China’s fresh food e-commerce sector will exceed 1 trillion yuan (US$154.6 billion) in sales by 2023, as the country’s fresh food retail market (online and offline) grows from 5 trillion yuan (US$770 billion) in 2020 to 6.8 trillion yuan (US$1.05 trillion) in 2025, according to data released in iResearch’s 2021 China Fresh Food E-commerce Industry Research Report.
This industry growth is driven by growing disposable income and consumer spending in China. The fresh food e-commerce sector is being propelled by key industry players such as Missfresh, who has optimized the fresh food distribution chain with Distributed Mini Warehouses (DMW), digitalization of traditional fresh markets, and retail cloud services.
Missfresh has transformed China’s neighborhood retail industry from the ground up through pioneering the Distributed Mini Warehouse (DMW) grocery delivery model, which integrates warehousing, sorting and distribution to streamline the distribution chain. This has vastly improved delivery speed, operational efficiency, and the customer experience – ensuring speedy delivery to customers’ doorsteps in 39 minutes on average. The company has a network of more than 600 DMWs across 17 cities in China, with plans to increase density in current cities and set up more DMWs in top Tier 2 cities.
Missfresh transforms traditional fresh markets into Intelligent Fresh Markets and empowers the traditional retail industry to optimize operations, improve efficiency and increase online sales through its retail cloud services. This is achieved by leveraging the company’s fresh food e-commerce expertise and core technical capabilities in vertical retail, covering AI-powered supply chain, logistics and marketing.
Although online penetration of fresh food e-commerce is still low (14.6% in 2020), growth in this sector has been rapid. According to iResearch, the Covid-19 pandemic accelerated this upward trend, further boosting customer demand for online grocery shopping.
Missfresh’s three-pronged business strategy – DMWs, Intelligent Fresh Markets and retail cloud services – is just one of multiple models employed in the fresh food e-commerce industry. Other e-commerce models include store-warehouse integration, O2O platforms, and community group buying. iResearch predicts that the industry will not have a dominant business model in the future and that these models will continue to coexist in order to meet diverse consumer needs.