China: Alibaba's Win-Chain to provide one-stop upstream supply chain solution
A newly created company currently debuting at China Fruit Logistica will work with e-commerce giant Alibaba to provide a one-stop upstream supply chain solution for the produce industry, having already signed a cooperation agreement with numerous major fruit exporters.
Fresh produce has "entered the stage of globalization"and a "pivotal position" in China, with huge future growth forecast especially for online channels, according to the newly established Shanghai Win-Chain Supply Chain Management Company (Win-Chain).
It highlighted that the annual purchase frequency has reached 121 times and the average per-customer spend is US$15.
But China's cold chain system is substandard, and so the produce industry is actively developing rapid and efficient solutions to meet the needs of consumers, it said.
At the inaugural summit of produce industry event “First Fresh 20” (F20) held last week in Hangzhou, hosts Alibaba and its affiliated company, Win-Chain, signed a joint cooperation agreement with major 20 produce companies, aimed at establishing an industry platform that facilitates the upstream and downstream of resources.
This week, Win-Chain is being introduced in the inaugural China Fruit Logistica exhibition being held in Shanghai on May 14-16.
At Fresh Fruit Portal, we spoke with the vice president and general manager of Win-Chain’s imported fruit division, Andy Zhang, to learn more about the state of the Chinese imported fruit market, Win-Chain's resources, and the advantages he says the company offers over its competitors.
Zhang said Win-Chain is part of a group of three companies - along with ExFresh and Yiguo New Retail. These companies operating under Yiguo Group, which owns the country’s largest B2C (business-to-consumer) fresh produce online marketplace, and in which Alibaba is a major investor.
The three companies work together integrating the produce supply chain, with Win-Chain gathering resources, ExFresh providing cold chain logistics and distribution services, and sales being made through Yiguo New Retail.
Zhang said this system helps suppliers to fully develop China's domestic sales channels, benefits consumers by providing them with quality products and convenience, and creates a positive impact on China's agricultural and social development.
He added that Win-Chain, as one of the organizers of F20, hopes to connect with fresh produce companies around the world to supply Chinese consumers, and will use its debut at China Fruit Logistica as an opportunity to find new suppliers that meet its demands.
"Win-Chain hopes that through this platform, it will be able to supply quality products directly to Chinese consumers, linking suppliers and service providers directly with the customers on the platform," Zhang said.
"The company is not simply trading, but rather building an ecosystem that allows upstreams and downstreams to better understand each other, and allows the information to be more transparent and data to be more accurate."
He said that in the past, fresh produce imported into China has typically gone through intermediaries, meaning there is little connection between the suppliers and the end consumer.
But Zhang says that Win-Chain will leverage Alibaba's expansive consumer data for many aims including to understand consumer preferences more accurately and break down the barriers of the supply chain, ultimately facilitating dialogue between the two ends.
Win-Chain will focus on the top five imported fruit categories to build up the Alibaba ecosystem, initially covering Southeast Asia, South America, South Africa, and Oceania. It will also develop customized products for each sales channel.
In this regard, a team from the company recently traveled to Australia and New Zealand to meet with representatives from the likes of Zespri, Perfection, Hansen and other large produce companies, and speaking in-depth with suppliers on issues like packaging and exclusive procurement of certain products.
At the F20 event last week, one of the companies with which Win-Chain signed a cooperation agreement was Peruvian produce multinational Camposol.
Win-Chain will serve as Camposol's major customer in China, selling its products both online and offline. Both parties will also carry out closer in-depth cooperation on products including blueberries, avocados and seafood.
Zhang said that Win-Chain's use of data in aspects including processing, logistics, sales and inventory turnover would help its partners improve their operational efficiency and foster innovation in the upstream industry.
He also highlighted the professionalism and experience of the company's employees, and emphasized that Win-Chain can guarantee a high level of traceability and freshness.
Zhang also explained that besides servicing Alibaba's various retail formats, Win-Chain provides services to supermarkets, convenience stores, unmanned shops, WeChat businesses and wholesale markets in the three channels of traditional retail, new retail (online to offline) and restaurants throughout the China.
As such, Win-Chain has gathered fresh produce consumption data encompassing many scenarios nationally, he said. This data can also be used in the future to decide what fresh products to offer to Chinese consumers, according to their preferences.
Zhang said that the company's long-term plans included leveraging Alibaba's global resources and building on the basic procurement volume of its internal channels.