China’s e-commerce giants compete for share in fresh food market
July 2, 2013 Leave a comment
China’s e-commerce giants compete for share in fresh food market
Staff Reporter
2013-07-02
Several online retailers in China have joined the online war in the fresh food market including Amazon China’s seafood platform, which jumped into the fray in June. Meanwhile, domestic e-commerce giant 360buy Jingdong Mall also launched a fresh food platform in conjunction with China National Cereals, Oils and Foodstuffs Corporation in July, reports the Beijing-based China Business Journal.Sellers first began to sell fresh food online in 2008, with the majority of the pioneers failing, such as online food market Yoocai, due to poor supply chains, logistics, and management.
Many believed that the fresh food market was unsuited to online sales but larger businesses began to foray into the industry last year including Jingdong Mall, Amazon China, and Taobao, with the internet giants cashing in on their existing storage and logistics services.
Retail stores including Wal-Mart, Carrefour, and Tesco, which are facing mounting rental prices are also looking to attract customers online and have begun to offer similar services. It is believed that stores may soon withdraw from upscale locations and reduce their total number of stores in the near future to increase their presence online and reduce costs.
An effective supply chain is key to the fresh food business, the paper said, adding that the golden rule for electronic retailers wanting to enter into the fresh food market is to reduce inventory, shorten the distance between the origin of produce and consumers, and maintain food freshness.
Traditional fresh food sellers usually have a series of suppliers in their supply chain, from farmers to manufacturers and agents at different levels but for electronic retailers adding each level raises costs and reduces quality.
Some internet retailers in the fresh food business work directly with farmers or upstream suppliers to shorten the supply chain and cut costs. Many businesses are also encouraging customers to make large orders in order to cut logistical costs. However, Yang Lin, owner of the online retailer Zhaixian.com, said his strategy is to encourage his customers to purchase fruits and vegetables on a daily basis.
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