Alibaba’s business-to-consumer retail platform Tmall said it will invest an additional US$300 million in online fresh food vendor Yiguo, in a bid to strengthen its online grocery and fresh food business. Tmall is hoping to leverage on Yiguo’s existing cold chain delivery network to achieve nationwide delivery of fresh fruit and vegetables within 24 hours from the time of order…Full Article: ECNS.cn Aug 2017

Key Points

  • Alibaba noted that in addition to the 17 warehouses that are used by Tmall Supermarket to process orders, the company will construct 12 more warehouses in the future [no date given].
  • From 2016 to 2017, according to a report by the China E-commerce Center, China’s online fresh food market size will increased an estimated 64% to CNY 150 billion (~USD 22 billion). However, only one percent of such online vendors turn a profit.
  • Founded in 2015 and headquartered in Shanghai, ExFresh is a cold chain delivery subsidiary of Yiguo E-Commerce. As of August 2017, ExFresh had 11 cold chain centers located in 10 Chinese cities. By 2020, the company hopes to have 56 warehouses.

ChinaAg Comments

  • In late June 2017, Alibaba’s Yiguo.com e-commerce platform began selling US beef (sirloin, rib-eye, etc.) in the Shanghai market.
  • In May 2017, Alibaba announced it would purchase an 18% stake in Lianhua Supermarket Holdings from Yiguo.com, a fresh produce e-commerce platform (see Suning). Yigou.com will retain a 1.17% stake in Lianhua.
  • In December 2016, Suning Commerce Group was leading a new round of financing (~US$200 million) to invest in Yiguo E-Commerce. In November 2016, Alibaba’s Tmall (November 15th to 21st) and Yiguo.com (November 17th to 30th) held online promotions for Ecuadorian mangoes (Tommy Atkins variety).
  • In October 2016, Yiguo E-Commerce invested S$24 (~US$17.25 million) in SunMoon Food Company, a Singaporean fresh fruit distributor. During the same month, Suning and Alibaba announced they would jointly invest CNY 1 billion (~US$148 million) to establish an e-commerce company in Chongqing. The Chongqing e-commerce joint venture will be 51% controlled by Suning (CNY 510 million or ~US$75.1 million) and 49% by Alibaba (CNY 490 million or ~US$72.3 million).
  • Founded in 2005 and headquartered in Shanghai, Yiguo E-Commerce is an e-commerce platform that focuses on selling of food products including fruits (domestic and imports), meat (e.g. beef, pork, lamb), poultry eggs, dairy, seafood, vegetables, processed foods (e.g. snacks, frozen food, sausages, sauces, etc.), juice, and wine. In March 2016, Yiguo E-Commerce received an undisclosed amount of financial investment from KKR (private equity firm) and Alibaba (shareholder of Yiguo).

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