Alibaba Health inks deal with Thai firm as part of food safety push

Alibaba Health Information Technology has launched a food tracking service as the Hong Kong-listed health care flagship of Alibaba Group taps into consumer safety to revive its business after setbacks brought about by sudden regulatory changes.

Alibaba Health inked a deal with Thailand’s CP Group on Wednesday, launching a service that lets Chinese consumers track the origin and authenticity of eggs produced by the group’s China operation by using smartphones to scan quick response codes on egg cartons.

The deal is a major step towards diversifying Alibaba Health’s business after the central government decided in February 2016 to end mandatory use by drug trading enterprises of its medicine identification, authentication and tracking system on the mainland, a service that accounted for the majority of the company’s revenue.

Alibaba Health to expand its pharma e-commerce business

Alibaba Health adapted technology it used in June last year to launch a commercial tracking system to track the origins of medicine and nutritional supplements, but has now expanded to food and farm produce.

Alibaba Health vice president Wang Peiyu told the South China Morning Post that the company sees strong demand from food producers, consumers and the government for a solution to tackle food safety issues.

“And strong demand usually equals a big commercial market,” he said, without elaborating on the specific size of the food tracking market.

About 4,500 companies, mostly in the pharmaceutical business, use Alibaba Health’s commercial tracking platform. Leveraging Alibaba Group’s advantages in e-commerce and Alibaba Health’s 10-year experience in tracking technology, Wang said there is more to offer than simply tracking the origin of food.

“We can use the system to help producers track their products, feeding them data that can help them better manage their operation, reaching and engaging with customers more efficiently,” he said.

By scanning quick response codes, buyers of CP Group’s eggs can even be redirected to CP Group’s online store on Alibaba’s Tmall shopping platform to make online purchases.

“Through the Alibaba Health tracking system consumers will have a better picture of what kind of effort we have put into improving food safety,” said Wang Aizhu, president of the sustainable development department at Chia Tai CP Trading Development, the China operation of CP Group. “With government and consumers paying more and more attention to the quality of food, companies who produce safe products will see the pay off in future.”

In February this year the Chinese government issued guidelines encouraging e-commerce companies to introduce systems that can track products sold on their online platforms as part of an effort to improve food and medicine safety in China.

Alibaba Group owns the South China Morning Post.