Food: Internet firms play key role in services
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