Food: In­ter­net firms play key role in ser­vices

China Daily (Canada) - - BUSI­NESS -

at Alibaba, said in­May.

By flex­ing its In­ter­net mus­cle, the on­line heavy­weight has been able to launch a “one-stop so­lu­tion ser­vice” on 1688.com. This means small firms can go di­rect on­line to place or­ders in­stead of deal­ing with dis­tri­bu­tion com­pa­nies and whole­sale out­lets.

“Com­pared with the tra­di­tional way of im­port­ing for­eign prod­ucts, our plat­form can help en­ter­prises save be­tween 20 per­cent and 40 per­cent in costs and re­duce de­liv­ery times by 15 to 60 days,” Liu Fei, se­nior di­rec­tor at 1688.com, said.

In a move to fur­ther stream­line its op­er­a­tion, the In­ter­net plat­form is work­ing on a bar cod­ing sys­tem with China’s cus­tom au­thor­i­ties, so cus­tomers can track their or­ders.

Still, when it comes to the lo­gis­tics chain, the ma­jor­ity of on­line play­ers are us­ing es­tab­lished ex­press de­liv­ery com­pa­nies to ship their goods.

“Fresh food, such as seafood pro­duce, meat and fruit are per­ish­able and vul­ner­a­ble to bac­te­ria,” Xu Yong, chief con­sul­tant for the ex­press de­liv­ery and lo­gis­tics web­site cecss.com, said.

“They need to be trans­ported at low tem­per­a­tures and that is where rec­og­nized lo­gis­tics ser­vices come in.”

In­deed, ex­press de­liv­ery plat­form Sf­best is ex­pand­ing its na­tion­wide cold stor­age busi­ness to cope with in­creased de­mand from the seafood sec­tor.

The on­line site is owned by SF Ex­press, which is based in Shen­zhen, Guang­dong prov­ince, and is one of the largest lo­gis­tics com­pa­nies in the coun­try.

“Our low-tem­per­a­ture de­liv­ery ser­vices are in about 48 cities, in­clud­ing third-tier ones such as Lang­fang in He­bei prov­ince,” Kong Fang, di­rec­tor of the cold-chain lo­gis­tics busi­ness at SF Ex­press, said.

The com­pany has al­ready set up 13 world-class re­frig­er­ated ware­houses across China in cities such as Bei­jing, Shang­hai and Xi­a­men. Another seven will be fully op­er­a­tional by the end of this year to make sure pro­duce is as fresh as when it left its orig­i­nal des­ti­na­tion.

“We main­tain that stan­dard through­out the whole cold stor­age chain, start­ing from the air­craft we use to im­port seafood from for­eign coun­tries to the trucks that trans­port it to our ware­houses and even­tu­ally to the doors of our cus­tomers,” Kong said. “Ve­hi­cles and ware­houses are all equipped with cool­ing de­vices to main­tain low tem­per­a­tures, with some be­low -18 de­grees Cel­sius,” he added.

A com­put­er­ized sys­tem is at the heart of SF Ex­press’ lo­gis­tics busi­ness. It reg­u­lates tem­per­a­tures in the com­pany’s ware­houses and makes sure or­ders are de­liv­ered within the rec­om­mended time frame.

“Con­trary to what out­side peo­ple think, the cold-chain sys­tem is highly com­put­er­ized with so­phis­ti­cated re­frig­er­at­ing equip­ment,” Xu, of cecss.com, said. “It is a cash-burn­ing project.”

To keep costs down, ma­jor on­line com­pany JD.com Inc has put to­gether part­ner­ship deals with thou­sands of con­ve­nience stores across China. Fresh seafood or­dered on its In­ter­net site is now de­liv­ered to shops be­fore be­ing picked up by cus­tomers.

“Part­ner­ing with brick­sand­out­lets is a way to re­duce lo­gis­ti­cal costs,” Xu said. “It works well with some con­sumers, but home de­liv­ery ser­vices are the fu­ture. When the lo­gis­tics costs come down, the on­line mar­ket for seafood will re­ally take off.”

Ma Si con­trib­uted to this story

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