ZHONGNONG MODERN HAS BEEN AWARDED THE POSITION OF VICE CHAIRMAN UNIT OF THE CHINA PRE-PREPARED FOOD INDUSTRY PARK ALLIANCE.
ZHONGNONG MODERN HAS BEEN AWARDED THE POSITION OF VICE CHAIRMAN UNIT OF THE CHINA PRE-PREPARED FOOD INDUSTRY PARK ALLIANCE.
On November 9, the “Defining Categories · Envisioning Mindshare” Third China Pre-prepared Food Industry Innovation Development Conference and the First Yangtze River Delta New Year’s Eve Dinner Gold Award Selection & China Pre-prepared Food Industry Park Alliance Inaugural Conference grandly opened at the Shanghai International Expo Center. The conference was guided by the Institute of Agro-Products Processing, Chinese Academy of Agricultural Sciences, and the Pre-prepared Food Professional Committee of the National Agricultural Products Processing Industry Science and Technology Innovation Alliance, and organized by the China Pre-prepared Food Industry Park Innovation Development Project and Shanghai Bohua International Exhibition Co., Ltd. The conference focused on high-quality development and digital standard construction in the pre-prepared food industry, sharing the latest market trends, technological innovations, and consumer needs. It explored the practice and methods of the “high-quality development + consumption promotion + digitalization + industry cluster” model in the pre-prepared food industry park, aiming to create a new ecosystem for the development of pre-prepared foods. The event invited hundreds of companies from the pre-prepared food industry and its upstream, midstream, downstream, and related sectors to participate. Zhongnong Modern, as an enterprise within the industrial ecosystem, was invited to attend the conference.
At the conference, the establishment of the China Pre-prepared Food Industry Park Alliance was announced, which aims to promote the P500+ initiative nationwide, creating a network of pre-prepared food industry parks consisting of over 500 nodes. Zhongnong Modern, with over a decade of deep involvement in the agricultural industry, was awarded the position of “Vice Chairman Unit of the China Pre-prepared Food Industry Park Alliance.” The company, along with other participating units, will jointly initiate the development of digital infrastructure for the pre-prepared food industry and collaboratively build and share a digital industry service framework and platform.
Wang Zhenyu, Vice President of Zhongnong Modern Group and head of the pre-prepared food industry development division, gave a presentation titled “The Importance and Impact of Long-Term Development of Pre-prepared Food Industry Parks” and shared the group’s strategic industrial layout. He noted that the No. 1 Central Document clearly defines pre-prepared foods and their development strategy, emphasizing that the pre-prepared food industry chain involves multiple segments, including agricultural production, processing and distribution, catering services, and market consumption. It represents a new business model for agricultural transformation and upgrading, as well as a new channel for increasing farmers’ income and prosperity. The development of the pre-prepared food industry plays a crucial role in enhancing convenience, expanding food choices, and promoting agricultural industrialization. It also signifies innovation in the food industry, transformation in the catering industry, and adjustment in agricultural structure. Looking ahead, the development of the pre-prepared food industry will place greater emphasis on food safety and health, with a focus on personalized, customized, and branded growth based on consumer demand. The industry will also achieve higher levels of digitalization and place greater emphasis on environmental protection for sustainable development.
In the group’s strategic presentation, it was highlighted that Zhongnong Modern, as one of China’s top ten agricultural wholesale market operators and one of the top 100 agricultural product supply chain enterprises, has a comprehensive coverage from upstream supply chain procurement to various downstream sales channels and support systems. Currently, the group has established 20 modern agricultural industrial parks across China, covering over 4 million square meters, and is accelerating the construction of pre-prepared food industry park bases, gradually forming an industry park network.
At present, the construction and development of pre-prepared food industry parks have become important carriers for the implementation of national policies. The development of the group’s pre-prepared food division is driven by the strategic goal of becoming “China’s leading comprehensive operator in the pre-prepared food industry.” The company adheres to technology-led innovation, building digitalized parks, and operates with a brand-focused, standardized approach. It aims to strengthen the pre-prepared food industry through industrial clustering, providing a complete one-stop service from raw material supply, production and processing, standard setting, safety traceability, cold chain warehousing, cold chain logistics, to brand marketing. The mature industrial support in the parks allows pre-prepared food companies to improve quality, reduce costs, and increase efficiency, while big data analysis empowers the production, supply, and sales of pre-prepared foods, creating a new model for integrated industry development. The company also collaborates deeply with the government to incubate public pre-prepared food brands and transform regional advantages into industrial advantages.
In the future, Zhongnong Modern will fully leverage its role as the “Vice Chairman Unit of the China Pre-prepared Food Industry Park Alliance” to accelerate the construction of pre-prepared food industry parks nationwide. The company will integrate industry resources, build industry development platforms, define segmented categories, and incubate blockbuster pre-prepared food products, contributing to the sustainable development of pre-prepared food enterprises, the integration of primary, secondary, and tertiary industries, rural industrial revitalization, and the achievement of common prosperity.
FOSHAN GAINS ANOTHER DOMESTIC HIGH-END PRE-PREPARED FOOD POWERHOUSE.
On November 13, Guangdong Haizhenbao Food Development Co., Ltd. (hereinafter referred to as “Haizhenbao”) officially commenced operations in Chencun, Shunde. The company’s first phase covers an area of approximately 2,000 square meters, with an annual production capacity of 800 tons. Haizhenbao focuses on processing high-end pre-prepared foods, such as abalone in abalone sauce, poon choi, sea cucumbers, and fish maw, offering ready-to-heat meals. The facility aims to be a modern seafood processing plant that integrates cold chain storage, scientific research, product display, e-commerce live streaming, and immersive experiences.
Data shows that the market size of China’s pre-prepared food industry has been steadily growing in recent years. In 2023, the market is expected to reach 516.5 billion RMB. Over the next three years, the market is projected to grow at a high annual rate of around 20%, potentially becoming the next trillion-yuan market.
To better integrate resources, Xinguotong Group and Guangdong Tangxianglou have jointly established Haizhenbao. “We will further improve the supply chain, expand into midstream sectors, and meticulously produce high-quality, healthy seafood products,” said Zhu Ang, Chairman of Guangdong Tangxianglou and Haizhenbao. Haizhenbao aims to become a knowledge-driven enterprise, building a “three-in-one” research system that combines “research and industry,” “doctors and chefs,” and “laboratories and kitchens,” to promote the development of the high-end seafood industry and to carry forward traditional Chinese culinary culture.
“Some high-end pre-prepared foods that require advanced cooking skills, are time-consuming and labor-intensive, but have high nutritional value—such as abalone in abalone sauce, sea cucumbers, and fish maw—are increasingly popular in the market,” said Zheng Jiayuan, General Manager of Xinguotong Group. He added that the two companies will work closely together to develop Haizhenbao into one of the benchmark enterprises in China’s high-end pre-prepared food industry, contributing actively to Shunde’s goal of becoming the “National Capital of Pre-prepared Food” and a model for high-quality development in the national pre-prepared food industry.
Tan Fengxian, Director of the Shunde District Agriculture and Rural Affairs Bureau, noted that Shunde currently has more than 40 large-scale enterprises in the pre-prepared food industry, with revenues reaching 8.7 billion RMB. Shunde is fully implementing the “Hundreds, Thousands, and Tens of Thousands” initiative, positioning the pre-prepared food industry as a key sector for strengthening the district and enriching the people, promoting the integration of primary, secondary, and tertiary industries, and striving to become a national core demonstration area for the pre-prepared food industry.
BAOZHENG UNVEILS ‘DAIRY COLD CHAIN WAREHOUSE AND DISTRIBUTION SOLUTION’ AT 2023 CIIE
As China’s new development provides new opportunities for the world, the sixth China International Import Expo (CIIE) is being held as scheduled at the National Exhibition and Convention Center. On the morning of November 6th, Baozheng (Shanghai) Supply Chain Management Co., Ltd. hosted a new product launch and strategic cooperation signing ceremony for its dairy cold chain solution at the CIIE.
Attendees included leaders from the Cold Chain Committee of the China Federation of Logistics & Purchasing, cold chain experts from the School of Food Science at Shanghai Ocean University, as well as executives from companies such as Arla Foods amba, China Nongken Holdings Shanghai Co., Ltd., Eudorfort Dairy Products (Shanghai) Co., Ltd., Doctor Cheese (Shanghai) Technology Co., Ltd., Xinodis Foods (Shanghai) Co., Ltd., Bailaoxi (Shanghai) Food Trading Co., Ltd., and G7 E-flow Open Platform.
Mr. Cao Can, Chairman of Baozheng Supply Chain, delivered the opening speech, introducing how the company leverages its own advantages to help clients solve their dairy cold chain issues from the customer’s perspective. Mr. Cao explained that Baozheng integrates its digital technology, professional team, and extensive management experience to build its own cold storage and develop this new product—the Dairy Cold Chain Warehouse and Distribution Solution, aiming to ensure zero temperature loss for clients’ dairy products.
During the event, Mr. Liu Fei, Executive Deputy Secretary-General of the Cold Chain Committee, gave a keynote speech titled “Dairy Cold Chain Construction: A Long Road Ahead.” Mr. Liu vividly introduced the dairy industry, cold chain logistics market analysis, and current characteristics of dairy cold chains from the perspective of an industry association, offering several recommendations for the development of dairy cold chains. In a media interview, Mr. Liu urged cold chain experts like Baozheng to actively participate in the development of dairy cold chain standards and promote cold chain concepts, using platforms like the association and the CIIE to advance the cold chain industry.
Professor Zhao Yong, Vice Dean of the School of Food Science at Shanghai Ocean University, delivered a keynote speech on “Key Control Points in Dairy Cold Chains.” Professor Zhao discussed the introduction, production process, nutritional characteristics, and consumption of dairy products, described the spoilage process, shared key control points for dairy cold chain quality and safety, and highlighted four major opportunities for the future of China’s cold chain industry. In a media interview, Professor Zhao emphasized the urgent need for professional talent in the cold chain industry and encouraged closer collaboration between businesses and universities to better understand industry needs and train suitable talent.
Mr. Zhang Fuzong, East China Cold Chain Solution Delivery Director at G7 E-flow, delivered a keynote on “Transparency in Cold Chain Logistics Management,” explaining quality transparency, business transparency, and cost transparency in cold chain logistics, and sharing pathways for transparent management based on actual business scenarios.
Mr. Lei Liangwei, Strategic Sales Director at Baozheng Supply Chain, delivered a keynote on “Dairy Cold Chain Experts—Baozheng Cold Chain: Ensuring Temperature!” He introduced the dairy cold chain warehouse and distribution solution launched at this event, highlighting three service products: Baozheng Warehouse—Temperature Protection; Baozheng Transport—Zero Temperature Loss, Fully Visualized Operation; and Baozheng Distribution—Guarding the Last Mile, Fresh as New.
Finally, Baozheng Supply Chain held an electronic signing ceremony with several strategic partners, including ARLA, Nongken, Xinodis, Bailaoxi, Eudorfort, and Doctor Cheese. This strategic cooperation signing further solidified the friendly cooperative relationships between the parties. The CIIE provided a valuable platform for deeper and closer collaboration among enterprises. Baozheng Supply Chain is now a signed exhibitor for the seventh CIIE and will continue to use this national-level event for communication and display.
THE CHINA FEDERATION OF LOGISTICS AND PURCHASING COLD CHAIN COMMITTEE ATTENDS THE BAOZHENG SUPPLY CHAIN DAIRY COLD CHAIN NEW PRODUCT LAUNCH EVENT.
Baozheng Supply Chain Holds Dairy Cold Chain New Product Launch Event
On the morning of November 6, Baozheng (Shanghai) Supply Chain Management Co., Ltd. held a dairy cold chain new product launch event at the China International Import Expo (CIIE). Liu Fei, Executive Deputy Secretary-General of the China Federation of Logistics and Purchasing Cold Chain Committee, attended the event and delivered a keynote speech.
The event also featured several distinguished guests, including Professor Zhao Yong, Vice Dean of the School of Food Science at Shanghai Ocean University; Frede Juulsen, Global Head of the Infant Formula Category at Arla Foods amba; Xu Li, Supply Chain Director at China Agricultural Reclamation Holdings Shanghai Co., Ltd.; Zhu Yueqiong, General Manager of Oldenburger Dairy Products (Shanghai) Co., Ltd.; He Ziyun, Co-founder of Cheese Doctor (Shanghai) Technology Co., Ltd.; Zhu Yijie, Import Manager at Sinodis Food (Shanghai) Co., Ltd.; Huo Pei, Supply Chain Manager at Bellco (Shanghai) Food Trading Co., Ltd.; and Zhang Fuzong, East China Cold Chain Solution Delivery Director at G7 Yiliu.
The Long Road Ahead for Dairy Cold Chain Standards
Liu Fei, Executive Deputy Secretary-General of the Cold Chain Committee
At the event, Liu Fei delivered a keynote speech titled “The Construction of Dairy Cold Chains: A Long Road Ahead.” Speaking from the perspective of an industry association, Liu provided a vivid overview of the dairy industry, an analysis of the cold chain logistics market, and the current characteristics of the dairy cold chain. He also offered several recommendations for the development of the dairy cold chain.
During the media interview session, Liu Fei urged dairy cold chain experts like Baozheng to actively participate in the formulation of dairy cold chain standards and the promotion of dairy cold chain concepts. He emphasized the importance of using national-level exhibitions like the CIIE to promote and communicate about the cold chain industry, thereby driving its development.
Promoting High-Quality Development in the Dairy Cold Chain
Cao Can, Chairman of Baozheng Supply Chain, delivered the opening speech, introducing how Baozheng helps clients address their pain points in the dairy cold chain by leveraging its own advantages.
Cao emphasized that Baozheng integrates resources using its digital technology, professional teams, and extensive management experience to develop a new product— the dairy cold chain warehousing and distribution solution—aimed at ensuring zero temperature deviations for clients’ dairy cold chain products.
Cao Can, Chairman of Baozheng Supply Chain
Zhang Fuzong, East China Cold Chain Solution Delivery Director at G7 Yiliu, gave a keynote speech titled “Transparent Control of Cold Chain Logistics,” where he discussed the transparency of quality, operations, and costs in cold chain logistics. He shared practical insights into achieving transparency in cold chain logistics management based on real business scenarios.
Zhang Fuzong, East China Cold Chain Solution Delivery Director at G7 Yiliu
Professor Zhao Yong, Vice Dean of the School of Food Science at Shanghai Ocean University, delivered a keynote speech titled “Key Control Points in Dairy Cold Chains.” Professor Zhao covered topics such as an overview of dairy products, production processes, nutritional characteristics, and consumer trends. He discussed the spoilage process of dairy products, shared key control points for ensuring dairy cold chain quality and safety, and outlined four future opportunities for China’s cold chain industry.
During the media interview, Professor Zhao emphasized the urgent need for specialized talent in the cold chain industry. He encouraged enterprises to strengthen collaborations with universities to better understand industry needs and supply talent that meets industry requirements.
Zhao Yong, Vice Dean of the School of Food Science at Shanghai Ocean University
Lei Liangwei, Strategic Sales Director of Baozheng Supply Chain, gave a keynote speech titled “Dairy Cold Chain Experts—Baozheng Cold Chain: Ensuring the Right Temperature!” He provided a detailed introduction to Baozheng’s newly launched dairy cold chain warehousing and distribution solution, highlighting three key service products: Baozheng Warehouse—temperature assurance; Baozheng Transport—zero temperature deviation, fully visualized operations; and Baozheng Delivery—protecting the last mile, as fresh as ever.
Lei Liangwei, Strategic Sales Director of Baozheng Supply Chain
Finally, Baozheng Supply Chain and several strategic partners participated in a digital signing ceremony. The strategic partners included six well-known dairy companies: ARLA, China Agricultural Reclamation, Sinodis, Oldenburger, Bellco, and Cheese Doctor.
This strategic cooperation further strengthens the friendly relations between the parties!
It is platforms like the CIIE that provide opportunities for deeper and closer exchanges and cooperation between enterprises.
THE TREND REPORT ON FROZEN SNACKS HAS BEEN RELEASED: ROYAL TIGER BECOMES THE “KING OF FROZEN SNACKS” WITH ITS HIGH-QUALITY PRODUCTS.
Recently, iiMedia Research released the “2023 China Frozen Snack Food Consumption Trend Insight Report.” In the report, iiMedia Research provides an in-depth analysis of the current state of the domestic frozen snack industry and consumer behavior. According to the data, the market size of China’s frozen snack industry reached 19.13 billion RMB in 2023, with the potential to surpass 20 billion RMB by the end of the year. With new trends in dining consumption, advancements in cold chain technology, and the rise of live-streaming e-commerce, the frozen snack market is expected to continue its growth.
In this context, the development paths and trends of both traditional frozen food enterprises and emerging frozen snack brands are particularly noteworthy. How are traditional brands leveraging their advantages to effectively plan their frozen snack products? And how are emerging brands innovating and developing to carve out new consumer markets with high-quality products? This report provides answers to these questions.
Driving Industry Development Through R&D and Production
As two giants in the traditional frozen food sector, Synear Foods relies on its production advantages, operating five production bases in China with an annual output of over 900,000 tons of frozen food. Anjoy Foods, with 55 patents approved in a single year, drives brand transformation and upgrading through its strong product R&D capabilities. Meanwhile, emerging frozen snack brand Royal Tiger focuses on R&D in the frozen snack category, successfully creating blockbuster products like grilled sausages, egg tarts, paratha, and chicken rolls, with annual sales exceeding 1 billion RMB. In 2022, Royal Tiger secured its position as the “King of Frozen Snacks” with the highest online sales in the frozen snack category, holding a 14.9% market share.
From innovative R&D to steady production, traditional frozen food companies and emerging frozen snack brands are working together to push the boundaries of the frozen snack category and achieve a leap in quality. Under the influence of these brands, the frozen snack industry has seen rapid growth. Data shows that 97% of respondents have purchased frozen food, with 75.9% having bought frozen snacks—far exceeding the purchase rates of traditional staple foods and frozen hot pot ingredients. The rising consumer enthusiasm for frozen snacks has made them the top segment within the frozen food industry.
Efficient Innovation and R&D: Brands Enhance Quality of Life
Through continuous innovation, more and more frozen snacks are gaining attention. From well-known products like paratha and grilled sausages to recently popular items like egg tarts, chicken rolls, and pizzas, the diverse range of frozen snacks offers personalized choices for consumers. Alongside category innovation, the trend toward extreme product innovation has become a key focus for brand development. For example, Royal Tiger has introduced six different series of grilled sausages, including crispy sausages, starch-free sausages, fresh meat sausages, and burst-juice sausages, with each series offering a variety of flavors to meet different consumer preferences. Shedding the label of being “monotonous,” frozen snacks are taking on a “rich and vibrant” image through brand-driven innovation.
On the other hand, the rapid development of cold chain technology and logistics has allowed frozen snacks to overcome time and space limitations, quickly reaching consumers’ tables. Anjoy Foods, the “King of Frozen Foods,” has partnered with oTMS to achieve digital management of transportation, enhancing product competitiveness. Royal Tiger, the “King of Frozen Snacks,” has established 12 warehouses nationwide and built its own end-to-end digital system, enabling efficient order fulfillment through process automation and data visualization. The ability to quickly integrate into countless household consumption scenarios and enhance quality of life is a key reason why frozen snacks are winning widespread consumer favor.
Today, frozen snacks have become a new trend in national food consumption, reflecting a comprehensive leap in Chinese food consumption in terms of technology, culture, and science. In the future, the frozen snack industry is expected to enter an era of “category innovation, quality upgrading, technological empowerment, and flavor-centric development.” Beyond traditional brands like Synear and Anjoy and emerging brands like Royal Tiger, more and more new brands will continue exploring the numerous possibilities in the frozen snack sector.
HEALTH AND WELLNESS BECOME GLOBAL HOT TOPICS: A LARGE NUMBER OF HEALTH FOODS MAKE THEIR DEBUT AT THE CHINA INTERNATIONAL IMPORT EXPORT
“Health and Wellness Become Global Hot Topics: Numerous Health Foods Make Their Debut at the China International Import Expo”
As awareness and demand for health continue to rise, the health and wellness industry has become a global hotspot and a new economic growth point. Innovations and breakthroughs in products are continuously emerging. From November 5 to 10, the sixth China International Import Expo (CIIE) was held in Shanghai. The event saw an increasing number of exhibitors using the expo as a prime platform to showcase their latest achievements, with many health foods making their debut.
Nongxuanli Yijia’s Global Debut at CIIE: Meeting Chinese Consumer Demand
At Danone’s booth, Nongxuanli Yijia, a full-nutrition formula product, made its global debut, attracting a large number of spectators and inquiries. Each bottle contains 9.4 grams of high-quality milk protein, 28 vitamins and minerals, and 2.6 grams of dietary fiber. Not only does it offer balanced nutrition, but its stylish packaging, smooth taste, and diverse flavors also make dietary choices during recovery more varied.
Nongxuanli Yijia, developed by Danone Nutricia specifically for Chinese consumers, is currently the only multi-flavor liquid formula among the class I full-nutrition special medical products available domestically. The product features a comprehensive nutritional formula to meet recovery needs while offering innovative flavors and an ready-to-drink format to address the “compliance challenge” in recovery nutrition. It integrates traditional Chinese wellness concepts, with a new red date and goji berry flavor. Additionally, Nongxuanli Yijia is presented in a ready-to-drink form, eliminating the need for preparation and ensuring precise dosing, making it convenient to carry and consume. More flavors are expected to be introduced to meet consumer preferences for diverse tastes.
Multiple Products Debut, Demonstrating “Dual-Drive” Strength
As a “veteran” exhibitor at the expo, Ausnutria Dairy has returned for the sixth year with its brands Kabrita, Hyproca1897, Enlit, Oz Farm, and Nutrition Care. Four brands launched new products, and two brands made their debut at the event. At the press conference, Wei Yanqing, Vice President of Ausnutria Dairy China, stated that the company uses the CIIE platform to enhance its “two-way connection” with the international market and convey its mission of “global nutrition, nurturing growth” more vividly. Ausnutria plans to continue focusing on the milk powder sector to ensure steady growth in its core business while also expanding its nutrition product range to explore new market opportunities.
At the event, Hyproca1897 introduced “Hyproca1897·Youlan (New National Standard),” featuring rare organic milk sources from Dutch farms and covering 13 key nutrients. Enlit showcased its “Enlit Gold Diamond Edition,” focusing on digestive absorption, and Nutrition Care presented “NC Gut Health Plus Capsules” and “NC Daily Cold Chain Probiotics.” The “NC Gut Health Plus Capsules” include the patented Pylopass probiotic and other nutrients to alleviate stomach discomfort. The “NC Daily Cold Chain Probiotics” feature eight high-quality probiotics and maintain high activity through cold chain transportation. Additionally, Kabrita’s popular “Yuebai (New National Standard)” and Enlit’s “Enlit Classic Edition (New National Standard)” made their debut at the expo. Ausnutria also showcased nearly 50 products collectively.
In addition to the exhibits and new products, the Ausnutria booth featured a stage area, a gourmet food section, and a “Helicobacter pylori” test area, attracting numerous visitors. The interactive experiences included Kabrita goat milk ice cream, nutritional product fashion shows, and health knowledge quizzes, providing an all-sensory nutrition and health experience.
Nestlé: Upgraded Nan Pro 3 Unveiled with Enhanced Allergy Protection
At Nestlé’s booth, 341 premium products from 16 countries were showcased. This year marks Nestlé’s sixth participation in the CIIE.
The exhibition emphasized Nestlé’s achievements in large categories, high-end products, and nutritional health. New products included the Crunch® wafers and the Australian-imported Nestlé Milo, as well as well-known Nestlé products like Perrier, San Pellegrino, and Purina, and the Italian chocolate brand Bacchi Baci. Other highlights included the “Instant 5 Minutes” and “Global Cuisine” series from Tatale, and the new limited-edition festive capsules from Nespresso.
Nestlé’s health science division introduced groundbreaking innovations, including Modulen® IBD for Crohn’s disease, Wyeth’s new national standard formula, and the first cat food to significantly reduce allergens in three weeks, Pro Plan LiveClear.
Notably, Nestlé’s infant nutrition division unveiled the upgraded Nan Pro 3, featuring a combination of six types of human milk oligosaccharides (HMOs) and infant bifidobacteria (B. infantis) for enhanced proactive allergy protection.
Nestlé Group Executive Vice President and Chairman and CEO of Nestlé Greater China, Zhang Xiqiang, said, “2023 marks the 37th year of Nestlé’s entry into the Chinese market. Nestlé’s commitment to China is long-term, and we are confident in further rooting ourselves in the Chinese market alongside China’s economic growth, contributing to high-quality economic development. The CIIE has witnessed important moments of signing and cooperation with many industry partners and has allowed us to present many ‘new products and new experiences’ to Chinese consumers.”
Good Nature: Over 20 Years of Functional Food Development Experience and One-Stop Brand Incubation Services
At the booth of Naturies Ora Health Manufacture Ltd of New Zealand (referred to as “Good Nature”), the high-end, technologically advanced booth design and various advanced production forms of Naturies series products drew industry attention.
According to staff, Good Nature has its own source factory in New Zealand and over 20 years of experience in developing nutritional and functional foods, including advanced health supplements, dairy products, functional foods, and pet foods. They offer a range of product forms such as powders, tablets, soft gels, hard capsules, beverages, and jellies, meeting diverse needs. Additionally, their robust supply chain network and logistics management ensure timely delivery and manageable inventory.
For exhibitors’ concerns about local services, the company provides scientific assistance to help clients with product and brand localization services in New Zealand, including local sales, video shooting, and live streaming services.
Since entering China in 2004, Good Nature has provided a one-stop brand incubation service from “New Zealand trademark registration, product concept planning, product packaging design, Chinese regulatory review, New Zealand production, New Zealand export, logistics transportation, China customs clearance, and brand localization guidance.”
GAODE “AMBUSHES” MEITUAN AND JD.COM, EMERGING AS A DARK HORSE IN THE ERRAND SERVICE INDUSTRY.
The rapid decline of mobile internet dividends has made major companies more rational in their pursuit of new trends. When previously booming sectors become overcrowded, these companies often pivot back to older, once-popular trends, as innovation carries increasing risks, and large companies are growing more averse to these risks.
For example, Alipay has once again launched the UGC (User-Generated Content) creation feature in its Life Account section, marking yet another push into the content space. Meituan has introduced “Tuan Mai Mai,” reigniting the community group buying wars, while SF Express is eyeing the live e-commerce sector and is busy expanding its supply chain.
Recently, Gaode has also set its sights on a business that is neither trendy nor new: errand services. The Gaode Map app has quietly rolled out the “Gaode Miao Song” service in cities such as Beijing, Wuhan, and Hangzhou, following a third-party aggregation model similar to ride-hailing. Currently, it only integrates with Ele.me’s Fengniao Errand service.
According to a report by iiMedia Research, the domestic errand service market is expected to reach 66.5 billion RMB by 2025, maintaining double-digit annual compound growth rates in recent years. The future indeed looks bright. However, as a core player in Alibaba’s local services, Gaode’s ambitions likely extend far beyond this 66.5 billion RMB market.
Gaode as the Vanguard, Alibaba Local Services in Pursuit
Without large-scale promotion or a full launch, “Gaode Miao Song” seems more like a “sneak attack.” Currently, the service offers only two features: “Help Me Pick Up” and “Help Me Deliver,” and it has not been given a primary entry point on the home page. Users can access the ordering page through keyword searches. The discounts are modest, with a first-order discount of 5 RMB, indicating a restrained investment by the platform.
When asked about the details of this service, a Gaode spokesperson confirmed that “Gaode Miao Song” would follow a third-party aggregation model to build an open ecosystem, aligning with publicly available information. Gaode’s reason for entering the errand service industry was to “respond to user demand.”
This reasoning is not without merit. As an extension of instant delivery, the errand service industry may not be large, but it aligns with market trends and is seeing growing user loyalty.
In the early years, errand services were predominantly used in office settings for urgent intra-city deliveries of documents and small items. But now, the scope of errand services has expanded to various fields, especially those catering to end consumers. Statistics from iiMedia Research show that 38.4% of users use errand platforms to pick up or deliver forgotten items, while 37.3% use them to purchase items directly.
The growing dependency of Gen Z—the loyal supporters of the “lazy economy”—on errand platforms is particularly noteworthy. Surveys indicate that 37% of young users aged 19-25 use errand services at least 1-4 times per month, with the majority located in first- and second-tier cities. The services they seek are not limited to delivery and pickup but also include emerging tasks like queueing on behalf of others.
Beyond responding to user demands, Gaode also has its own need to expand its service range.
Following Alibaba’s “1+6+N” organizational restructuring, which allows for the spin-off and listing of its business groups, Taotian Group, Cainiao, Alibaba Pictures, Alibaba Cloud, International Digital Commerce, and the Local Services Group have all embarked on a race to go public. The rationale is simple: after leaving behind the era of collective resources, these groups need to fend for themselves, striving for high valuations and more funding through public listings. Consequently, relationships between the various business groups have become more complex.
Currently, Alibaba Cloud and Cainiao have taken the lead, having secured board approval to proceed with their IPOs, while the still-loss-making Alibaba International Digital Commerce Group is also rumored to be planning a listing. Taotian Group’s situation is unique, as its self-sufficiency, influence, and internal standing are unquestionable, making its IPO less crucial. This leaves Alibaba Pictures and Local Services lagging behind, both in urgent need of catching up.
Compared to other business groups, Alibaba Local Services has seen relatively few internal adjustments in recent years and continues to pursue a strategy of simultaneous focus on in-home, in-store, and destination services, with Ele.me, Gaode, and Fliggy as its core pillars. Among these, Gaode has been the standout, receiving the most resources from the group.
Of Alibaba Local Services’ three flagship apps, Gaode is indeed closest to the users and has the most room for expansion. Gaode has long ceased to be just a map app, and it is no longer limited to the travel sector, gradually expanding into various local service segments.
The launch of “Gaode Miao Song” is merely a signal; Gaode and Alibaba Local Services’ expansion has not yet reached its peak.
A Decade with Alibaba: The Evolution of Gaode into a “Super App”
Reflecting on Gaode’s early days within Alibaba, there was little connection to local services, and even its main business of navigation was not performing well.
Gaode’s last financial report before being privatized by Alibaba (Q3 2013) showed a net loss of $6.7 million, with marketing and R&D expenses surging by 150% and 75% year-on-year, respectively. The situation was far from optimistic. At the time, Baidu had already acquired Nuomi and merged it with Baidu Maps, and Tencent and Meituan were making moves in the travel industry, leaving Gaode surrounded by competition.
After the acquisition, Alibaba appointed a key figure to lead Gaode: Yu Yongfu. As an executive most familiar with local services and O2O within Alibaba, Yu made a surprising decision after assuming the role of Gaode’s president: he cut all O2O services and refocused on Gaode’s core business of navigation, avoiding direct competition with Baidu.
Yu later recalled that this decision was difficult but necessary: “If we didn’t act quickly, Gaode would be in danger.” He believed that O2O at that time had not yet moved beyond the inertia of e-commerce thinking and lacked true understanding of user needs. By stabilizing its core business and retaining users, Gaode could then extract valuable insights from user travel data, making other services meaningful.
In hindsight, Yu’s decision was undoubtedly the right one. Baidu Nuomi flopped after investing 20 billion RMB, eventually shutting down in December 2022, while Gaode’s improved LBS+O2O model became increasingly successful.
Opening the Gaode Map app now reveals a wide array of services.
It is no exaggeration to say that Gaode has the potential to become a “super app,” akin to WeChat, Alipay, and Meituan.
Navigation, ride-hailing, and public transportation/flight information queries are the basics. Features like electric vehicle screen projection, driving cruise control, and corporate business car services are also understandable as they fall under travel services. But Gaode’s offerings extend far beyond that.
As an extension of travel services, Gaode provides smart insurance products like “Smart Car Insurance” and “Travel Protection,” as well as automotive after-sales services such as discounted fueling and car washes. Additionally, there are various lifestyle services seemingly unrelated to travel: mobile phone top-ups, medicine delivery, restaurant reservations, and even online housing rentals and medical appointments.
Since being designated as a core project by Alibaba Local Services in 2022, Gaode has accelerated its penetration into the local services sector. In August this year, Gaode partnered with over 4,000 Apple authorized resellers nationwide to launch the “Buy on the Go, Pick Up Nearby” service, continuing to explore “third living service scenarios.” Earlier, Gaode also collaborated with Starbucks to launch the “Street Pickup” service, covering over 1,000 stores across the country.
In Gaode’s vision, the map is merely a carrier and a gateway to traffic—a gateway filled with potential. After all, travel is just one aspect of life services, inherently connected to other aspects.
Simply put, travel is a means, while consumption is the end goal. When users open Gaode to navigate to a destination, they might be going out to dine, socialize, or vacation at a hotel or scenic spot. Since Gaode already has the navigation function and controls the traffic source, why not capture the downstream traffic as well?
It must be said that Gaode’s approach bears striking similarities to Robin Li’s envisioned LBS+O2O model. LBS (Location-Based Services) involves using the map’s navigation function to capture traffic and then directing it to various O2O services. Baidu Nuomi’s failure was due, in part, to its failure to truly understand user needs, instead “creating demand” through heavy subsidies. Additionally, its timing was unfortunate, coinciding with Meituan’s rise.
In contrast, Gaode’s current situation is much more optimistic. However, with Baidu Nuomi’s precedent, caution is still necessary. This new errand service could be a litmus test to see how far Gaode’s boundaries can be extended.
Can Alibaba Local Services Harness Synergy Amidst Complex Business Lines?
When analyzing a business’s prospects, two key questions arise: externally, can it withstand competition and capture industry growth? Internally, can it concentrate core resources and fully leverage its strengths?
The external factor seems manageable. While the errand service industry has both new and established players, the competition is not yet cutthroat, and there are few platforms adopting an aggregation model, leaving Gaode with room to capture market share.
The main players in the errand service market fall into two categories: comprehensive platforms like Meituan Errands, Ele.me Errands, and Dada Group, which cover a range of services such as intra-city delivery, purchasing on behalf of users, and errand running; and single-service platforms like SF Intra-city, which focuses on intra-city delivery of B2B business items.
SF Intra-city dominates the B2B segment, while the C2C market is highly fragmented. Dada Group, backed by JD.com, connects with large supermarkets and shopping centers and has a loyal user base, while Meituan and Ele.me excel in traffic and last-mile delivery, offering the broadest range of services. Gaode’s collaboration with Ele.me and its affiliated errand platform reduces costs and shares risks, benefiting both parties.
The internal challenge may be more complex.
The longstanding issue for Alibaba Local Services, and even the broader Alibaba Group, has been the difficulty of forming synergy due to the multitude of business lines, blurred boundaries between competition and collaboration among different teams, and the vast scope of local services, which involves a wide range of projects. Frequent organizational changes and communication barriers between teams have also contributed to this problem.
Take the fresh food e-commerce sector, for example. Beyond short-lived products like “Cai Huashuan,” Alibaba has deployed multiple teams, including Taoxianda, Hema, and Taocaicai, in this space. These teams belong to different business groups, have separate reporting lines, and different executives in charge, yet they target overlapping customer bases and end up competing internally, leading to unnecessary resource diversion.
The good news is that outside of the Local Services Group, other Alibaba business units have not heavily ventured into the errand service space, so the issues seen in fresh food e-commerce are unlikely to repeat. More importantly, Gaode has always adhered to an aggregation model, building an open ecosystem that attracts traffic and facilitates transactions through its platform advantage, avoiding conflicts of interest with the platforms it hosts—regardless of whether those platforms have an Alibaba background.
The only remaining issue for the higher-ups might be the internal allocation of resources and improving operational efficiency.
There are rumors that Yu Yongfu, in his early days of managing Gaode, was very dissatisfied with the company’s internal efficiency. At that time, Gaode was simultaneously focusing on multiple projects, such as in-car connectivity and mobile applications, requiring significant resources. However, the back-end departments, such as technology and finance, struggled to keep pace, and Yu found the lengthy reporting lines and aimless discussions in meetings unbearable.
Yu’s solution was to eliminate traditional weekly meetings, replace them with a project team system, and later establish a “class committee” structure with senior executives like Chen Yonghai, Wei Dong, Dong Zhennin, and Tian Mi overseeing different projects, a system that has persisted for many years. Although Yu Yongfu now has a heavier workload and is no longer on the front line of Gaode’s management, the rules he set and the emphasis on efficient operations that he instilled in the team continue to influence every Gaode employee.
Looking back, it’s been ten years since Gaode joined the Alibaba family. Although Alibaba has not disclosed detailed revenue figures for Gaode, its user base growth is evident, and its valuation has undoubtedly risen. Gaode, which was not yet profitable when it joined Alibaba, has certainly proven its worth, dispelling doubts about its premium acquisition.
Now, it may be time for Gaode to repay Alibaba’s trust and take on a leading role in the local services sector.
Q3 REPORTS FROM 21 PRE-PREPARED MEAL COMPANIES: SOME RAKED IN 3.1 BILLION, WHILE OTHERS QUIETLY REDUCED INVENTORY.
The Q3 reports of pre-prepared meal companies have been released, revealing a mixed bag of outcomes.
In the pre-prepared meal sector, it’s not just specialized manufacturers that are involved; many cross-industry entrants, such as downstream restaurant businesses and upstream agricultural, forestry, animal husbandry, and fishery enterprises, have also joined the fray.
Recently, the Q3 reports of companies related to pre-prepared meals have been released. The Catering Supply Chain Guide has categorized them based on their primary business into three major types—Frozen Food, Agricultural & Livestock, and Specialized—to analyze the latest performance of 21 related companies and assess the current state of the pre-prepared meal market.
Looking at the third quarter alone, most of these 21 publicly listed companies in the pre-prepared meal sector turned a profit, with only four companies reporting losses. However, 13 companies experienced a decline in net profit growth. The performance varied across different types of companies.
1. Frozen Food Companies Overall Are Performing Well, with Several Reporting Increases in Both Revenue and Profit
The “Frozen Food” companies related to pre-prepared meals generally reported increases in both revenue and profit in Q3. For instance, Anjoy Foods (603345.SH), Qianwei Yangchu (001215.SZ), Huifa Foods (603536.SH), and Sanquan Foods (002216.SZ) all showed strong performance. In contrast, Haixin Foods (002702.SZ) lagged behind, reporting declines in both revenue and profit.
Anjoy Foods continued its growth trajectory in Q3, achieving a revenue of 3.377 billion RMB, up 17.21% year-on-year, and a net profit of 386 million RMB, up 63.75% year-on-year.
Looking at the first three quarters overall, Anjoy’s pre-prepared meal business remains strong, not only becoming the company’s largest business segment but also growing nearly 50% in revenue. According to Anjoy’s regularly disclosed operating data, its frozen food business revenue in the first three quarters of this year reached 3.109 billion RMB, up 47.46% year-on-year.
Huifa Foods, which had previously suffered losses exceeding 100 million RMB over the past two years, appears to be improving. In Q3, Huifa Foods reported a net profit of 601,100 RMB, up 102.83% year-on-year.
Since going public, Huifa Foods has experienced unstable profitability, with consecutive losses exceeding 100 million RMB in 2021 and 2022. However, in the first half of this year, Huifa Foods reduced its losses by 44.29% year-on-year. Despite this, the company still reported a loss of 29.95 million RMB for the first three quarters, a 60.62% reduction compared to the same period last year.
However, the contribution of pre-prepared meals to Huifa’s reduced losses appears to be limited. In the first three quarters of this year, Huifa’s revenue from Chinese dishes increased from 145 million RMB last year to 162 million RMB, accounting for only 10% of total revenue. The revenue growth in its meatball and fried products, both of which grew by over 20%, played a significant role in reducing losses, as these two business segments account for nearly 50% of total revenue.
Compared to Huifa Foods, which is still in the red, “Catering Supply Chain First Stock” Qianwei Yangchu is in a much better position.
In Q3, Qianwei Yangchu reported a revenue of 477 million RMB, up 25.04% year-on-year, marking its highest single-quarter sales, while its net profit increased by 60%. Although Qianwei Yangchu did not disclose specific revenue figures for its various business segments, it emphasized its strategy of parallel operations for both B2B and B2C segments.
In response to investor inquiries, Qianwei Yangchu stated that its C-end (consumer) division and Yuzhi Cuisine performed well in Q3. Yuzhi Cuisine focuses on customized semi-finished products for large B2B clients, while the C-end division has established good supply chains within the convenience store system, with clear business directions.
Sanquan Foods also saw its net profit increase by more than 20% year-on-year in Q3, although revenue grew only slightly by 3.03%.
For the first three quarters of this year, pre-prepared meals contributed to some performance growth for Sanquan. In response to investor inquiries, Sanquan acknowledged that frozen ready-to-cook food products, such as meat-based pre-prepared ingredients, have seen significant growth, with items like meat rolls, egg dumplings, and small crispy pork, as well as microwave and air fryer products like grilled sausages and microwave pasta, performing well.
Compared to the above four frozen food companies, Haixin Foods (“First Stock of Frozen Fish and Meat Products”) underperformed.
In Q3, Haixin reported a revenue of 400 million RMB, down 1.06% year-on-year, and a net profit of 2.4814 million RMB, down 92.43% year-on-year. For the first three quarters as a whole, Haixin’s performance was also less than satisfactory, with revenue of 1.134 billion RMB and a corresponding net profit of only 3.6721 million RMB, down over 90% year-on-year.
Haixin explained the profit changes in its Q3 report, citing three reasons: increased production costs, promotional discounts in the supermarket system, and the initial investment in seafood products not yet yielding results, leading to a decline in gross profit margin; as well as increased spending on promotional activities.
The Catering Supply Chain Guide also noted that while Haixin increased its promotional spending, it reduced its R&D investment. In the first three quarters, Haixin’s R&D spending decreased from 12.2053 million RMB in the same period last year to 10.9618 million RMB.
This trend of reducing R&D spending is not unique to Haixin. This year, frozen food companies generally focused on cost reduction and efficiency improvement, with several companies cutting down on R&D and management expenses to optimize cost efficiency. Qianwei Yangchu, however, is an exception.
Specifically, Sanquan reduced various expenses, including management, R&D, and sales, with its sales and management expense ratios showing a downward trend.
Haixin, Anjoy, and Huifa all increased their spending on market sales while reducing management and R&D expenses. According to an investor survey report released by Anjoy, when asked about its spending plans for Q4 and Q1 next year, Anjoy stated that it would, if necessary, accelerate revenue growth by increasing promotional efforts and sales expenses.
However, Qianwei Yangchu continued to increase its spending across multiple areas, with sales expenses and R&D expenses up 65.22% and 33.69%, respectively, and management expenses up 13.54% in the first three quarters.
2. “First Stock of Pre-prepared Meals” Sees Decline in Net Profit as Beef Sales Slow Down
While frozen food companies that have entered the pre-prepared meal sector performed well, specialized pre-prepared meal player Weizhixiang (605089.SH) has seen its rapid growth in recent years come to a halt.
According to financial reports, Weizhixiang’s Q3 revenue was 202 million RMB, down 11.89% year-on-year, and net profit was 32.5289 million RMB, down 18.76% year-on-year.
Overall, Weizhixiang’s net profit for the first three quarters of this year was 107 million RMB, down 2.90% year-on-year. In contrast, Weizhixiang’s net profit growth rates in the same periods of 2021 and 2022 were 9.02% and 7.65%, respectively.
Weizhixiang’s operating data revealed that declining sales of beef products have impacted profit margins.
In Q3, Weizhixiang’s beef product series generated revenue of only 81 million RMB, down 23.15% from 105 million RMB in Q3 2022.
Although the Q3 report did not disclose the specific gross profit margin for beef products, previous data shows that beef products have long accounted for more than 40% of total revenue, with a gross profit margin of no less than 20%. This indicates that beef products are a crucial profit source for Weizhixiang.
Weizhixiang explained that in the context of consumer downgrading, high-value products are selling less well than low-value products. As the company’s wholesale channel mainly consists of high-value beef products, overall production volume remained relatively stable, but this led to a decline in Q3 revenue.
Guotai Junan Securities also noted in its research report that Weizhixiang’s segmented product performance diverged in Q3, mainly due to weakened consumer spending power. High-ticket items like beef and shrimp saw revenue declines, while low-ticket items like poultry and pork saw revenue increases.
Weizhixiang also pointed out that the challenging environment has affected franchisees’ willingness to open new stores, leading some to adopt a wait-and-see approach, slowing down the pace of new store openings.
According to financial report data, Weizhixiang did indeed slow down store openings in Q3, with revenue from franchise store operations down 6.43% year-on-year. In Q3, Weizhixiang opened 91 new franchise stores, only half the number opened in the same period last year (182 stores in Q3 2022).
Additionally, Weizhixiang noted that it made significant resource investments this year, and the launch of new factories in Q3 also added to costs. These factors combined to contribute to the decline in Q3 net profit.
As a specialized pre-prepared meal company heavily reliant on beef products, Weizhixiang’s ability to restore and grow profitability may depend on an overall improvement in the consumption environment.
3. Pig and Poultry Farming Affected by Cyclical Fluctuations—Can Diversification into Pre-prepared Meals Improve Profitability?
An increasing number of companies are entering the pre-prepared meal sector, hoping to gain a share of the market, including agricultural, forestry, animal husbandry, and fishery enterprises, as well as meat processing companies.
However, due to the decline in prices of raw materials such as pork, beef, and chicken in Q3, many farming enterprises, while remaining profitable, saw a decline in net profit growth.
According to data released by the National Bureau of Statistics, in September this year, pork and beef prices increased by 0.2% and 0.6% month-on-month, respectively, but showed a downward trend compared to September last year, with pork prices down 22.0% and beef prices down 4.9% year-on-year. Notably, pork prices have been declining year-on-year for five consecutive months from May to September this year.
Chicken prices were also sluggish in Q3. According to the “Food and Catering Chain Enterprise Procurement Market Monthly Reference (August 2023)” produced by Wangju Capital and the Hongcan Industry Research Institute, the average price of white-feathered broiler chickens in China in July was 4.15 RMB per jin, down 4.60% month-on-month and 12.26% year-on-year.
Leading poultry farming company Wens Foodstuff (300498.SZ) also noted that Q3 is traditionally the peak consumption season for broiler chicken products, but this year’s Q3 performance was average, with chicken prices falling short of expectations.
The fluctuations in raw material prices inevitably impact the production and operations of upstream agricultural and animal husbandry enterprises.
Longda Foodstuff, New Hope Group, Fucheng Group, Tangrenshen Group, Xiangjia Group, Wens Foodstuff, Xiantan Group, Chunxue Food, Dahua Group, Haodangjia, and Yike Food are among the companies whose main businesses involve farming, slaughtering, or meat processing. They have all now diversified into pre-prepared meals. Financial reports show that in Q3, all 11 of these companies experienced negative net profit growth.
Among them, “pig farming giant” New Hope Group (000876.SZ) reported a net loss of 875 million RMB in Q3, largely due to the sharp decline in pork prices. The company noted that in Q3 2022, pork prices were around 22 RMB, while in Q3 2023, they were only around 15 RMB.
Additionally, companies like Shengnong Development (002299.SZ), Shuanghui Development (000895.SZ), and Huaying Agriculture (002321.SZ) managed to achieve positive net profit growth. However, some of these companies also noted that their performance was affected by fluctuations in raw material prices.
Leading broiler chicken farming company Shengnong Development reported increases in both revenue and net profit, but it noted that its asset impairment loss increased by 85.67% year-on-year during the reporting period, primarily due to losses from the decline in beef raw material prices and provisions for the decline in value of some chicken products.
Shuanghui Development’s net profit increased by 11.62% in Q3, while revenue declined by 5.20% year-on-year. The company noted that although its total meat sales volume reached 840,000 tons in Q3, up 4.6% year-on-year, revenue did not grow due to the significant year-on-year decline in pork prices.
Despite the impact of raw material price fluctuations, many companies involved in farming businesses still managed to turn a profit in Q3. Among the 15 publicly listed companies included in the Catering Supply Chain Guide‘s incomplete statistics, 11 reported profits. However, of these 11 profitable companies, 8 experienced a decline in net profit growth.
Agricultural and livestock enterprises’ performance is easily affected by cyclical fluctuations in farming, leading more and more of them to actively expand into pre-prepared meal processing to seek new growth opportunities.
However, the Q3 reports show that the performance of companies that disclosed their pre-prepared meal revenue varies significantly.
For instance, “First Stock of Cattle Farming” Fucheng Group significantly reduced its pre-prepared meal production this year but still faced inventory pressure in Q3. Fucheng Group primarily conducts its pre-prepared meal business through its fast food subsidiary, and the fast food business mentioned in its annual reports refers to pre-prepared meals.
Fucheng Group’s disclosed inventory figures for Q1, H1, and Q3 this year were 93.14 tons, 262.28 tons, and 357.27 tons, respectively. In the same periods in 2022, the corresponding figures were 293.99 tons, 409.60 tons, and 329.54 tons. The data shows that while Fucheng Group significantly reduced inventory in the first half of this year compared to last year, Q3 inventory levels exceeded those of the same period last year.
Operating data disclosed by Fucheng Group shows that its fast food production in the first three quarters decreased by 40% year-on-year, with fast food revenue down 52.87% year-on-year. According to the H1 report, Fucheng Group’s fast food production in H1 2022 and H1 2023 was 3,437.97 tons and 1,868.90 tons, respectively, a decrease of 45.64%.
Chunxue Food (605567.SH), which started with poultry farming, also saw a decline in the revenue share of its pre-prepared meal business.
In Q3 2023, the revenue share of Chunxue Food’s prepared food (pre-prepared meals) business decreased from 47.98% in the same period last year to 42.96%, a slight decline. However, the revenue share of fresh products jumped from 22.72% in the same period last year to 40.24%, with revenue increasing from 160 million RMB to 290 million RMB.
In 2019-2021, Chunxue’s prepared food (pre-prepared meals) business consistently accounted for more than 50% of total revenue. In 2022, prepared food revenue accounted for nearly half of total revenue, indicating that prepared food has been a significant source of revenue for Chunxue.
Whether this pattern will change remains to be seen in the Q4 performance. However, Chunxue’s actions this year suggest an increased focus on its fresh products business.
The H1 report shows that Chunxue produced 66,000 tons of fresh chicken products in H1, up 35% year-on-year. Additionally, Chunxue expressed optimism about the growth of fresh products, noting in its H1 report that as the structure of the main consumer population changes and people’s lifestyles improve, the market growth rate of fresh meat will gradually accelerate.
Although New Hope Group reported a loss in Q3 this year, its popular small crispy pork product continued to perform well.
In September alone, the sales of small crispy pork exceeded 140 million RMB. New Hope stated that the sales of small crispy pork are expected to exceed 1.4 billion RMB this year. Additionally, its large intestine product has maintained stable monthly sales of 35-40 million RMB.
Shuanghui Development’s pre-prepared meal business also performed well, with sales exceeding 50,000 tons in the first three quarters of this year, an increase of over 80% year-on-year. The company plans to continue expanding its pre-prepared meal business.
Shuanghui Development revealed that it has established a professional R&D team and a team of chefs. Moving forward, the company plans to strengthen product development and market expansion in categories such as ready-to-eat dishes, semi-finished dishes, pre-cut ingredients, and convenient ready-to-eat meals.
Conclusion
Since the beginning of this year, the pre-prepared meal market has cooled down and is no longer as hot as it was in previous years. With the changing market environment, some companies have begun to adjust their business layouts. However, there are still companies that choose to continue investing heavily in pre-prepared meals, especially those that have already reaped the benefits.
The Q3 reports show that while many pre-prepared meal-related companies turned a profit, net profit growth has slowed. As more players enter the market and competition intensifies, the era of wild growth and rough expansion in pre-prepared meals will eventually come to an end, and the industry’s barriers will gradually become apparent.
EXPRESS DELIVERY LEADER ENTERS THE MARKET, AND PILOT PROGRAMS FOR PRESCRIPTION MEDICINE PAYMENTS THROUGH FOOD DELIVERY PLATFORMS ACCELERATE CHANGES IN THE PHARMACEUTICAL O2O MARKET
As the market expands, more players are entering the field, and favorable policies are continuously emerging, accelerating the transformation of the pharmaceutical O2O market.
Recently, leading express delivery company SF Express officially entered the pharmaceutical O2O market. SF Express’s local delivery service has launched an integrated logistics solution for “Internet + Healthcare,” covering two core medical consumption scenarios: pharmaceutical new retail and online hospitals. The aim is to enhance quality and efficiency through a multi-platform, full-link coverage model.
Instant delivery, as a crucial model for the pharmaceutical O2O sector, is a key focus for pharmacies in new retail. According to the latest data from Zhongkang CMH, the pharmaceutical O2O market grew by 32% from January to August 2023, with sales reaching 8 billion yuan. Platforms such as Meituan, Ele.me, and JD dominate the market, while major listed chain pharmacies like Lao Baixing Pharmacy, Yifeng Pharmacy, and Yixin Tang continue to strengthen and optimize their online channels.
At the same time, policies are further accelerating the industry’s development. As reported on November 6, Shanghai has begun pilot programs for prescription medicine payments through food delivery platforms. Relevant departments in Shanghai have been in contact with Ele.me and Meituan, with dozens of pharmacies included in the pilot.
It is reported that in Shanghai, when ordering drugs with the “medical insurance payment” label through Meituan or Ele.me apps, the page will show that payment can be made from the personal electronic medical insurance card account. Currently, only some pharmacies with the “medical insurance payment” label accept medical insurance.
With the accelerated market growth, competition in the pharmaceutical O2O market is intensifying. As the largest third-party instant delivery platform in China, SF Express’s full entry will significantly impact the pharmaceutical O2O market.
Intensifying Competition
With Douyin and Kuaishou opening up to selling medicine and SF Express entering the pharmaceutical instant delivery market, the rapid development of pharmaceutical new retail is inevitably challenging traditional offline stores.
According to public information, SF Express’s newly launched pharmaceutical delivery solution covers the core medical consumption scenarios of pharmaceutical new retail and online hospitals.
From the perspective of pharmaceutical retail enterprises, SF Express’s local delivery service connects multiple systems, addressing the challenges of multi-channel operations. It adapts to operations across various platforms, including delivery platforms, in-store platforms, and pharmaceutical e-commerce platforms. The solution features a multi-capacity model with warehouse and delivery connections, assisting pharmacies in replenishment, inventory management, and eliminating intermediary steps to enhance efficiency.
Regarding the intensified competition in pharmaceutical logistics, a pharmaceutical distributor in South China told reporters that major pharmaceutical logistics companies such as Sinopharm Logistics, China Resources Pharmaceutical Logistics, Shanghai Pharmaceutical Logistics, and Jiuzhoutong Logistics still hold dominant positions. However, the expansion of socialized logistics enterprises, especially those represented by SF Express and JD Logistics, cannot be ignored.
On the other hand, the increased involvement of large enterprises in pharmaceutical new retail is intensifying the survival pressure on all parties in the ecosystem. SF Express’s internet hospital services directly connect to online diagnostic platforms, offering a one-stop service for “online consultations + urgent medication delivery,” providing a more convenient and efficient healthcare experience.
The entry of giants like SF Express into the pharmaceutical O2O market is accelerating the shift of traditional pharmacies from a product-centric to a patient-centric operational model. When industry growth slows, focusing on customer traffic and value becomes crucial. A pharmacy operator in Guangdong said that while traditional chain pharmacies may face challenges, they are better equipped to handle them. Community pharmacies may face even greater impacts.
Crowded Market
Despite the accelerating online challenges, traditional pharmacies are actively responding. For the pharmaceutical retail industry, which requires ongoing development, the path for internet giants entering the market is not without obstacles.
In March 2023, the State Council General Office forwarded the National Development and Reform Commission’s notice on “Measures to Restore and Expand Consumption,” emphasizing the vigorous development of “Internet + Healthcare” and optimizing various medical service facilities.
In addition to the continuous improvement of online processes, pharmaceutical delivery at the service end has become a key focus for optimization. According to the “China Retail Pharmacy O2O Development Report” released by Minet, it is estimated that by 2030, the scale of retail pharmacy O2O will account for 19.2% of the total market share, reaching 144.4 billion yuan. A multinational pharmaceutical executive indicated that digital healthcare has immense potential for future development, and companies must determine how to use digital healthcare to provide more convenient services in the diagnosis and treatment process.
With digital transformation becoming a prevailing trend, full-channel layout has become a consensus among many retail pharmacies. Listed companies that entered O2O early have seen their O2O sales double in recent years. As the model matures, most retail pharmacies view O2O as an inevitable industry trend. Embracing digitalization helps businesses find new growth points in the supply chain, meet consumers’ immediate needs, and provide more precise health management services.
Pharmaceutical companies that have acted early and invested continuously have seen their O2O sales double in recent years, with companies like Yifeng, Lao Baixing, and Jianzhijia showing growth exceeding 200 million yuan. Yifeng Pharmacy’s 2022 financial report shows that it has more than 7,000 direct-operated O2O stores; Lao Baixing Pharmacy also had 7,876 O2O stores by the end of 2022.
Industry insiders point out that SF Express’s entry into the pharmaceutical O2O market is related to its current business situation. According to SF Holding’s Q3 earnings report, SF Holding’s revenue in Q3 was 64.646 billion yuan, with a net profit attributable to the parent company of 2.088 billion yuan, a year-on-year increase of 6.56%. However, both revenue and net profit for the first three quarters and Q3 showed a year-on-year decline.
According to publicly available financial data, the decline in SF Express’s revenue is primarily attributed to supply chain and international business. Due to a continued decline in international air and sea freight demand and prices, business revenue decreased by 32.69% year-on-year.
Specifically, SF Express’s business consists mainly of express logistics and supply chain and international business. The revenue proportion of the express business has been decreasing over the past three years. In 2020, 2021, and 2022, the express business revenue accounted for 58.2%, 48.7%, and 39.5% of SF Express’s total revenue, respectively. This ratio increased to 45.1% in the first half of this year.
As traditional express services’ profitability continues to erode and the express logistics industry enters a new stage of “value wars,” SF Express faces increasing performance pressure. In the midst of fierce competition, SF Express is exploring new growth opportunities.
However, in the crowded pharmaceutical O2O instant delivery market, whether SF Express can capture market share from industry giants like Meituan and Ele.me remains uncertain. Industry insiders suggest that SF Express lacks advantages in traffic and pricing. Third-party platforms like Meituan and Ele.me have already cultivated consumer habits. “If SF Express can offer some subsidies on pricing, it might attract some merchants, but if it incurs long-term losses, such a business model will be hard to sustain.”
In addition to the aforementioned businesses, SF Express is also involved in cold chain logistics and live e-commerce, neither of which has exceeded 10% of its total operations. Both areas face strong competition from rivals like JD and Meituan, making SF Express’s path to success challenging.
In today’s competitive logistics industry, which has not yet reached its peak, business models are evolving. Traditional single services alone are no longer sufficient to maintain a competitive edge. To capture market share, companies need differentiated quality services. Whether logistics companies can capitalize on emerging new consumer trends to create new performance growth points is both an opportunity and a challenge.
HONGHAI CLOUD SIGNS WITH XUJI SEAFOOD, DRIVING HR MANAGEMENT TRANSFORMATION FOR THE LEADING SEAFOOD RESTAURANT CHAIN THROUGH DIGITALIZATION.
Hunan Xuji Hotel Management Co., Ltd. (hereinafter referred to as “Xuji Seafood”) is a mid-to-high-end restaurant chain specializing in distinctive seafood, with a menu that also includes classic Hunan and Cantonese cuisine. Adhering to the principle of “eating in season, preserving freshness and original flavor,” Xuji Seafood only uses seasonal, fresh, and healthy ingredients in its dishes. It is the top brand on the list of influential seafood restaurant brands in China.
Recently, Xuji Seafood entered into a strategic partnership with Guangzhou Honghai Cloud Computing Co., Ltd. Honghai Cloud has extensive experience in digitalizing human resources management in the restaurant industry, having helped numerous restaurant enterprises such as Tasty, Xiabu Xiabu, Green Tea Restaurant, Jiumaojiu, Meet Noodles, and Tai Hing Catering Group achieve leading HR digital capabilities. Through this collaboration, Honghai Cloud will build an integrated digital HR management platform for Xuji Seafood, enabling closed-loop management of HR processes and leading the digital transformation of HR in the restaurant industry.
About Xuji Seafood
Founded in 1999, Xuji Seafood opened its first restaurant in Changsha, established by its founder, Mr. Xu Guohua, who has a background in seafood supply. Xuji Seafood is committed to its mission of providing more people with the joy of healthy dining by offering higher value-for-money and fresher seafood. The company has established a management system where daily purchases match daily sales, and dishes are prepared and sold fresh. Xuji Seafood places a strong emphasis on sourcing certified raw materials from their places of origin and has implemented a stringent food safety system covering procurement, production, sales, and storage.
From the outset, Xuji Seafood has focused on building a robust supply chain to ensure the quality and freshness of its seafood. The company has established its own air and sea logistics, as well as cold chain distribution, and has stationed employees at major domestic ports, as well as in Southeast Asia, Australia, North America, and Western Europe, to personally oversee seafood quality. Over the years, Xuji Seafood has developed a strict selection standard and supply system for ingredients, product development, and sales, creating its own unique cooking style in the high-end Chinese seafood dining sector, and leading the industry. Currently, Xuji Seafood operates more than 60 direct chain restaurants in cities like Changsha, Xi’an, Wuhan, Zhuzhou, Shanghai, and Shenzhen. It consistently ranks at the top of local food and restaurant review lists, earning widespread acclaim from diners across the country.
About Honghai Cloud
Honghai Cloud is a leading provider of next-generation integrated human resources management solutions in China, offering digital solutions that cover the full spectrum of HR functions, including organizational management, attendance, payroll, recruitment, and performance. Honghai Cloud owns full proprietary rights to its technology platform and is one of the few companies in China to deeply integrate process engines and big data engines into its HR management products. To date, over 1,000 large and medium-sized enterprises have leveraged Honghai eHR to gain advanced digital HR management capabilities. Honghai Cloud has helped companies such as JNBY, By Creations, Meet Noodles, Jinmailang, China Electronics Technology Group, Action Education, Yiling Pharmaceutical, Poly Property, Delong Steel, and several institutes under China Railway, such as the First and Fourth Survey and Design Institutes, as well as Guangzhou Urban Planning Institute, to achieve digital transformation and upgrade their HR management systems.