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China: Consumer demand pushes quality upgrade of refrigerated distribution

The patterns of product distribution among markets is already set, but the same is not true for the refrigerated supply of markets. This still shows fragmentation and regional differences. In 2018, refrigerated distribution linked itself to new trends in retail. It welcomed the opportunity and the challenge. According to a report from the China Federation of Logistics & Purchasing (CFLP) refrigerated distribution maintained a medium to high pace of expansion in 2017 in the wake of qualitative upgrades in consumer structures and innovations in consumer patterns. The refrigerated distribution to markets is expected to grow by more than 20% per year in the coming five years. In 2020 the market is expected to reach a value of 470 billion yuan [74.5 billion USD].

The vice-president and secretary-general of CFLP, Mr. Cui Zhongfu, pointed out that the infrastructure of China's refrigeration industry is still weak. The infrastructure for pre-cooling, packaging, and processing in production areas is not ideal. These "flaws" limit the development of refrigerated distribution. The majority of refrigerated supply companies have outdated ideas of what service should be. There is fierce competition between homogeneous companies.

A variety of unique fruits

All these developments bring more challenges to refrigerated distribution in cities, and this forces companies in the refrigerated supply industry to innovate unceasingly. The demands for new forms of retail, refrigerated deliveries, and refrigerated supply within the city have all increased rapidly in the wake of the abrupt rise of the mobile internet. Product orders come in increasingly small sizes with higher frequencies of individualized products. This also leads to fast-paced developments in such new technologies, and new patterns, as electrical, refrigerated trucks, refrigerated packaging, and micro-warehouses in communities.

Source: Chang Jiang Commercial Paper

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