Source丨36Kr Future Consumption Despite the ongoing tariff turmoil, Iceland, a UK supermarket that relies on the global supply chain, has chosen to return to China at this time and open its first physical store. Iceland is the largest frozen food supermarket in the UK, headquartered in Wales, UK, founded in 1972, and now holds a 17% market share in the UK. It has opened stores in about 10 countries including the UK, with a total of 1,000 stores and annual sales approaching 40 billion yuan. This time, Iceland has chosen China for its first Asia-Pacific store, located in the Jingxi Zhigu Park in Mentougou District, Beijing. It began trial operations on April 29 and will officially open to consumers at the end of May. Unlike all its other stores globally, Iceland's first store in China covers 6,800 square meters and is not just a supermarket shopping scene, but a comprehensive commercial complex that includes retail, e-commerce, MCN, catering services, and local services. Hence, it is named Iceland Lab. According to official information disclosed so far, the supermarket area of Iceland's first store in China will display 3,200 SKUs, all packaged products, mainly frozen foods from around the world, including frozen semi-finished seafood and frozen vegetables, as well as fried items such as French fries, fried chicken, fish sticks, pizza, pasta, desserts, ice cream, and other ready meals. In addition to food, there will be a small number of daily necessities and personal care brands. Some of the popular products to be displayed at Iceland's first store in China, image from official sources Iceland, known for its affordable and high-value products, is called the "Poor Man's Paradise" in the UK. Its own-brand "best-selling" frozen pizzas sell for around £1 each, and kitchen items like scissors also basically sell for £1. During promotions, it even offers deals like "any 3 items for £10" or "3 items for £8." In China, Iceland has also clearly emphasized on its official channels: "We will maintain our long-standing positioning and not be two-faced." As a result, various discount information appears in every corner of its Chinese stores, constantly reminding consumers how cheap the products are. Although it had not previously opened physical stores in China, Iceland is not a nobody in China. Popular items such as chicken legs and wings, sweet potato fries, pineapple cheese, Muller Corner yogurt, Lotus ice cream, and frozen minced garlic have long been the "white moonlight" (idealized favorites) of European international students. "Iceland is a lifesaver during finals. When there's no time to cook, just microwave it. During discount periods, 30 frozen chicken nuggets for £1 is such a bargain, much cheaper than KFC or McDonald's," a UK international student told the author. In recent years, many foreign supermarkets have accelerated their layout in China, and Iceland also realized the特殊性 of the Chinese market early on. When it first entered, it did not rush to open physical stores but tried to use e-commerce to open the door to the Chinese market. In 2018, Iceland entered JD Worldwide, launching its own-brand products on JD's overseas flagship store, as well as categories such as personal care, mother and baby, and cooking and baking. In 2022, Iceland also entered Taobao, opening an overseas flagship store, but with fewer categories, mainly selling ice cream, biscuits, Japanese sake, and other items. After the pandemic, Chinese consumers gradually developed the habit of buying frozen food online. According to a Nielsen report, 35% of Chinese consumers increased their purchase rate of frozen dough products compared to before the pandemic, with actual purchase frequency increasing by 42%. At the same time, online consumption has higher average order values and increasingly diverse categories. Frozen food companies like Sanquan have also stated that sales of frozen products in traditional supermarket channels have grown slowly, with some categories declining, but online growth is significant. However, judging from the results, Iceland's previous e-commerce attempts in China were not very successful. Iceland's JD overseas flagship store has now closed, and although its Taobao overseas flagship store is still open, it has significantly reduced its SKUs to only about a dozen products now. A supermarket industry insider believes: "For food supermarkets, offline channels are still the foundation despite facing great challenges now. If you only open online and not offline, you won't build brand awareness or make consumers perceive your brand." This time, Iceland chose to start trial operations before May Day, which can indeed attract a wave of foot traffic in the short term. As a reference, many foreign supermarkets entering China, such as Costco and Aldi, have had their first stores become popular check-in spots, helping the brand make a splash in China. To attract as much customer flow as possible, Iceland will also set up a dining area and a live-streaming area in its first store. The Beijing first store under preparation, image from official sources Next, Iceland will also open physical stores in Beijing's Chaoyang, Haidian, and other areas, adding more scenarios to increase the store's walkability. It has also made some attempts in the UK. Iceland once cooperated with Taylor Herring London, a PR and creative agency, to turn the entire supermarket into an ice rink using its refrigeration facilities, hoping consumers could enjoy both skating and shopping. At a press conference held in April, Iceland also stated that a key channel and scenario it will focus on is live-streaming e-commerce. The first store, Iceland Lab, is expected to introduce more than 100 regular cooperative brands and support over 100 live-streaming sessions per day. There is also a dedicated area in Iceland's first store for MCNs to produce food live-streaming and short video content, so as to synchronize to platforms like Douyin and Xiaohongshu in a timely manner. Using live-streaming to sell frozen products is indeed a trend, and many leading frozen food brands are trying it. For example, Sanquan Foods is achieving growth through this method, having conducted multiple rounds of cooperative promotions with well-known live-streaming teams on Douyin and Kuaishou. Since 2023, it has cooperated with well-known live-streaming teams on Douyin and Kuaishou for multiple rounds of promotion. In 2024, Sanquan Foods' direct-operated e-commerce business grew by 58% year-on-year, with a large part of that growth driven by live-streaming. Price is another key factor. Similar to Costco and Sam's Club, Iceland can offer frozen products far below market prices in Europe, mainly due to its mature control over the supply chain. In terms of supply, Iceland's habit is to select only a few suppliers for each SKU, strictly controlling prices and product specifications. Limited by the number of SKUs, Iceland follows a best-seller logic, selling only the most popular frozen products, for which consumer demand is stable and large. In addition, Iceland also has a certain proportion of own brands, such as Iceland Luxury, which not only increases richness but also enhances bargaining power. However, because Iceland's previous online stores in China were overseas flagship stores, all products were imported, which caused it to lose its "Poor Man's Supermarket" halo and cost-effectiveness advantage in China. Many products even appeared quite expensive. For example, a tub of Ben & Jerry's ice cream sells for nearly 90 yuan in China, while in the UK it only costs 20-30 yuan. An e-commerce cross-border industry insider told the author: "Global shipping costs, taxes, and operating costs all lead to significant price differences between Iceland's domestic and international prices." Besides price, Iceland's global supply chain may also conflict with local tastes. Iceland strongly emphasizes its highlight of "global high-quality frozen food." Based on this, it can provide clearly differentiated high-quality products in the fiercely competitive supermarket sector. However, most of Iceland's products are designed according to Western tastes, such as pizza, desserts, and fried items, while the mainstream Chinese consumer population prefers frozen products like dumplings, wontons, zongzi, and noodles. After entering China, Iceland still needs to combine local supply chain and market taste needs to make more localized improvements. Otherwise, it may easily become a niche circle for international students and foreigners in China. This tests Iceland's supply chain localization ability, but it seems to have made some preparations, such as choosing a local partner familiar with the local market—Shou Lv Hui Ke. According to information from the press conference, Shou Lv Hui Ke, under Shou Lv Group, will serve as Iceland's exclusive agent in mainland China, responsible for the brand's operations in mainland China. It will integrate Shou Lv Group, China Time-Honored Brands, geographical indication products, and new domestic brand products to establish a "global quality ingredients supply chain." In terms of food, Shou Lv has 16 time-honored brands including Quanjude and Donglaishun, and will also cooperate with origin places like Chifeng in Inner Mongolia and Ningbo in Zhejiang to develop meat products and frozen seafood. Iceland will still introduce specialty products from Japan, Spain, Italy, Australia, New Zealand, and other countries in China, but due to tariff impacts, it has not chosen products from risky countries like the United States this time. A worthy learning target is Aldi, which has a similar overseas positioning. When Aldi first entered China, it briefly took a detour, positioning itself as a mid-to-high-end boutique supermarket plus community canteen, aiming to be a "middle-class paradise." However, with the advent of the era of affordable prices, Aldi quickly sensed the change and turned back to the "affordable supermarket" route. Now, Aldi has achieved 80% local supply chain in Shanghai, and with a high proportion of own brands, it ensures the high cost-effectiveness of its products. However, the biggest question surrounding Iceland's development in China remains: how high is the acceptance of frozen products among Chinese consumers who prefer fresh food? Frozen products and pre-made dishes have long had a stereotype of being "not fresh, not healthy" in the minds of Chinese people. Topics like pre-made chicken soup and takeaway pre-made dishes being "technology and harshness" frequently ignite social networks. This cognitive bias is the fortress Iceland must conquer, and it is also why Iceland emphasizes its natural and healthy philosophy, claiming that its own-brand products will not contain any artificial colors, artificial flavors, or unnecessary preservatives and MSG. In fact, what Chinese consumers resist is not frozen and pre-made products per se, but unhealthy and not-fresh ingredients. Good products being frozen is not that hard to accept. Such products have always been an advantageous category for foreign supermarkets. For example, foreign supermarkets like Sam's Club have a higher proportion of frozen products than local supermarkets, using their global supply chain procurement advantages to introduce aquatic products from around the world, especially scarce and novel seafood categories. Some changes in the Chinese market are also happening. After the pandemic, demand for frozen products and pre-made dishes has grown significantly. According to iiMedia Research data, the scale of China's frozen food market will reach about 213 billion yuan in 2025, a year-on-year increase of about 10%. By demographic, women aged 31-40 with middle-to-high income are more willing to buy. This is a consumer group with stable income, strong purchasing power, and a certain taste for life. However, in China today, there is still no well-established frozen food supermarket. Many supermarkets treat it as a necessary product area, but the proportion is not high. Whether this differentiated positioning can succeed is both an opportunity and a challenge for Iceland. Tonight from 20:00 to 21:00, Zhao Bo, founder of New Distribution, and Xu Zhen, founder of Qingdao Meige Logistics Consulting, will have an in-depth live-streaming dialogue on "How to start B2b from 0-1, and how to do warehousing and distribution." Interested friends can click the live-stream link below to make a reservation⬇