Alibaba Group Holding Ltd. has been taking well determined steps to expand its operations beyond its existing network in China. The ecommerce giant is developing strategies and ability to deliver perishable goods to the consumers across China with three new distribution centers for fresh food in Shanghai, Guangzhou, and Beijing. The news about the expansion of their distribution network, was announced by the company on Tuesday.
These “cold-chain” distribution units is expected to be owned by Cainiao and its partners. Cainiao is a platform established by Alibaba to create a bridge between the regional shipping companies around China, to help vendors effectively coordinate deliveries across China. Cainiao also has plans to expand its network of cold chain delivery services across 50 major cities in China by the end of 2015. This move will define a concentrated effort taken to improve the infrastructure available to vendors registered in Tmall.com and Taobao Marketplace.
Online retailers in China has been lately struggling to keep up with the rising demand for fresh food. The decision to expand the distribution network by Alibaba will help vendors carry on undisrupted supply of fresh food to consumers located across the country. According to a recent estimate released by Cainiao almost 80% of the vegetables and fruits in China are transported at a room temperature, which ultimately leads to the spoilage of at least 40% of the food.
Speaking on the present scenario head of a leading fresh food delivery company in China, Maggie Chen said that the industry highly requires efficient cold chain delivery systems to facilitate the business to consumers segment.
It was only last month that JD.com, arch rival of Alibaba, invested in FruitDay (produce-importer). This has also created additional cold chain infrastructure to facilitate storage, shipment, and tracking of fresh produce across China.