Fresh Food Industry Goes Digital
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Fresh Food Industry Goes Digital
Across the world, social distancing has become the norm, and the concept of staying at home to stay safe is being preached by governments as they try to control the spread of COVID-19. As a result, many businesses and consumers have turned online, resulting in a boom for the e-commerce industry. Jumping on the digital bandwagon is the fresh food industry, as it reconceptualises its modus operandi to cater to consumers’ needs.
The merging of technology and the fresh food industry may seem unusual, especially due to the nature of fresh food being void of technological involvements, but those in the industry have made it work to allow consumers to continue to receive top-of-the-line fresh products in the comfort of their own homes. In China, the demand for deliveries of fresh food, such as vegetables, meat, and other fresh produce, saw a significant surge when many Chinese began ordering online during the lockdown.
One fresh food company that saw a boost in its business was Miss Fresh, a mobile e-commerce platform that was founded in 2014 and that delivers fresh food within the hour. This start-up was already on an upward trend prior to the pandemic. In 2019, it shared its goal of generating a revenue of $14 billion by 2021, and it received investments from names such as Goldman Sachs and Tencent Holdings Ltd. COVID-19 accelerated that growth and the company’s popularity, as many Chinese – including the older generation, who are culturally in favour of purchasing fresh food at wet markets – turned to the application to meet their daily needs.
Miss Fresh, which to date has served over 25 million customers, has secured funding of almost $500 million this year, as investors can see the potential for further growth in the online fresh food industry in China. This can be considered a pretty bold move by the investors, as the online platform for fresh food sales is estimated to account for between 5% and 8% of the country’s overall fresh food industry revenue.
However, it is without doubt a high-potential industry, as the younger demographics of the country are more open to making fresh food purchases online rather than in traditional wet markets. If anything, the COVID-19 pandemic has illustrated that even those who are culturally averse to making purchases of fresh produce online – e.g. the older generation of Chinese – are able to adapt to this technological advancement should the need arise. Additionally, other key players in the country’s fresh food industry, such as Hema Store, which is backed by Alibaba, and Dingdong Maicai, have all seen growth in their operations, especially during the current global pandemic.
The digitalisation of the fresh food industry in Asia is also evident in other countries, such as Singapore, Malaysia, and the Philippines, among others. In Singapore, MarketFresh, a company that delivers fresh produce from wet markets to consumers’ doorsteps, saw its daily orders surge threefold during the country’s Circuit Breaker period.
Despite the country slowly relaxing the rules and regulations surrounding its lockdown, companies offering fresh food delivery services, such as Lazada and Amazon Prime, are still seeing significant growth, as many are still opting to make their purchases online. According to research by Bain & Company, the likelihood of “essential online shopping”, which includes groceries and fresh food, dying out is unlikely, as “one in three users who were surveyed” stated that they would continue to make their purchases online even if the current situation improves.
In the years to come, it is expected that the digitalisation of the fresh food industry will continue to see exponential growth as companies incorporate different aspects of technology, such as artificial intelligence, to further boost their market share via online platforms.