual sales of CNY 1 billion.

On the basis of its main business unit,‘Sungiven Food,’ the company has been continuously perfecting its commercial matrix, which covers various forms of stores in the food retail sector, including:

Sungiven Foods (元初食品) – fresh food market

The shops usually have a 100-300 m2 floor area, providing customers fresh and healthy foods and ingredients. Located close to communities, they target customers with needs on safety ingredients, and emphasize on live experience.

Sungiven Shop (吾食初便利店) – convenience store

With around 100 m2 floor area, the to-go stores mainly focus on selling fruit and dry goods with own brands. The idea is to fill the gaps for Sungiven Foods in terms of coverage, and to serve people with immediate demands.

Yuanchu Canteen (元初食堂) – restaurant

Designed with in-store stalls, it offers a variety of catering includes porridges, rice noodles and soups. Yuanchu Canteen aims at serving people who do not have the time to cook but desire meals with fresh ingredients at a moderate price.

Front warehouse – delivery service

Distributes retail foods and catering through the mini-program Sungiven Plus(元初到家). It targets online users through categories that make it easy to form loyalty.

China’s fresh supermarket sector has attracted a lot of players with high homogeneity in their business model. However, Sungiven Food differentiates itself through the development of its own brands.

At present, Sungiven Foods owns four private brands, namely Sungiven (元初), Onetang (元童), Yuho (元实) and Ontrue (元和). With more than 2000 Stock Keeping Units (SKU), more than 60% of goods in its stores are under private brands. This ratio is significantly higher than the situation in the vast majority of supermarkets and convenience stores in China, where own-branded goods often account for less than 20% of all their SKUs.

Sungiven Foods views the overseas leading supermarkets Whole Foods and Trader Joe's as benchmarks for its own business. Both of the two companies are positioned as food boutiques that target high-end consumers who care much about quality.

Accordingly, Sungiven Foods also follows the strategy of promoting private brands, building its own retail channels and controlling supply channels by itself. Chen Qiming (陈启明), President and Vice Chairman of Sungiven Foods, believes that consumers’pursuit of safe and high-quality foods will bring this model a broad market space in its forthcoming developments.

It may be noted that the goal of Sungiven Foods is to build high-end food brands rather than simply running its supermarket business. However, grabbing consumers’ attention and forming brand loyalty have always been tricky areas that many senior players find it hard to breakthroughs in. The company still has a long way to go.

*Contributor: Ivan Platonov | Editor: Luke Sheehan

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