JD.com, China's second-largest online retailer, plans to invest about 6.5 billion yuan (US$965.8 million) in Thailand over the next three years to boost its fresh food business.
A Nikkei report quoted the e-commerce giant as saying that it intends to import huge quantities of durian and other fruits that are popular in China, in a partnership with Chinese supermarket chain Yonghui Superstores. JD.com is pushing back against top e-tailer Alibaba Group Holding, which is also stepping up its offerings of fresh groceries.
A cool chain has been built
JD.com and Yonghui will source fruits from Thailand worth 5 billion yuan, mainly durians, mangosteens and coconuts. On its own, the online retailer will also buy 1.5 billion yuan worth of fruits through Thai trading houses and other companies.
Nikkei noted that fresh food is regarded as difficult to sell online due to its short sell-by date. But JD.com has been building a cold chain - a supply chain that keeps perishables at low temperatures - in 300 cities across China. It has also secured access to more supermarkets that can store fresh food.
JD.com and Alibaba dominate China's online market, together accounting for about an 80% share. But as growth is slowing in China, they see fresh food as an opportunity to expand their scope.
According to Chinese research firm AskCI Consulting, the country's fruit imports totaled US$8.4 billion in 2018, up 35% from a year earlier. Imports from Southeast Asia are particularly brisk, as the region is regarded as a source of high-quality produce.
Alibaba in talks over a logistics hub in New Zealand
In another e-commerce development, Alibaba is reportedly talking to the New Zealand Government about setting up a regional logistics hub in that country.
The NZ Herald reported that if the project gets the green light to set up in New Zealand, it would likely be a partnership between Alibaba and NZ Post in a regional centre, such as Palmerston North on New Zealand's North Island.
According to New Zealand’s Regional Economic Development Minister Shane Jones, who met with top Alibaba officials in Hong Kong in March, senior Alibaba officials have been invited to New Zealand to further explore the opportunity.
Nol van Fenema