JD.com start to sell U.S. meat online in China
China's largest retailer, today participated in a signing ceremony held at the Great Hall of the People, with the company entering agreements to purchase in excess of $1.2 billion of beef from The Montana Stock Growers Association (MSGA) and pork from Smithfield Foods, Inc. 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.
JD will import Montana-sourced beef from Cross Four Ranch and MSGA members to China for direct sale to the 258 million Chinese consumers on its e-commerce platform. The procurement agreement is for an initial three years, with a minimum commitment of $200 million in beef to be imported by JD from Cross Four Ranch and MSGA members at fair market value during the term. 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% in 2018.
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.