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Walmart and JD announce Fresh Assemble Initiative

April 24, 2018

Walmart last week announced a new initiative with JD.com's Daojia home delivery platform and seven major food suppliers. Called "Fresh Assemble", the initiative is aimed at streamlining Walmart's fresh supply chain and expanding Walmart's offerings of fresh goods available for home delivery.

The companies named in the announcement were Dole, Yili, Goodfarmer, Tyson, Sunner, Blue Snow, and Jinlongyu. The most substantial news in the announcement was that, as part of the Fresh Assemble initiative, Walmart and JD.com had added almost 100 new fresh SKUs available for delivery via JD's Daojia home delivery platform.

The upshot of this news is that now customers living within three kilometers of 180 Walmart retail locations in 30 cities across China can now use the JD Daojia platform to receive home delivery of 450 Walmart fresh goods SKUs—in addition to a range of other groceries and household goods. Customers order from the Walmart nearest to them through JD Daojia, via either a standalone app or a mini program inside of the WeChat messaging app. The good are then delivered by JD's Dada delivery service,  usually by an electric scooter-driving independent contractor.

According to the announcement, one goal of increasing the range of fresh goods available is to offer a basket of daily ingredients for more different types of consumer segments. Walmart also unveiled new designs for grocery delivery packaging, and said it plans to focus on providing recipes and education for consumers in a country where younger generations have started to drift away from the ritual of daily cooking at home in favor of takeout and pre-prepared options.

Other goals stressed in Walmart's announcement of the Fresh Assemble initiative were working with member companies to introduce new products and improving traceability and cold chain all the way from the production point, through Walmart's 11 national fresh goods distribution centers, all the way through delivery from a Walmart store to a customer's home. More generally, Walmart and JD seem intent on bolstering consumer confidence in the freshness, quality and safety of products that are delivered to their home as opposed to those they pick out themselves at a retail outlet.

Walmart said it was especially focusing on working with the Dada delivery service (which also provides last mile delivery services to customers outside of the Daojia platform) to improve how delivery orders are packaged, ensuring the hygiene of reusable delivery boxes, segregating hot and cold foods, and making use of insulation to maintain temperatures as products make their way from a Walmart store to a customer's home.

Walmart is one of several companies jockeying to get a slice of the market for home grocery delivery market in China—including JD.com, in which Walmart holds a passive investment, but which has also started its own high-tech, delivery-oriented supermarket called 7Fresh.

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