Chinese online retailers announce expansion into more local sourcing
China’s e-commerce giants are battling to secure local suppliers, a move likely to benefit Chinese seafood producers.
Hema (also known as Hema Xiansheng and “Fresh Hippo”), which is controlled by tech conglomerate Alibaba, has announced it is setting up 1,000 “Hema Villages” between now and 2025 in an effort to improve sourcing supply and quality, while also lifting farming incomes.
An offline-online distributor and supermarket operator, Hema would “introduce new methods” to farms and aquaculture operators, Hema Head of Development Yuan Ruo Fan recently said at a conference organized by China’s Ministry of Commerce. Fan said the firm would train producers in “digital production” to improve consistency and quality.
“Prices will improve,” Yuan said.
Hema’s announcement comes at the same time as Beijing-based grocery delivery firm Missfresh announced it will expand its supply-chain network to include 200 farms and 350 factories and processing facilities across China “that directly supply Missfresh with fresh goods.”
The NASDAQ-listed online grocer has said the move will help it increase margins and lower prices by eliminating middle men. It also said that this development would reduce cold chain costs and inventory loss. The firm intends using big data to predict likely sales patterns on hot autumn sellers like fresh hairy crabs –which the firm says it can deliver nationwide in 24 hours.
In the past year, Chinese tech firms have faced intense regulatory scrutiny over issues like price-fixing and data collection. The Hema and Missfresh announcements align with a long-held twin Chinese government goals to increase rural incomes while also guaranteeing the quality and volume of China’s food security.
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