Export market scoping study for the lychee industry (LY13003)

What was it all about?

This project investigated opportunities to increase export of Australian lychees, developing understanding of new market opportunities and the supply chain once the fruit leaves Australia.

Research was conducted on lychee markets in Canada, France, Hong Kong, Indonesia, Malaysia, Middle East, Singapore and the United Kingdom.

Lychee-producing countries were also investigated to understand trade flows, seasonal competition and ethnic demand, and interviews were conducted with producers, marketing groups, exporters and buyers.

The research found potential to grow the Singaporean, Indonesian and Malaysian markets through retail chains and their importers, who are keen to target high and middle income markets with high-quality fruit. Potential was also identified to expand the Canadian market through wider distribution to reach Chinese communities in cities across the country, other ethic segments, and consumers in the mass market interested in new fruits.

Although ethnically Chinese communities represented the strongest demand in all four countries, there were opportunities to grow sales in other market segments, and to build more efficient supply chains to improve supply and reduce the market price of Australian lychees. Buyers recommended using store tastings and point of sale information to attract potential new consumers, while Indonesian and Malaysian retailers preferred to sell prepacks.

Importers and distributors also saw opportunity for 1-2kg cartons to grow consumption in existing Asian market segments.

Key challenges identified by the team included the short shelf life of Australian lychees, attributed to lengthy distribution channels; difficulty selling containers into wholesale markets with limited cool chains; and comparatively high prices compared with other supplying countries.

Key opportunities included ready access to markets in Indonesia, Malaysia and Singapore; rising consumer incomes in those markets; growing consumer concern about chemical residues, particularly in fruit from China, with Australian produce seen as a cleaner alternative; South-East Asian growth of supermarket chains, department stores and gourmet food stores with cool chains in place; more efficient supply chains and little competition in South-East Asian lychee markets in Australia’s season.