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Alibaba and JD Online take fresh approach to China food shopping

Brent Lewin | Bloomberg | Getty Images

For China's 640 million internet users, a live Alaskan crab is now just a mouse-click away.

Alibaba and JD.com, the two biggest ecommerce operators in China, have long been best-known for selling apparel and electronics to the country's army of web-savvy shoppers.

But online sales of fresh produce — from Mexican avocados to Scottish mackerel — sourced from around the globe are growing fast thanks to increasingly sophisticated supply chains, changing consumer habits, and worries over the safety of homegrown food.

In the 25-day period leading up to the recent Chinese lunar new year holiday, online sales of imported fresh food jumped more than 300 per cent through JD's marketplace, where overseas producers and wholesalers can sell direct to Chinese consumers.

Alibaba's Tmall site has seen edible sales rise at a similar clip. Its product range includes Chilean blueberries, New Zealand lamb and live Canadian lobster. The typical customer is female, 28-35 years old, and lives on China's densely populated east coast.

Lilian Wu, a white-collar worker from Shanghai, regularly buys imported fruit, dairy products and cereals online due to worries about local quality. "These kinds of foods in China could be full of additives. I feel assured eating foreign food," she said. Her recent Tmall order of Kiwi fruit from New Zealand was cheaper than at her local supermarket, and arrived at her home within two days.

Chinese demand for foreign food has been growing rapidly. US sales of meat, seafood, dairy, fruit and vegetables more than doubled between 2010 and 2013 to hit $3.4 billion. Though direct online sales are still small, analysts see great potential.

"It's huge. It's really taken off over the last year," said Frank Lavin, chairman of Export Now, which helps western companies build their online sales in China. "These groups are transforming consumer behaviour. They are disintermediating the store."

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He sees foreign food as the perfect kind of "affordable luxury" that appeals to young, middle class shoppers. "When you buy a kilo of cherries from Chile, it's the kind of thing you tell your colleagues about. It's a nice experiment," he added.

Both Alibaba and JD, along with some of their smaller rivals, have been racing to sign up producers and wholesalers from across the globe to capitalize on China's growing demand for foreign food. Goods from brands such as Ocean Spray juices, Quaker cereals and Vina Concha y Tora wines are already available on both sites.

The two New York-listed companies are also working with a long list of foreign governments hoping to increase Chinese demand for their produce.

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"The middle generation wants to have safe food for their parents and for their kids. Imported food translates into quality in their minds," said JD, adding that increasing food sales was the company's top priority for 2015.

Food safety has been a long-running issue in China, with high-profile cases involving poisoned baby formula, expired meat, and cooking oil retrieved from city drains. Foreign companies operating in China have not been immune, with McDonald's, Walmart and Fonterra among those forced to recall products or halt sales of certain items due to quality concerns.

But cost and convenience are also factors pushing consumers online, especially for office workers.

Cathy Zhang, another white-collar worker from Shanghai, who recently ordered live lobster and freshly steamed crab from the US on Alibaba's Taobao site, said: "We know a lot of people who buy seafood online. It's much cheaper than in the supermarket. And you can ask them to deliver whenever you want."