JD.com’s 7Fresh and Yonghui Superstores are set to co-invest RMB 5 billion (nearly USD 750 million) in Thailand to establish a direct sourcing and distribution line for tropical fruits, e-commerce-focused outlet Ebrun reports.
7Fresh is an offline fresh-food store launched by JD.com in January 2018, and a direct rival to Alibaba’s Hema supermarket chain, while Yonghui Superstores is one of China’s largest and most established supermarket chains. The Shanghai-listed grocer counts Tencent as a 5% stakeholder. Tencent also owns a 20% stake in JD.com.
In addition, 7Fresh has signed a memorandum of understanding with several Thai agricultural brands to purchase RMB 1.5 billion (USD 223 million) worth of durians, mangosteens, longans, and coconuts over the next three years.
Many of China’s leading e-commerce players have invested in Thailand as they seek to satisfy the country’s growing appetite for tropical fruits and get a foothold far up the supply chain.
Earlier this week, Suning signed an agreement to buy 20 million coconuts from the Thai province of Ratchaburi. Alibaba Group holds an ownership stake just shy of 20% in Suning, while Suning has a 0.51% stake in Alibaba Group.
And last year, Alibaba signed a three-year, RMB 3 billion deal (roughly USD 447 million) with the Thai government to purchase durian, which would then be sold both online and offline via its T-Mall platform, Hema, and RT-Mart, a hypermarket chain in which Alibaba holds a 36% stake.
The e-commerce giant went on to sell 80,000 durians, weighing a combined 200 tonnes, on T-Mall in just 60 seconds during an online promotion. Several months later, in July 2018, Alibaba signed another purchase deal worth THB 360 million (around RMB 76 million or USD 11.3 million) for at least 3000 tonnes or about 800,000 durians from three eastern Thai provinces.
China is the world’s largest market for Thai fruits. Thailand, in turn, is one of the largest exporters of fruit to China. In 2017, nearly USD 12 billion (roughly RMB 81 billion) worth of Thai fruit was imported into China. Thailand represented 21% of China’s fruit imports by value, the highest share of any fruit-exporting country to China.
Editor: Nadine Freischlad
Chinese companies are flocking to India, but their optimism needs to be temperedChinese companies are flocking to India, but their optimism needs to be tempered
Nikkei teams up with 36Kr in Asia tech news coverageNikkei teams up with 36Kr in Asia tech news coverage
Grady Laksmono of Moka on supporting small businesses: Startup StoriesGrady Laksmono of Moka on supporting small businesses: Startup Stories
The continent of the 21st century: Venture VoicesThe continent of the 21st century: Venture Voices
Mile a minute: Early StageMile a minute: Early Stage