JD.com to spend $1.2bn on US meats

JD.com has committed to buying $1.2bn worth of fresh and frozen meat from the US over the next three years. The Chinese online retail giant has made an agreement with the Montana Stock Growers Association (MSGA) to buy beef, as well as pork from Smithfield Foods. Combined, the two deals are part of a $2bn package, buying goods from a range of goods across several categories.

The Chinese online retailer has released a statement that says meat products are a very fast growing category. Direct sales of meat by volume grew more than 780% in the first half of 2017. Imported meat was 30% of those sales. Burrowing into the figures, JD.com found that online orders for fresh and frozen meat comes from first and second-tier cities. As such there is a huge potential for growth in online sales from the rest of greater China.

“These groundbreaking agreements bring together two of America’s most trusted and in-demand meat suppliers with China’s leading e-commerce platform, to the benefit of both U.S. producers and Chinese consumers,” said Richard Liu, JD.com Chairman and CEO, who participated in the signing ceremony.

According to JD.com: “The beef and pork will be cold-chain transported from the United States and stored in JD’s own warehouses in China. From there, JD can deliver it to customers in more than 100 cities across the country within 48 hours – and to many in as little as six hours. With its complete cold chain solution, JD can monitor the temperature and humidity of products from warehouse to delivery. JD’s cold chain logistics network currently includes 12 cold chain warehouses in China, enabling the delivery of fresh products to customers in 300 cities.”
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