China: Alibaba leads US$300M investment round in Yiguo

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China: Alibaba leads US$300M investment round in Yiguo

Chinese e-commerce company Alibaba Group has made its fourth injection of capital into the country's largest B2C (business-to-consumer) online marketplace for fresh produce.

In a release yesterday, Alibaba said the D-round investment in was valued at US$300 million.

The Hangzhou-based company said the new investment would be used to further develop Yiguo subsidiary ExFresh, China’s largest cold-chain logistics platform.

This will allow it to leverage ExFresh to expand Alibaba's delivery reach while gaining better control of its distribution and logistics. 

In addition, it will allow Alibaba's Tmall Supermarket division to work more closely with Yiguo.

Alibaba Group vice president Jet Jing said the partnership between Tmall and Yiguo had already improved the company's supply chain services, bringing premium produce from over 147 countries including U.S., Argentina, Norway and Australia to Chinese consumers.

“With the integration between Tmall and Yiguo, ExFresh will be able to provide even better cold-chain services for fresh-food vendors," Jing said.

"The tie-up would drive a better shopping experience for customers."

ExFresh currently handles 200,000 orders a day, Yiguo said. With the latest round of investments, Yiguo will use the funds to expand the subsidiary’s infrastructure so that it can process the 500,000 daily orders expected by the end of this year and up to 5 million orders in 2020.

According to Yiguo, more than one billion metric tons (MT) of perishable food are consumed in China each year, of which more than 50% require cold-chain transportation.

In light of this, Yiguo said the market still had "plenty of room to grow" given only about 19% of the Chinese market had access to cold-chain technologies, compared to similar technologies that covered 95% of the market in Europe, the U.S. and Japan. 

The news follows Alibaba’s announcement last month that it had launched a chain of supermarkets in China to leverage the company’s “New Retail” business model, merging online and offline shopping to deliver a more-efficient and seamless experience for consumers. Consumers can visit the store to do their shopping, or use Hema’s mobile app to order fresh foods for delivery to their homes within 30 minutes.

Related story: China: Yiguo garners "greatest financing" yet in e-commerce fruit



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