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Smithfield Foods Expands Into China

Smithfield Foods Expands Into China

Wednesday, November 1st, 2017

A Tripartite Strategic Partnership Agreement has been struck between a WH Group Limited, also known as Henan Shuanghui Investment and Development Co., Ltd., company and a Chinese powerhouse fresh food delivery company, Smithfield Foods, Inc., a well-renowned U.S. pork processor, and JD.com, one of China’s largest retailers. A recent press release explains that JD.com’s fresh food division, JD Fresh, will become the exclusive online sales platform for Smithfield’s pork products in China. More than 10 exclusive products will be sold on JD.com, and the parties plan to further cooperate on data, cold chain logistics, and foods traceability.

Kenneth M. Sullivan, President and CEO, Smithfield Foods

"Through this partnership, Smithfield Foods will take yet another step in developing its e-commerce business and expand its presence in China, as we meet consumers where they shop. Smithfield has a strong food safety platform and we take this even further to deliver products consumers enjoy and feel good about sharing with their families. We are proud to bring this longstanding reputation and sense of responsibility to our partnership with JD.com," said Kenneth Sullivan, President and Chief Executive Officer of Smithfield at a ceremony commemorating the agreement.

With a reputation for its high-quality pork products, Smithfield’s collaboration with JD will include bone-in cuts and variety meats. There will also be a focus on small-packaged frozen products. All of the products to be rolled out in this joint venture are Smithfield specialties and high-demand products in China’s market. The products will be sold by JD Fresh, one of the largest direct sales platforms in China for fresh food, so Smithfield’s contribution will cater specifically to China’s market’s taste buds.

Smithfield Foods products (Photo Credit: REUTERS/Bobby Yip)

This partnership between the two will be exciting to watch, as gross merchandise volume for meats from direct sales on JD have shot up 780 percent year-over-year. The press release explains that it is now the largest pork retail platform throughout China.

While these details are cause enough to be excited about the partnership between the two, their dealings don’t stop there. JD plans to leverage its big data insights to assist Smithfield in areas such as data analysis, categorization of on-shelf goods, and targeted marketing campaigns based on in-depth study of consumers' shopping behaviors.

Richard Liu, Chairman and Chief Executive Officer, JD.com

"Ensuring the quality, safety, and reliability of everything we sell is part of JD's overall commitment to our customers. When it comes to food, and particularly a major staple of Chinese households like pork, this is even more critical. That's why we are pleased to be working with Smithfield, a trusted and respected partner with a long history in the industry, to offer easy access to high-quality choices for even more families around the country,” said Richard Liu, Chairman and Chief Executive Officer at JD.com.

Cold chain logistics are set to benefit from the collaborative efforts of JD and Smithfield, as the two companies seek to ensure product quality and safety. Smithfield is able to monitor the temperature inside the cargo hold of a truck and inside a container in real time. There are two sets of cold chain distribution systems, from JD.com and Shuanghui, once the products are imported to China. This dual process ensures quality and freshness never drop.

Smithfield Foods products

Smithfield’s exclusive domestic agent in the venture is Shuanghui Development, whose Vice President is Ma Xiangjie. In the same press release, Xiangjie expresses, "Shuanghui Development will capitalize on its national presence of industrial facilities and knowledge of domestic and foreign consuming habits to introduce more and more Smithfield and Shuanghui products for family meals, meeting the personalized and convenient needs of the end-user towards imported products."

Both Smithfield and JD.com have much experience with tracing products to procure their best for customers. Smithfield has become a world leader in tracing its products throughout the animals' lifetimes. On the other hand, JD.com has been implementing tracing technology for block chains in recent years, setting up the “JD Tracing and Anti-Counterfeit Alliance” that has been applied to beef, chicken, seafood, and other animal products since earlier this year. Between the two companies, the traceability of products will ensure the cold chain system protects the quality of pork cut transported from the U.S. to China. There is open, transparent, and searchable “identity information.”

Smithfield Foods products

After Smithfield’s acquisition by WH Group in 2013, this is one more way the two show a smooth-running alliance. The company’s global industrial resources deployment capitalizes on the the opportunity to deliver direct, high-quality products to China’s market. The ease of this developing partnership will establish high-quality, imported pork products are available for Chinese consumers to enjoy. The relationship also fills in gaps for the domestic market of fresh, imported pork products by bringing traceable, safe, and quality products. It is maximizing online shopping experiences for consumers by making cold chain logistics and self-operated after-sales services efficient.

For more developments in the industry, stay with us at Deli Market News.

Smithfield FoodsJD.comWH Group