Cherries and shrimps among the weapons in JD.com’s push into China’s booming market for online fresh food shopping
The e-commerce giant plans to expand its cold-storage and logistics sites and source a wider variety of food from around the world as it seeks a share of a market that could grow to almost US$36 billion next year
From cherries and shrimps to beef, China’s market for fresh food ordered online and delivered quickly is set to almost triple in size by next year to US$35.6 billion, but according to leading player JD.com, it will be a while before companies can make a profit from it.
Max Cao, the general manager of sourcing and procurement for JD.com’s fresh business, said in an interview that the company’s first priorities would be to strengthen its logistics system, expand the types of food on offer and improve customer service.
“Making a profit from delivering perishable products such as seafood, frozen meat, vegetables, fruit and ice-cream in the current environment remains a challenge for China’s e-commerce operators because of the heavy investment in the initial stages,” Cao said. He declined to say how long JD.com would be prepared to take losses.
Fresh food e-commerce is the latest in a wave of e-businesses that are transforming China, and has a huge growth potential. Currently just 2 per cent of fresh food is bought online, compared to around 40 per cent of clothes and electronics.
The transaction volume for the fresh food e-commerce industry reached US$13.6 billion in 2016, and is expected to reach US$35.6 billion in 2018, according to I Research, a Chinese internet business research firm.