What are the key measures for fresh food e-commerce to ensure cold chain safety?

Today, you bought a fresh large lobster online and had it delivered to your home, but tomorrow, will you still keep buying a chicken online?

In 2012, fresh food e-commerce boomed in the market, billed as "the last piece of cake in the lifestyle O2O sector so far." Three years on, fresh food e-commerce players have reached more than 4,000, and giants such as Alibaba, JD.com and Amazon have all joined the battle in fresh food e-commerce. But this "last piece of cake" has not been gobbled up in big bites.

Fresh food e-commerce players have also come to a clear understanding of this. "Everyone thinks fresh food is highly sticky and high-growth, for example, if there is meat today, you still want fish tomorrow, so it looks like there is huge demand. In fact, fresh food accounts for a very low share of total e-commerce transaction volume, and there is a very large market space waiting to be tapped." said Lian Zhijun, president of SF Best.

Pain point: fresh food safety

At present, the market's brand recognition and concentration for fresh products are both low, and Lian Zhijun believes this requires companies to deliver a food safety solution across the entire supply chain from field to table.

In order to meet consumer demand in circulation, sales and service, Lian Zhijun introduced that the strategy of SF Best and Heike is to open up online and offline omnichannel sales and carry out direct sourcing brand integration.

For SF, which started out in logistics, opening up online and offline is by no means easy. SF Best launched on May 31, 2012, and Heike opened on May 18, 2013, but it was not until May 5 this year that SF achieved integration, connecting the online SF Best platform with nearly 3,000 offline stores.

Lian Zhijun recognizes that fresh food requires strong integration. "We hope to integrate the resources needed for commercial circulation from various projects within the group, and achieve choices in warehousing, distribution channels, sales and many other aspects." In order to enhance consumers' awareness and brand recognition of fresh food e-commerce, SF Best has laid out product promotion and display, and carried out more interaction focused on fresh food in some cities and communities, proposing many new service items for community fresh food.

SF has made more attempts on how to get closer to user needs from the circulation field, while for upstream companies in fresh food e-commerce, how to ensure the safety of fresh food from the source is the "pain point" they care about more.

Chen Xingyao, vice president of New Hope Liuhe Co., Ltd. and president of Hope Finance, emphasized that the entire industry upgrade must be driven from the perspective of customer management, and the entire industrial chain must be comprehensively built from the perspective of customers and consumers as the end demand.

The solution he gave is: Internet + industrial chain + services.

Chen Xingyao believes that checks must be made at the source of fresh food supply. To this end, they even provide Internet finance assistance plans for small farmers and breeders, using mobile phone apps to train their breeding skills. "We will tell him how much feed a chick needs to eat on the first day and how much water it needs to drink. In addition, IoT technology is used to monitor temperature. Once it exceeds or falls below a certain specific temperature, the chicken may get sick, freeze to death or starve to death. Sensors transmit data every day to help with breeding, epidemic prevention, collection, early warning and decision-making." Chen Xingyao emphasized, "We must make use of the means of Internet + IoT, especially mobile Internet."

Over the past two years, many provinces and cities have adopted the method of adding traceable QR codes on fresh product packaging. As long as the QR code is scanned, the entire production process can be displayed on the screen.

For fresh food e-commerce to defend safety from field to table, Chen Xingyao pointed out that the application of QR codes on fresh products must be promoted even more, and the information covered must even be refined to include processing plants, production dates, breeding farm locations, feed, seedlings, testing standards, testing times and so on.

Cold chain logistics is key

SF Best, JD Fresh, No.1 Fresh, Miaoxiansheng, Suning.com and Amazon Fresh have all crossed into cold chain logistics one after another, which is also one of the key points that distinguishes fresh food e-commerce from other traditional enterprises' "Internet+".

Jiemian News once reported that the fruits and vegetables that rot and are lost in China's logistics each year can meet the basic nutritional needs of nearly 200 million people, and the culprit causing this waste is precisely the backwardness of cold chain logistics.

Lian Zhijun is aware of this problem: "When there is a problem with the quality of any product, it will inevitably bring a great crisis to the overall brand reputation of the enterprise, and we must be increasingly strict." To this end, SF Best has strengthened monitoring of fresh food warehousing and logistics links, including regular inspections of warehouses and temperature control inspections in logistics links, "checking every link we can think of."

Chen Xingyao introduced that, first of all, the "freezing" link must meet standards. For example, quick freezing must exceed two hours, and only below minus 20 degrees Celsius can it be transferred to minus 4 degrees Celsius for storage. In the quick-freezing link, the input cost of maintaining more than minus 20 degrees Celsius for one hour is actually very high, and many enterprises cut corners in these links. What should originally be frozen for 4 hours is cut to 2 hours. Under normal circumstances, after freezing for 4 hours and then distributing outward, even 10 hours of transport is not a big problem, but if freezing is cut to 2 hours, fresh food safety problems will appear.

In the cold chain, cross-contamination of fresh food is also a problem to be solved.

It is reported that in order to reduce cross-contamination between different fresh food packages, many enterprises will separate warehouses, and orders will be split, all of which will increase operating costs. "But this is a necessary step. For example, separating food and non-food warehouses reduces contamination." Lian Zhijun said.

If a consumer orders four or five items and later finds that two or three orders have arrived, this is fresh food e-commerce splitting orders according to different temperature levels, and they may arrive one after another to meet different delivery times. Lian Zhijun admitted: "This kind of order splitting makes the user experience not very good, but it does provide safety assurance."

Multiple models will coexist

It is well known that the cost of building cold chains for fresh food e-commerce is high, but exactly how high is it? Fresh food e-commerce company Tuotuo Gongshe once said that the cost of its self-operated cold chain is about 50 yuan per order delivered. Based on its average daily order volume and distribution cost within Beijing's Sixth Ring Road, SF calculated that the cold chain logistics distribution cost per order is about 47 yuan, and this does not include warehousing, IT and customer service system costs.

Chen Xingyao also said: "We are all large-batch, not small-batch for consumers. Large-batch meat containers should not be loaded with vegetables, nor with cooked food. This link is relatively easier to handle, each time it is ten tons or twenty tons, one cold cabinet and one vehicle. If it is oriented to consumers, one person may buy just a few jin, so fresh food e-commerce will be under pressure, and fresh food e-commerce also has strict requirements for investment."

Under such circumstances, not all fresh food e-commerce companies build their own cold chains and logistics; some must rely on third parties. And some fresh food e-commerce companies are only responsible for the "last mile" of fresh food, for example, connecting to the existing cold chain inventory of supermarkets, with supermarkets as the center, completing final-path delivery within one hour or half an hour within a one-kilometer range.

According to Han Xin, co-founder of Duodian, this young company founded 4 months ago squeezed into the fresh food e-commerce market in this way: "Supermarkets have already done quite well in many links across the entire industrial chain. We will leverage their existing advantages, and at the same time hope to strengthen the areas where supermarkets are not good at."

Exactly which model can win the decisive battle in the fresh food e-commerce market?

Han Xin believes that the fact that so many models are trying to enter the field shows that everyone will expand from the perspective of different resource advantages to other links in the chain. "In the end, this model will not be dominated by one company; several different models will survive, because this market is too big. For us, brother companies like SF are not competitors; instead, everyone joins hands to educate the market and make the market bigger and better together." he emphasized.