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Wanted: Chain supermarkets, located in Asian-populated areas, that are ready to make a serious commitment to ethnic merchandising. If Walong Marketing, Inc. were to place an ad touting its latest service, that's likely how it would read. The Buena Park, Calif.-based marketer and distributor, which is already experienced in supplying authentic Asian foods to both mom-and-pop and chain stores nationwide -- including its sister company's retail banner, 99 Ranch Market -- has decided to take its vision a step further with the newly created mainstream sales and marketing team. The goal: to work with non-Asian supermarket chains to develop authentic aisles, much like what you would find in an Asian-owned store.
"For us this is like a mission," says Perka Chan, account manager for Walong's East Coast mainstream sales team, based in Jersey City, N.J. "We want the mainstream supermarkets to really know these products and to attract people to their stores."
The payoff, according to Chan, is a stake in the pocketbooks of Asian-Americans, a group that's estimated to reach 14.8 million by 2008. Observers also expect the group's desirable buying power, also known as disposable income, to grow even more, particularly among many second-generation citizens who are seeking more affluent lifestyles as their income levels increase. The nation's Asian buying power is projected to climb to $526 billion in 2008 from $344 billion in 2003, according to the Selig Center for Economic Growth in the University of Georgia's Terry College of Business.
Most of the supermarkets Walong has approached thus far have nodded their heads in agreement -- but few are ready to sign on just yet. Adapting a new ethnic marketing strategy can mean going through a lot of internal hoops, Chan admits. "Cost is obviously one of the biggest considerations for supermarkets," he adds, noting two of the biggest factors: labor and transportation for cross-distribution. (Walong, which operates six regional warehouses across the country, has limited distribution capabilities.)
One of Walong's first mainstream clients is the Great Atlantic & Pacific Tea Co., which operates a supermarket in Jersey City, a melting pot of ethnic cultures, including many Chinese and Filipinos, located just across the Hudson River from Manhattan. Before Walong approached the store, it already had some hefty competition in ethnic marketing. A successful 30,000-square-foot ethnic supermarket called Foodmart International, which specialized in Asian products, was operating in its backyard.
But last June Foodmart International was forced to close its doors after its landlord, Kmart, declared bankruptcy. Although another tough competitor -- Target -- is being built in its place, there's a void left to fill for Asian residents who were used to finding staple and specialty items so close to home. More of them have been making the short trek into Manhattan's Chinatown for groceries since Foodmart International's closing.
While the A&P obviously can't afford to dedicate the same amount of space to Asian groceries, the company is willing to initially devote 79 feet in dry grocery, four feet in dairy, and 16 feet in frozens to Walong's vision. With that space Walong, which operates its primary East Coast warehouse in Jersey City, aims to offer a selection of the most popular Asian items -- condiments, snack foods, and noodles among them -- at prices comparable with those found in Chinatown. It's a notable challenge, but one that's achievable with corporate and store-level commitment, according to Victor Ham, an account executive with Walong's East Coast mainstream sales team.
"For the retailers it means extra work in the long term. With A&P, we're supporting the buyer for three months, but after that they'll be receiving and stocking the products. We ask them to do that to keep the costs down," he says.
The revamped Asian dry grocery aisle at the Jersey City A&P is a colorful, neatly arranged assortment of items, including spices, sauces, snack foods, beverages, rice, noodles, and everything in between -- even a small kitchenware section with bowls and cups. Red lanterns and streamers hang overhead, drawing attention to the section, and multilingual Asian signage along the top of the aisle bears a friendly "Welcome" greeting. Meanwhile a "Best Asian Products" banner highlights the authentic brand names carried in the section.
The section officially opened Jan. 15, and so far there are certain items that seem to be moving faster than others -- among them instant noodles, jasmine rice, and shrimp crackers, according to Ham. Still, the buying patterns have been somewhat inconsistent as customers try new things and decide what they like.
Endcaps on the ethnic aisle have been used for special sales and to draw more attention to the aisle. "We've been rotating the products every three weeks, and shoppers have been responding," Ham says.
In the store's frozen section Walong's products take up 16 feet in a large freezer case. Convenience items such as dumplings and soybeans have been big sellers among the clientele, which includes plenty of two-income households and busy singles, Ham notes. Although Asian-American consumers, especially the first generation, are known to prefer cooking from scratch, these products offer authenticity to time-starved shoppers, he points out.
Walong's space in the dairy aisle is much smaller than in the other sections -- a modest four feet -- but the setup includes several varieties of soy beverages, tofu, and even duck eggs. Unfortunately the price of duck eggs has been "sky high" since the bird flu epidemic, Ham notes.
Ideally conventional supermarkets would also have live fish and more ethnically diverse perishable offerings, since Asian consumers spend heavily on those products, Ham and Chan agree. Still, a solid grocery selection in a mainstream store can pick up plenty of traffic, since there aren't many other stores where customers can get these products.
One of Walong's strengths, according to Chan, is its team of buyers, which is based at the company's California headquarters. Each buyer follows a specific Asian region, keeping abreast of the latest eating habits and other consumer trends. They also buy products for Walong's several retail banners, which are primarily located in California.
"We carry more authentic brands than our mainstream competitors," Chan says. The Jersey City warehouse typically holds about 3,000 products, and the mix is constantly changing to reflect the latest items to come from China, Vietnam, Thailand, and other Asian countries.
"When we approach supermarkets, we've already done our homework to see which Asian groups live in their area," Chan continues. In fact, they won't approach stores for the mainstream sales program unless at least 30 percent of the surrounding population would likely shop the Asian aisle. "We present a demonstration that shows how many Asians live there, including which races are represented," he says. "Every race has different product and brand preferences." At the Jersey City A&P, Walong is focusing more heavily on Chinese and Filipino products to reflect the area's demographics.
Of course, the A&P's success will depend at least partially on getting the message out to the community, and that's where Walong's expertise should help tremendously. Its services include advertising, in-store sampling, and grass-roots marketing efforts to reach people in the local communities.
Walong began its marketing strategy for A&P by placing advertisements in local Chinese and Filipino newspapers, to let consumers know about the new Asian sections. The ads are geared toward promoting the store, as opposed to just promoting products, Chan says. Phase two included a spring sale on selected products, for which Walong designed and printed fliers for the store to distribute.
In addition, Walong did a direct mailing of the sales fliers to 10,000 households within a 2.5-mile radius of the store. "Reaching people in their homes can be very effective," Chan notes, adding that the A&P promotion received an excellent response.
Phase three of the campaign, to take place later this year, will include a special promotion with TVB USA, a satellite TV network for Asians. Customers will be able to register to win a satellite dish and receiver.
Walong has been targeting A&P's weekend shoppers with in-store demonstrations and sampling provided by its own promotions team, who speak native Asian languages. "The samplings do very well. When we have these weekend events, you can really see the product move, as well as other non-Asian items in the store," Ham says. Non-Asian shoppers tend to be curious about the demonstrations, too, so it becomes an educational event for them, he notes.
Looking ahead, Walong plans to partner with Lee Kum Kee, a popular Chinese grocery brand, for other in-store promotions. Ham is also thinking of distributing fliers at a large housing complex located behind the store, where many Chinese people live.
"We really want to build a bridge in the community," Chan says. "We're looking for neighborhood events and occasions where we can provide people products, and then let them know that A&P is the place to get them."