Overall Market Size And Online Percentage
Fresh produce has long been seen as an undeveloped area within e-commerce.
The penetration rate of e-commerce in the Chines apparel market is ~35% in 2017, while the fresh produce category’s is only in the single-digit range (but growing fast!).
The overall size of fresh produce market in China is around 5,000 billion RMB. So the online sales is ~1% in 2015 and ~4% in 2018.
First Round
The first wave of exploration is an extension of traditional e-commerce platform + specialized logistics (cold chain).
Miao Fresh (by Tmall, Alibaba) and JD Fresh (by JD) are the two examples (and first movers) in this round.
Self-built logistics has been one of JD’s core capabilities for a long time. And the war in fresh produces, requiring an upgrade in cold chain, has made JD Fresh a very competent player in this field (besides the upgraded potential in logistics-as-a-service) .
Tmall seems to have a better position in recruiting overseas/premium sellers (cherries, lobsters, crawfish, etc.)
Meanwhile, Alibaba (Tmall) has been investing in Yiguo continuously. In March 2016, Yiguo raised ~$250 million Series C from Alibaba and KKR.
Yiguo’s subsidiary ExFresh (安鲜达), China’s largest cold-chain company established to serve the fresh food via e-commerce, according to a new release from KKR in 2016.
And Suning, a strategic partner with Alibaba and a very strong player in 3C retailing, led a round of $200 million (Series C+) for Yiguo in Dec 2016.
Then in Aug 2017, Yiguo finished its Series D of $300 million from Tmall (Alibaba).
But the battle in fresh produces is more than the battle in cold chain + traditional e-commerce. It involves exploring the new format of retail.
And so comes the Second Round…