Fresh Food E-Commerce Not the Low Hanging Fruit Online Sellers Had Hoped For
Yicai Global
/SOURCE : Yicai
Fresh Food E-Commerce Not the Low Hanging Fruit Online Sellers Had Hoped For

(Yicai Global) March 14 -- Since Jack Ma, Alibaba Group Holding Ltd.'s [NYSE:BABA] chairman of the board, proposed a retail concept in which deeply integrated online and offline channels could bring new business logic to the fresh food industry last October, fresh food e-commerce has been regarded as a low hanging fruit. Some online sales platforms have had trouble grabbing it.

"Pure e-commerce platforms have been unable to meet users' shopping needs and habits. Omni-channel marketing is the inevitable result of the e-commerce upgrade in the internet environment," Xianda365.cn Chief Executive Li Wenxian said.

"The bottleneck for fresh food e-commerce industry lies in fresh food, not e-commerce," said Chen Junqi, Yiguo.com's senior operations director. Yiguo.com bought a 21.17 percent stake in Lianhua Supermarket Holdings Co. from Yonghui Superstores Co. for CNY850 million (USD123 millions) for its new retail layout at the end of last year.

Yiguo.com, under Alibaba, hopes to take advantage of mature convenience store and supermarket channels to expand its new retail market.

"Yiguo.com will not open its brick-and-mortar stores, but it has started distribution in chain convenience stores in cities such as Shanghai, Beijing and Hangzhou. In addition, delivery to areas within Shanghai Outer Ring Road is available within 27 minutes," Chen said.

Yiguo.com has established cooperation with Haier and other kitchen and home appliance manufacturers to move closer to consumers. The site collects kitchen related consumption data. Yiguo.com and Haier hope to jointly establish a business platform for kitchens that allows consumers to use "push-button" ordering on refrigerators.

Other e-commerce operators such as Alibaba's Hema Fresh Food and Yonghui Superstores' Super Species have eyed this new business. Both companies have engaged in fresh food e-commerce and have new retail representatives in the fresh food field in certain area, not nationwide.

Hema Fresh Food adopted the "online e-commerce, offline store" business model, and its physical stores have more functions than traditional retail stores, integrating "fresh food supermarket, dining experience, and warehousing for online business." Online business mainly refers to food takeaway and fresh food delivery, and offline business includes fresh food supermarket and dining experience.

Among the more than 3000 plus types of goods supplied by Hema Fresh Food, 80 percent are food, of which 20 percent is fresh food. That ratio will be increased to 30 percent. Almost all of Super Species' business mirrors that of Hema Fresh Food.

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