OrgHive: Health-conscious brands meet consumers in China
Anastasios Papadopoulos, co-founder of online platform OrgHive, speaks with NutritionInvestor about the Chinese consumer and the increasing interest for organic brands
Anastasios Papadopoulos, a lawyer turned venture capitalist, is the chief executive of Integrated Management Systems (IMS), a digital transformation agency with offices in Hong Kong, Shanghai, Guangzhou, Singapore and Paris. The company grew from three people to more than 300 in four years, banking on the growing demand for digitalisation from all kind of businesses in Asia. IMS is structured in three business units, encompassing digital transformation consultancy, marketing agency, and a venture capital arm – IMS Digital Ventures.
“I studied law and finance at HEC Paris before starting my career in M&A with the law firm Skadden Arps,” says Papadopoulos. “I was very fortunate to be part of several high-profile deals in the technology industry, and it was through those deals that I realised there were exciting opportunities to bring Silicon Valley-level technology to Asia.”
His belief in the growth of technology investment in the region has led IMS Digital Ventures to invest in data-driven, and game-changing, foodtech start-ups. OrgHive is a prime example – and a start-up with Papadopoulos name on it.
OrgHive launched in March, aiming to help Chinese consumers make health-conscious lifestyle choices while improving return on investment for food and drink brands in China. It applies blockchain technology to provide transparency and trust in the country’s organic and natural food and ingredients market.
“As of the end of September, more than 20 brands are using OrgHive, with another 60 brands in the pipeline,” says Papadopoulos. “OrgHive has accumulated over 10,000,000 views across its different touchpoints, with around three million monthly active users.”
Papadopoulos co-founded the start-up with Patrick Kaminski, an FMCG professional with more than 20 years of work experience in China. He served as a top executive for German powerhouses Henkel and Beiersdorf. Papadopoulos and Kaminsi are OrgHive co-chief executives.
A competitive market
Papadopoulos believes that navigating the Chinese organic and natural ingredients space requires knowledge and skills because it’s a big and highly competitive market.
“According to China’s Certificate and Accreditation Administration, approximately 20,000 certificates were issued to more than 12,000 domestic and international enterprises in 2018,” explains Papadopoulos. These, he says, are in addition to certificates issued to several international organic brands that are selling or considering to promote organic products to Chinese consumers out of China.
“The international brands are struggling to stand out and gain awareness as they are new to the market and are not equipped with what they need to succeed,” he says.
Consumer trends in China
Chinese culture inherently focuses more on the essence of the food and holistic physical health than Western culture. Hence, consumers gravitate towards brands that can make improvements for them in those aspects.
“One of our recent social listening exercises helped an organic milk brand gain tremendous traction in the Chinese market,” says Papadopoulos. “Chinese consumers were more favourable to the brand after its products were identified on social media as less ‘heaty’ – a Chinese medicine term that roughly means causing unseen inflammation to the body.”
Chinese consumers also have a different approach to the nutritional value of food. Papadopoulos says discussions on obesity and nutritional profile of products, for example, are trending topics in Europe and the US more than in China – but that’s changing.
“Nielsen data of 2018 showed that 82% of Chinese consumers are willing to pay a premium for quality foods, compared with a global average of 68%,” says Papadopoulos. “And a 2019 survey revealed that 95% of Chinese consumers read the nutrition labels when they go grocery shopping.”
He believes these figures suggest a fast-growing demand for quality food that can enhance the holistic physical health that Chinese consumers want.
OrgHive: A data-driven community
Papadopoulos believes OrgHive is unique – it’s a China-based social and content platform, helping food and drink brands overcome challenges in the market.
“Organic and natural brands face two challenges in China,” he says. “Consumers who don’t understand the benefits of organic lifestyle choices don’t have access to any reliable information or community to share ideas. And consumers who understand the benefits of organic lifestyle choices don’t trust organic certification or product origin.” OrgHive, Papadopoulos says, hit the market with a data-driven solution to this.
He explains: “OrgHive has created a community of natural and organic lifestyle consumers that allow them to share ideas and content while providing them with a mechanism, backed by sophisticated blockchain technology, to scan organic products to verify their authenticity and product origin.” Papadopoulos argues this is possible thanks to its close partnership with the certification bodies in China.
He claims that OrgHive is different from other software and apps in the market in that it uses an AI-based algorithm that leverages real-time data insights. The data is based on consumers search behaviour and interactions as well as the attributes of the lookalike audiences.
“Through this process, OrgHive cleverly matches consumers to products or brands they are most interested in,” says Papadopoulos. “This effectively help brands reach, nurture and convert consumers at a lower cost as opposed to other Chinese social platforms.”
As customer demand is evolving rapidly, OrgHive will continue to monitor the latest trend. Papadopoulos says it will be able to suggest appropriate disruptive technologies in the food and drink space that will help overcome new pain points faced by both consumers and brands.
As an investor, Papadopoulos is laser-focused on finding new technologies with the potential to transform the food and drink space for the better – he is channelling resources to foodtech through IMS Digital Ventures.
“At IMS Digital Ventures, we build and invest in revolutionary new ventures with Asia’s most influential corporations and disruptive entrepreneurs,” he says. “We bring their vision to life while using our experience to fine-tune their idea and reach the best possible valuation.”
Papadopoulos is bullish on opportunities for foodtech investments in Asia. “If we find a project interesting, we’re happy to discount fees against equity and make our resources available to up-and-coming ventures,” he says. “These resources include a team of experts and best-in-class tools, which often offer more value in terms of ensuring the smooth execution of their business model, especially in the early stage,” he concludes.