JD.com signs $1.2bn deal to import US beef, pork
The agreements are part of an overall commitment by JD to purchase $2 billion of U.S. goods across a wide range of categories over three years. U.S. Secretary of Commerce Wilbur Ross, Jr. and Chinese Vice Premier Wang Yang were in attendance to witness the signing ceremony, which took place at the Great Hall of the People.
“These groundbreaking agreements bring together two of America’s most trusted and in-demand meat suppliers with China’s leading e-commerce platform, to the benefit of both U.S. producers and Chinese consumers,” said Richard Liu, JD.com Chairman and CEO, who participated in the signing ceremony. “China’s shoppers will rest assured knowing that they are able to purchase safe, high-quality meat products imported from the U.S., with the fast delivery and ironclad assurance of authenticity that they have come to expect from JD. We look forward to expanding our long-term cooperation with high-quality U.S. meat producers like Smithfield and MSGA.”
Meat products are a fast-growing category for JD. In the first half of 2017, volume from direct sales of meat on JD increased more than 780 percent year-over-year, with imported meat accounting for more than 30 percent of those sales. Online orders for fresh and frozen meat come chiefly from first and second-tier cities, leaving huge potential for growth in online sales from the rest of the country.
JD will import Montana-sourced beef from Cross Four Ranch and MSGA members to China for direct sale to the 258 million Chinese consumers on its e-commerce platform. The procurement agreement is for an initial three years, with a minimum commitment of $200 million in beef to be imported by JD from Cross Four Ranch and MSGA members at fair market value during the term. It is estimated that JD’s purchase of Cross Four Ranch and MSGA beef will increase Montana beef export sales by as much as 40% in 2018.
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