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A food sector that clicks with buyers

Updated: 2013-12-03 09:27
By Meng Jing and Shen Jingting ( China Daily)

Thanks to a growing number of fresh produce e-commerce sites, with a simple click, more and more Chinese can buy groceries from around the world, whether it is Chilean blueberries or Norwegian salmon.

JD, the Chinese e-commerce giant that found fame by selling consumer electronics, said in early November it was joining forces with Asia's biggest agricultural products market - Beijing Xinfadi Farm Produce Market - to sell fresh goods online.

Xinfadi market, which last year sold 13 million metric tons of produce worth 44 billion yuan ($7.2 billion), has launched a flagship virtual store on JD.

A food sector that clicks with buyers

The newly opened online portal enables Beijing residents to order online and get fresh vegetables, fruits and meat delivered to their doorsteps.

Teaming up with Xinfadi market is the latest move for JD's food and farm product sector, which is seen as a strategic sector for the company's future growth.

"Farm produce buyers are a group of people we pay a lot of attention to because they are likely to come back and shop online from time to time. That's a big difference compared with electronics purchasers," said Han Chengxin, general manager of JD's food and farm produce department.

Han said the company's fresh produce business reported an average month-to-month growth rate of 15 percent since JD launched a vertical site in 2012 called Shengxian food, which means fresh and frozen food.

JD is certainly not the only one gearing up to expand into fresh and frozen food delivery in China. Driven by rapidly growing demand, high profit margin and the extreme loyalty of users, many Chinese companies, e-retailers or not, are making moves into the sector.

Sfbest, a food website owned by leading Chinese courier SF Express, announced in September it would expand its fresh and frozen business from two cities to 11 in China. Yhd, a leading Chinese online supermarket that is majority-owned by Wal-Mart Stores Inc, also launched delivery of fresh food, such as fruits and vegetables, from Shanghai to Beijing in August.

"In terms of the e-commerce business in China, there are three sectors that have great business opportunities: clothes, consumer electronics and food.

"In 2012, online sales accounted for about 10 percent of total sales of both clothes and consumer electronics in China, while less than 1 percent of the total sales of food were made online. This is the main reason for us to tap this potentially huge market," said an spokesperson, adding that about 30 percent of the company's total stock is fresh and frozen food.

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