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China’s First Organic Seedling Cultivation Site Under Construction
According to Beijing Business Today, Huaixiang Agriculture, the largest organic vegetable production base in Beijing, has now set up shop in the town of Machangying, Pinggu District, where the company is constructing China’s first organic seedling cultivation site. Huaixiang Agriculture is an important supplier for Alibaba’s grocery chain Hema, selling 70% of its organic vegetables to Hema Fresh supermarkets, including 17 different products such as bok choy, oilseed rape and spinach. Huaixiang Agriculture also sells a portion of its organic vegetables to Jingdong, Tmall and Sam’s Club.
China’s consumption of organic products has been increasing by 14% annually — a growth index ranking first in the world. When Hema first went online in 2016, less than 5% of its customers were purchasing organic vegetables. However, in 2020, Hema launched the brand “Hema Fresh Organic,” and by 2021, the company had experienced an approximately fivefold increase in the number of consumers of organic vegetables. At present, approximately 20% to 30% of the stock keeping units on Hema’s platforms are organic vegetables, representing almost 20% of the company’s sales. Meanwhile, Hema’s penetration rate for organic vegetables has increased from 5% to 20%, and the company plans for this to reach 30% to 40% in the future.
By optimizing its high-quality bases across China and signing planting agreements, Hema has simplified the varieties it grows and achieved large-scale planting. At the same time, the company has greatly cut production costs by determining planting and production quantities according to order and sales volumes. Some of Hema’s organic vegetables used to cost six or even ten times that of conventionally grown vegetables. Now, however, the price of organic vegetables in Hema Fresh’s Beijing stores has decreased to only one and a half to two times that of conventionally grown vegetables, increasing their affordability to Chinese consumers.
Hema sources its organic vegetables from over 100 planting bases similar to Huaixiang Agriculture across China. It has partner bases in 20 different provinces and cities, which supply Hema’s stores and online platforms with 60 to 80 different types of organic vegetables.
This article was translated from Chinese. Read the original article.
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