'Safer and healthier': JD sees China organic product sales boom after establishing Organic Alliance with brands

21-Dec-2020 - Last updated on 21-Dec-2020 at 00:12 GMT

E-commerce giant JD has seen a boom in organic product sales in China after working with brand partners to establish the country’s first-ever organic alliance. ©Getty Images

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E-commerce giant JD has seen a boom in organic product sales in China after working with brand partners to establish the country’s first-ever organic alliance, with the firm saying demand has been boosted by consumers seeking 'safer and healthier' food.

JD established the Organic Alliance earlier this year in August alongside just over 10 brand partners, but in just a few months this has grown to over 20 partners.

“The Organic Alliance covers a diverse range of brands from food to maternal and child brands. We now have over 20 well-known domestic and foreign brands in the alliance, including Bellamy’s, Wyeth, Abbott, Anchor, Telunsu, Shengmu Organic Milk, Seamild, Junlebao and more,” JD FMCG General Manager of Packaged Foods Xiaojun Wang told FoodNavigator-Asia.

“The focus for these brands is to introduce organic products that are suitable for the Chinese market, and together we will expand the product lines of the JD Organic Alliance to provide Chinese consumers with more diverse, nutritious and healthy organic food.”

One of the alliance’s first projects has been a collaboration with JD Plus (JD’s membership-based platform for ‘highest quality’ users, big spenders with a per capita spending some nine times that of ordinary members) to launch a ‘PLUS A Plan Organic Life’ event, focusing solely on organic brands from within the alliance.

This event resulted in massive boosts in organic product sales, including a 129% jump in organic milk powder sales year-on-year, 240% increase for organic oils, 200% boost for organic nut sales and 200% increase for organic food supplement sales.

In addition, since the establishment of the alliance, JD observed that normal sales events such as 11.11 Singles Day have also seen a large boost in organic product sales.

“The JD Organic Alliance has been pushing for the ‘Organic Life’ concept to fulfil new consumer demand for organic products, [and] during the recent 11.11 sales, we indeed saw a strong growth in organic food sales,” said Wang.

“Organic dairy especially saw a lot of demand - the sales of organic milk increased by 10 times year-on-year, and within this, the sales of high-end premium organic milk showed a 40 times increase compared to that of the same period last year.

“The COVID-19 pandemic has really increased consumer focus on family and health and we believe that organic will continue to remain on-trend as long as consumers want healthier foods.”

Safer and healthier organic

Wang added that the Organic Alliance was established in response to a rise in demand from consumers looking for healthier foods with more assured food safety and quality after COVID-19 hit the country.

“Due to the COVID-19 pandemic, better quality food consumption has been the mainstream trend since the beginning of this year,” he said.

“Consumers are pursuing a healthier lifestyle and demanding healthier products, so quality, green (sustainable and natural), health, and food safety have become important decision-making criteria for Chinese consumers when making food purchases.”

The organic industry in China has long-suffered from a bad reputation with many consumers sceptical of organic certifications as these have been known to be purchasable at low prices, and basically wary of making such purchases at higher prices – a situation that JD intends to flip around with this new concept and new technology.

“We are looking to not only work with more brands to develop this organic culture, but also to take the opportunity to develop a complete end-to-end organic product system locally by utilising traceability and establish organic industry standards,” said Wang.

“We have partnered with the government, distributors and testing agencies to establish a code-scanning ‘organic traceability’ system for organic foods – JD will add traceability source codes to over a thousand organic products such as food, mother and baby, alcohol and more, which will record key data at every link throughout the product’s supply chain from production to consumer.

“This traceability system utilises the the Internet of Things (IoT) and blockchain technology to ensure that the data cannot be tampered with and will be securely stored to achieve full process traceability.”

The system is currently not yet interlinked with the Chinese government’s national organic traceability system with 17-digit codes, though all organic products in China would already have these codes attached in order to be recognised as organic locally.

JD’s role in the alliance

As the major retail platform behind the Organic Alliance, JD also has plans to provide a slew of support and services for participating brands to promote the Organic Life concept.

“Apart from the Organic Life concept, HD also intends to create an Organic Brands Support Programme for over one thousand organic brands – this will help brand-owners with the three areas of omni-channel solutions, all-rounded marketing and multi-user operability to create their organic label and identity,” he said.

“This will help with the high-speed and high-quality growth of the organic industry. Some examples of services under these three areas to strengthen the brand-consumer connection include ‘One-hour delivery’, ‘Reimbursement if expensive’ where consumers who find that prices of items they previously bought are even lower can apply for a refund of the price difference, ‘Worry-free after-sales’ and many more.

“Organic alliance partners can also utilise JD’s big data to accurately gain insights and target core target audiences to make more efficient conversions, thereby enhancing user life cycles and fostering user loyalty.”