One of China’s largest online business-to-business marketplace for seafood, Gfresh, is expecting its sales to reach CNY 10 billion (USD 1.5 billion, EUR 1.3 billion) by the end of next year as the Chinese market continues to see an “explosion of online fresh food retailers,” said company founder Anthony Wan.
Launched just three years ago and backed by Alibaba, Gfresh’s sales totaled CNY 3 billion (USD 457.6 million, EUR 384.5 million) last year, up from CNY 1 billion (USD 152.5 million, EUR 128.2 million) in 2015, with currently more than 1,000 sellers from 28 countries and in excess of 12,000 buyers on its platform.
Seafood platforms have transformed the cross-border wholesale trade in China, said Wan, who explained that what Gfresh has done is reduce the minimum customer order to a single box, while the platform consolidates all the orders into a single transaction.
“It’s no more work for the supplier, but in reality what they have done is sell one box each to every restaurant directly. And the value proposition is very clear for a buyer who can buy one box for the same price as 100 boxes.”
Consequently, Gfresh has become the largest seafood importer in China, shipping live products door-to-door to 20 major Chinese cities within 24 hours, at the same time as providing quality guarantees and payment protection through its proprietary system, G-pay.
“For a seafood producer, that means you can sell to thousands of restaurants all over China through a single app,” said Wan.
Consequently, Gfresh has become the dominant means of purchasing many overseas seafood products and this trend is expected to increase further in the future, he said.
With online shopping and payments now a way of life in China, Wan said the total estimated business-to-consumer sales for Chinese fresh food platforms in 2017 is already at “a staggering” CNY 150 billion (USD 22.9 billion, EUR 19.2 billion) up from just CNY 4 billion (USD 610.2 million, EUR 512.7 million) in 2012.
There are currently more than 4,000 of these platforms now trading, most of which are in the B2C channel.
“The trend is very clear. It used to be that people used to go to the store to shop, but now the majority of millennials in China only shop online.”
Wan added that China’s seafood market is still only at the beginning of its online transformation and that much more growth will come with the country’s middle classes estimated to reach 850 million within the next 12 years and technology set to speed up access to new markets.
“If you are a supplier right now there is no doubt an immense opportunity to reach these new segments and cities," he said. “The winners are going to be the companies that take action today."
