Alibaba Group said Thursday it led a $300 million, D-round investment in Yiguo.com, China’s largest B2C fresh produce online marketplace.
Yiguodelivers perishable goods, such as fruits, vegetables, meats and fish to more than 200 cities in China, offering most of its customers second-day home delivery. Shoppers in major cities such as Beijing, Shanghai, Guangzhou and Chengdu receive their purchases on the same day.The funding, Alibaba’s fourth injection of capital into the grocery-shopping platform, will be used to further develop Yiguo subsidiary ExFresh, China’s largest cold-chain logistics platform.
Alibaba said it plans to leverage ExFresh to expand its delivery reach and gain better control of its distribution and logistics while allowing its Tmall Supermarket division to work more closely with Yiguo, the Hangzhou, China-based company said. Alibaba would also be able to ensure faster delivery of the fresh-food imports increasingly sought by Chinese consumers.
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Alibaba Group Vice President Jet Jing said the partnership between Tmall and Yiguo had already improved Alibaba’s supply-chain services, bringing premium produce from over 147 countries, such as the U.S., Argentina, Norway, Australia are 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,” he 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.
Over 1 billion tons of perishable food is consumed in China per year, among which more than 50 percent require cold-chain transportation, according to Yiguo. The company said the market still has plenty of room to grow as only about 19 percent of the China market has access to cold-chain technologies, compared to similar technologies that cover 95 percent of the market in Europe, the U.S. and Japan.
Take a tour of Freshippo supermarket, the best example yet of New Retail in action.
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 the Freshippo (also known as Hema) mobile app to order fresh foods for delivery to their homes within 30 minutes.