On Jan 2nd, 2020, the State Council of PRC released Opinions on Sustaining Good Key Work in the Areas of Agriculture, Rural Areas, and Farming. In this document, the State Council encourages the development of China's cold chain logistics capacities. [1]
China's existing cold chain infrastructure has limited the capacities of its cold chain logistics and downstream links in the supply and value chains. These shortcomings were exposed by the disruption in supply chains and the surge in demand experienced during the COVID-19 outbreak in China. On Feb 13th, 2020, China State Council released a notice on curtailing live poultry markets. The government suggested that frozen meats would fill the supply vacuum created by closing these markets and that cold chain logistics would play a crucial role in realizing this transition. [2]
During China’s mandatory lockdown at the peak of its COVID-19 outbreak, there was a massive spike in demand for cold chain logistics. To avoid public gathering, many people turned to fresh-food e-commerce channels, such as Alibaba's Hema App (“盒马鲜生”), Ding Dong Mai Cai (“叮咚买菜”), Miss Fresh (“每日优鲜”), etc. According to QuestMobile 2020 Special Report on Mobile Internet's Performance in Fighting COVID-19, during the period from Jan 24th to Feb 2nd, DAU growth of Hema, Ding Dong Mai Cai, and Miss Fresh exceeded 100%.[3]
Cold chain logistics infrastructure and capacity will be a major limiting factor in the further development of China's agri-food sector and downstream supply chain links, including new retail. Developing capacity will help reduce unnecessary waste and food spoilage and increase the overall profitability for stakeholders. China needs to develop comprehensive cold chain infrastructure and build key capacities for fresh food in first-tier cities, second-tier, and third-tier cities. China's outbreak of COVID-19 has had a significant impact on purchasing behaviors in China, which has played out in a palpable shift away from bricks and mortar retail and towards e-commerce. As new retail continues to develop and innovate, the development of cold chain logistics will need to keep pace.
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