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China: From freight trains to cold chains

China’s growing demand for safer and higher-quality fresh food offers huge opportunities for imports from Europe. But to turn these opportunities into reality, investments are needed in China’s cold chain infrastructure.

China’s appetite for fruit and vegetables, dairy and meat is expected to increase by 17% between 2015 and 2025. Urbanisation is a strong driver, as people in cities tend to eat more fresh food compared to those in rural areas. Opportunities for imports are increasing as China’s demand for fresh, safe and high-quality food is outstripping its capacity to produce and deliver domestically. Europe is able to address this need.

Online can accelerate imports of fresh food
In the past three years, fresh food has become the focus for many online retailers, increasing sales at an astonishing pace. Imported foods are crucial to this growth, with many online retailers using imported fresh products as a key selling point. In the coming years, fresh food via online retail is expected to show annual growth rates of 40% to 50%.

China’s online fresh food sales are growing at an astonishing pace.

The New Silk Road provides opportunities

For European exporters, the New Silk Road—the Yu’Xin’Ou railway connecting Rotterdam and Chongqing—provides a new way to tap into this growing market. As the train corridor reduces transport times by over 30 days compared to shipping, opportunities are emerging—for instance for soft fruits, cherry tomatoes and veal, as well as for horticultural products from the Netherlands.

The growth in consumption of perishable food in China will only continue if supply chains deliver on quality and safety. To a large extent, this depends on the proper cooling of products during storage handling and transport. It’s one thing to produce the sought-after fresh food and send it on a train to China, but if the domestic cold chain infrastructure isn’t able to keep up with the level of growing imports, the efforts can—quite literally—go to waste.

Cold chains are a hot investment item

Huge investments are needed to improve China’s cold chain infrastructure

China’s cold chain sector is currently lagging, and the investments needed for improvement are huge: an estimated USD 85 billion is needed in the next ten years. Additionally, China’s cold chain companies must start adapting their business models into higher-value strategies in response to the higher service needs of their clients. International logistics companies—with their knowledge and operational experience—can play a pivotal role in these developments.

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