Plans for more online sales channels for fresh fruit in US
Alibaba: 'We have to learn about importing American strawberries'
On Wednesday, Alibaba's shares rose 3.5%, but at the opening of the market on Thursday they had dropped to 1% again. At the conference, Jack Ma, pointed out that "It is difficult to transport products to the Chinese consumer within three days after harvesting." The South China Morning Post quoted Jack Ma's words like this:
"If we can handle fresh fruit and seafood, it should be easy to learn how to import all other products. A challenge is that China has a huge population and only a little soil. If this many people want to eat good products, we should learn how to import them."
Driscoll, which sells strawberries, raspberries and other agricultural products, is a privately owned family company with over 100 years of history. Its headquarters is located in California. It cooperates with independent producers, such as a group in Mexico. A time table on the Driscoll website shows that it has "expanded to China" at the beginning of this century.
According to PR company Fleishman Hillard, Alibaba says:
"In China, people have a strong demand for quality products, especially for fresh agricultural produce. In fact, according to a production report, 36 million families in China buy fresh produce. These numbers will have doubled by 2020."
A quick online search shows that there are 455.9 million families in China. Approximately 12% of these families has bought fresh produce online at least once last year. Morgan Stanley estimated that more than a third of the online buyers worldwide would buy online again in 2016. This would be 21%, compared to 2015. A research has shown that America has seen the largest growth in online sales of fresh produce, from 8% in 2015 to 26% last year. This explains Amazon's plan to purchase Whole Foods.
In China, the large scale production has created panic. Last year's scandal of contaminated milk has damaged the producers of milk powder for babies, such as Danone, Abbott and Mead Johnson, which was purchased for 17 billion dollar by Reckitt Benckiser Group. Moreover, the problem with Chinese meat quality has damaged restaurant chains, such as Yum China.
Source: Barrons