(Yicai Global) July 22 -- Fruit Day, an online fresh produce retailer, has closed almost all of its online-to-offline stores after upgrading its delivery service.
Fruit Day E-Commerce Co. has shut all of its Beijing stores and almost all other outlets in places such as Shanghai, according to a person in charge at the Shanghai-based company.
"We upgraded our services earlier this year," the person said. "'Daily Delivery' has been upgraded to 'Lightning Delivery,' serving densely populated areas such as central business districts. We will promote this service to a wider area once we have enough experience."
Fresh goods e-commerce has long attracted a large number of entrants with its huge market. However, just 1 percent of the nation's more than 4,000 online grocers are profitable. Benlai convenience stores, operated by another online grocer, previously announced the suspension of its operations.
Fruit Day was established in 2009. Formerly a traditional fruit seller, it has set up a direct supply platform between fruit-growing regions and consumers. It has also built its own refrigerated warehouses and cold chain logistics. Fruit Day raised USD70 million last May, with JD.com Inc. [NASDAQ:JD] as its lead investor.
Investors indicated that since fresh goods e-commerce requires a very long management chain, it is very difficult to manage and involves issues such as food safety. A successful online grocer needs to be a combination of an adept traditional retailer and an online player.