Danish Crown in deal with e-commerce giant Alibaba
The agreement is the biggest e-commerce deal in Danish Crown’s history and comes as the company aims to expand sales in China, the world’s biggest pig meat consumer.
Soon, 466 million Tmall shoppers will be able to have frozen Danish Crown pork delivered direct to their door.
“Partnering with Tmall has enormous potential for Danish Crown,” said the company’s CEO Jais Valeur.
“Chinese consumers are buying much more of their food online than anywhere else in the world. By selling our products through Alibaba’s e-marketplace, we get access to a vast sales platform and ensure that Danish Crown can become a pork provider of choice for the growing Chinese middle-class.”
Meat sold to the Chinese via Tmall will initially come from Danish Crown’s factory in Ringsted, Denmark, which employs 900 staff and kills 62,000 pigs per week. In spring 2019, production will move to the company’s still-to-be-built factory in Pinghu, near China’s financial capital Shanghai.
The business plans to invest up to DKK 300 million ($47m) to move production closer to the end-consumer in China. This is because Danish Crown believes the food market here is becoming increasingly European.
Meat consumption is moving from the home and into foodservice. Online food shopping is growing fast, particularly in urbanised cities like Shanghai. Consumers are also buying less meat from traditional wet markets and instead seeking retail-ready meat packs that require less preparation.
To Danish Crown, this means one thing: opportunity.
Valeur previously spoke about the need to “capitalise” on China’s rapidly evolving food market and the deal to sell pork online in China is a huge breakthrough for Danish Crown.
To celebrate the agreement, meat from 1,001 Danish pigs will be sold on Tmall for Chinese New Year in February 2018. The number of pigs may seem random, but it is a homage to the Ali Baba story from Arabian Nights, which inspired the name of Chinese e-commerce giant Alibaba.
China is the world’s largest pork importer and Danish produce has an “excellent reputation in China”, according to David Lloyd, managing director of Alibaba Group for the UK, Ireland and the Nordics.
He added:“Chinese consumers increasingly want reassurance that the meat they consume is of outstanding quality and reared to high standards, and we look forward to working closely with Danish Crown to enable the 466 million annual active consumers on our e-marketplaces to buy quality Danish meat products on Tmall Fresh to enjoy at home.”