- Chinese e-commerce companies are assisting Chinese farmers.
- They strive to create their own independent supply chains.
- The Chinese government is enacting policies aimed at boosting the food market.
Alibaba and Pinduoduo are pushing innovation in China’s agriculture industry as they strive to dominate the food distribution market. The current competition was triggered by the food distribution crisis that emerged last year following the onset of the corona virus crisis.
In a nutshell, the Covid-19 pandemic disrupted farming and laid bare the fragility of food industry supply chains, and now they have become of importance to the Chinese population.
To prevent a repeat of the situation, private e-commerce firms in the country are rushing to streamline the industry and create independent supply channels.
In Fujian Province, Alibaba is making moves by providing chicken farmers with smart bracelets that constantly track the health of their brood. And in the North, JD.com is assisting rice growers in enhancing their produce by supplying them with smart sensors which transmit real-time insights on their irrigation efforts. Meanwhile, in Yunnan, Pinduoduo is using artificial intelligence to boost strawberry farming.
China currently has the largest population in the world and so the well-being of its people is heavily reliant on its ability to produce nutritious food grown sustainably. That’s said, the East Asian nation only has about 7 percent arable land, and this poses some unique challenges.
A Change in Government Focus
Right now, food security is among the Chinese government’s most important agendas, and more pressure is being put on its agricultural resources to produce greater quantities of food.
The approach has been outlined in the nation’s annual rural policy guideline, referred to as the “No 1 document”.
An Overview of the E-commerce Food Industry
The online Chinese grocery market is expected to grow to about 820 billion yuan ($127 billion) by 2023. This is according to iResearch. Alibaba, the B2B e-commerce giant is already muscling in to increase its stake in the market by investing in the Sun Art Retail Group Ltd hypermart whose main offering is food merchandise.
Meanwhile, a collective of smaller rivals such as MissFresh and Xingsheng Youxuan are jostling for a share of the increasingly crowded space and are already fundraising to obtain the billions of dollars needed to capture the lucrative food distribution market.
The Chinese Government is Focusing on the Food Market
Improved cultivation and breeding techniques are currently listed high among China’s top technology priorities alongside Artificial Intelligence and quantum computing.
According to JD.com, its current smart farm projects are partly funded by the Chinese government through subsidies.
China’s most recent push for greater food security began last year when President Xi Jinping unveiled the “Clean Plate” campaign. The program was aimed at ensuring reliable food supplies and prevent a repetition of the devastating 1959 Great Famine which led to the death of millions.
Early warning signs of a food crisis in 2020 manifested in skyrocketing agricultural produce prices. Pork prices, for example, climbed by over 80 percent during the onset of the coronavirus.