China: JD.com targets temperature-controlled food delivery
Beijing, China: Chinese e-commerce giant JD.com has singled out cold chain fresh food delivery as its next major growth market.
The company has developed warehousing and distribution networks across China over the last few years, rejecting the traditional third-party delivery model. JD.com is the biggest operator in online direct sales in China, and the second largest in the world after Amazon.
“In categories like mobile phones, laptops, baby formula and FMCG, we’re number-one all over China; and now, even though it’s currently a relatively tiny market, we believe we can replicate the success in fresh foods,” said Clark Meng, JD.com’s director of global sourcing, fresh business unit.
According to Meng, cold chain e-commerce is still very new and has tremendous potential, considering only 3% of China’s $2 trillion fresh produce market is generated from online purchases.
Speaking at Cool Logistics Asia in Hong Kong, Meng said there were around 5,000 online retailers involved in fresh food in China, but that number had fallen from 10,000 within the past couple of years because high last-mile logistics costs were eroding profit margins.
Meng said the challenges for cold chain e-commerce were a lack of storage facilities, high execution costs and inefficient quality control which led to poor customer experience.
Posted on September 22, 2016
by Edwin Kalischnig