Source: Rita Jane Gabbett, MEATINGPLACE, 11/8/17


Chinese e-commerce firm JD.com announced it has signed a deal to import over $1.2 billion of U.S. beef and pork over three years.

In a big win for Montana beef producers, the agreement includes a minimum commitment of $200 million in beef to be imported by JD from Cross Four Ranch and Montana Stockgkrowers Association members at fair market value over three years. It is estimated that JD’s purchase of Cross Four Ranch and MSGA beef will increase Montana beef export sales by as much as 40 percent in 2018.

JD agreed to buy the pork from WH Group-owned Smithfield Foods. Japanese news service Nikkei, quoting an investor relations official at Smithfield, reported the company signed a letter of intent with JD to sell pork products worth around $1 billion over the next three years.

The agreements are part of an overall commitment by JD to purchase $2 billion of U.S. goods across a wide range of categories over three years. U.S. Secretary of Commerce Wilbur Ross, Jr. and Chinese Vice Premier Wang Yang were in attendance to witness the signing ceremony.

Meat products are a fast-growing category for JD. In the first half of 2017, volume from direct sales of meat on JD increased more than 780 percent year-over-year, with imported meat accounting for more than 30 percent of those sales. Online orders for fresh and frozen meat come chiefly from first and second-tier cities, leaving huge potential for growth in online sales from the rest of the country.

“These groundbreaking agreements bring together two of America’s most trusted and in-demand meat suppliers with China’s leading e-commerce platform, to the benefit of both U.S. producers and Chinese consumers,” said Richard Liu, JD.com Chairman and CEO, who participated in the signing ceremony.

“China’s shoppers will rest assured knowing that they are able to purchase safe, high-quality meat products imported from the U.S., with the fast delivery and ironclad assurance of authenticity that they have come to expect from JD. We look forward to expanding our long-term cooperation with high-quality U.S. meat producers like Smithfield and MSGA.”

“This is a landmark agreement to increase Montana agricultural exports to the fastest growing overseas market for beef,” U.S. Senator Steve Daines of Montana stated. “This is a win for Montana’s hardworking ranchers.”

Beef is the fastest growing meat sector in China and the country is the world’s fastest growing overseas market for beef, following the resumption of American imports earlier this year.

China is the world’s largest producer, consumer and importer of pork. According to official estimates, Chinese pork imports more than doubled in 2016, reaching a substantial 1.6 million tons shipped.

The e-commerce company said its  extensive cold chain logistics capabilities would ensure the U.S. meat products arrive at customers’ doors safely and rapidly. The beef and pork will be cold-chain transported from the United States and stored in JD’s own warehouses in China. From there, JD can deliver it to customers in more than 100 cities across the country within 48 hours — and to many in as little as six hours. With its complete cold chain solution, JD can monitor the temperature and humidity of products from warehouse to delivery. JD’s cold chain logistics network currently includes 12 cold chain warehouses in China, enabling the delivery of fresh products to customers in 300 cities.                                                   

JD.com is both the largest e-commerce company in China and the country’s largest retailer by revenue. As of June 30, 2017, JD.com operated seven fulfillment centers and 335 warehouses covering 2,691 counties and districts across China, staffed by its own employees.

For more stories, go to meatingplace.com.