Alibaba’s grand strategy to feed China’s middle class
This article was co-authored by Lucía Wei He.
During last year’s record-breaking Singles Day online shopping extravaganza, there were some surprising top-selling products among the usual suspects of electronics, cosmetics and apparel: In the first hour of 11/11, T-Mall reported (Chinese link) that it had sold 13.6 million Ecuadorian shrimp, 140 thousand Mexican avocados, 920 thousand Southeast Asian lobsters and 1.4 million kilos of Australian beef. JD, meanwhile, boasted a 270% year-over-year increase (Chinese link) in online sales of fresh produce.
It’s no surprise that online retailers including Alibaba and JD have been fiercely battling each other over China’s fresh produce market. The explosive growth in online sales of the shengxian category (literally “raw fresh”) is one of the strongest manifestations of China’s so-called “consumption upgrade.” Driven by rising disposable income and all-too-frequent domestic food scares, such as the ongoing African Swine Fever epidemic, Chinese consumers are demanding healthier and safer food alternatives. Meanwhile, distrust in domestic producers and a tendency to favor foreign products has dramatically increased the amount of food sourced from overseas.
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