Called NYDao.com, the Philadelphia-based startup is trading on the reputation of US-made products, which seems at an all time high in China, said Ed Dougherty, business relationship manager with the new portal.
“We are addressing this hunger they have for what I call life enhancers,” Dougherty told NutraIngredients-USA. “There is a desire for this whole realm of natural food supplements. And there is a particular desire for products made in America. They may have questions about their feelings for the US as a country but they love the FDA.”
Dougherty said recent developments in China have opened the window of opportunity for a portal like NYDao, which is the brainchild of Chinese businessman Eric Zhang, the former deputy general manager of ChinaDaily online, the country’s largest news and information source. These changes include a wakening awareness of the severity of the local environmental crisis and how it affects the security of the food supply and a shift in the way the central government is viewing the emergence of the county’s middle class and the demand it generates as a driver of future economic growth.
Recent crisis such as the days-long closure of the airport in Harbin in Manchuria because the polluted air was too opaque for aircraft to fly have started to reverberate. Air quality in Beijing is now widely known to be routinely several factors worse than international standards would consider safe.
“You are talking about a country where the people believe they are almost being poisoned by their government in the sense that the government up to now has not been proactive in trying to improve the environment,” Dougherty said.
And that mistrust is especially acute in the food realm, Dougherty said. The melamine scandal of a few years ago, in which a toxic additive found its way into pet food and infant formula as a way to skew the amount of protein that showed up on standard tests, is something that is probably never going away in consumers’ minds, he said.
“There is no question that that one is really baked hard into the culture there. Perhaps some of that comes from the fallout of the one baby policy. If I’m only allowed one child I’m going to be extra careful,” Dougherty said.
Direct from US quality message
Shipping products directly from the US provides peace of mind for consumers, Dougherty said. For one thing, consumers are becoming increasingly aware of the extent of the copy cat industry within China. If it’s made in China, they can’t be sure of what the product really is, Dougherty said. A 2013 report by the United Nations Office on Drugs and Crime said that China was the source of 79% (by value) of the counterfeit products seized in the US in 2009.
“Mass-scale counterfeiting for export in China seems to be mainly a product of the last decade,” the report said.
And the issue isn’t confined solely to the export market, Dougherty said. It has undermined the confidence of the quality of any products made in China.
“It’s a consequence of the who copy cat industry there. People are concerned about things like counterfeit baby formula, where it’s diluted to being half as potent as that label says it is,” he said. “Even American companies that have made tremendous investments in property and manufacturing facilities in China are being affected. A company like Abbott Mead is finding less traction for stuff they make there."
“Though China's quality control provisions on the food and nutritional side are improving rapidly, we think that a continued preference for US-made products is an embedded element in what motivates the Chinese consumer,” Zhang said.
A key facet of the website is that is was developed by a team in China, Dougherty said. The language is in local idiom, and is not a crude translation from the English. The look and feel of the site will be familiar to Chinese consumers, he said. Consumers can buy a variety of supplements and shelf stable foods from brands such as Enfamil, Rainbow Light, Schiff Nutrition and Twinlab.
Direct-to-consumer is the company’s first target, followed by penetrating a unique Chinese market, the neighborhood fixer/distributor.
“They have these huge housing complexes there. And there is a person in that building that everyone knows to go to for diapers. Or another one for cellphones. Or supplements,” Dougherty said.