WH Group Ltd., the world's largest pork company, announced that its wholly owned subsidiary Smithfield Foods Inc., has jointly launched a Tripartite Strategic Partnership Agreement with JD.com, China's largest retailer, and Henan Shuanghui Investment & Development Co. Ltd.
According to the agreement, which was announced at an event in New York, JD Fresh -- the fresh food division of JD.com -- will become the exclusive online sales platform for Smithfield's pork products in China. In addition, the parties will sell more than 10 kinds of exclusive products on JD.com and will further cooperate on big data, cold chain logistics and food traceability.
"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,” Kenneth Sullivan, president and chief executive officer of Smithfield, said at the ceremony. “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 long-standing reputation and sense of responsibility to our partnership with JD.com."
Ma Xiangjie, vice president of Shuanghui Development, the exclusive domestic agent of Smithfield, said, “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."
JD.com chairman and CEO Richard Liu said, "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."
The products sold exclusively on JD will include bone-in cuts and variety meats, with a focus on small packaged frozen products. These are all products Smithfield specializes in and include the types of products in highest demand in China.
JD Fresh is the largest direct-sales fresh food platform in China. In the first half of 2017, gross merchandise volume for meats from direct sales of meats on JD increased more than 780% year over year. It is now the largest online pork retail platform in China.
Launching these new products is just the first step in the partnership. According to the agreement, JD will leverage its big data insights to help Smithfield in areas such as data analysis and categorization of on-shelf goods and to carry out precisely targeted marketing campaigns based on in-depth studies of consumer shopping behaviors.
In order to ensure product quality and safety, JD and Smithfield will work on seamless cooperation in cold chain logistics. In the U.S., whether it is land or marine transportation, Smithfield can monitor in real time the temperature inside the cargo hold of a truck and inside a container. When the products are shipped to China, there are two sets of cold chain distribution systems -- from both JD.com and Shuanghui -- to help ensure quality and freshness.
Smithfield is a world leader in product traceability throughout animals' lifetimes. JD.com has also been actively implementing blockchain tracing technology in recent years. It set up the JD Tracing & Anti-Counterfeit Alliance earlier this year, which has been successfully applied to beef, chicken, seafood and other animal products. The cooperation between the two sides in the cold chain and traceability can ensure that the cold chain system in place will protect the quality of every piece of pork transported from the U.S. to China. Its "identity information" is open, transparent and searchable.