24 October 2018
SF Express packs its lychee in striking custom boxes. At right, tourists visit a lychee market. Photos: Internet
SF Express packs its lychee in striking custom boxes. At right, tourists visit a lychee market. Photos: Internet

Why this little red fruit is driving SF Express

There’s something about a certain exotic, fleshy fruit that’s stirring a quiet revolution in SF Express, a mid-sized Chinese logistics courier.

First, it introduced cold logistics in 2012, and now, it has taken control of the supply chain, cutting out wholesalers and retailers and selling the fruit out of its own online and physical stores.

It has deepened its relationship with its supplier, so that the fruit now comes with a certificate of freshness and authenticity.

All this is taking place around the little red lychee, a sub-tropical fruit that can only be enjoyed by people in the south of the country. Those in the north pay sky-high prices for the privilege of tasting them.

At this stage, SF is concerned less about making money than building a good reputation for its cold logistics business.

It’s all about freshness. Lychee is best enjoyed off the stem. Failing that, the next best thing is to have it straight from cold storage.

That is because once the fruit is detached from the stem, discoloration sets in within 24 hours, fragrance dissipates and taste deteriorates in the next two days.

That means the fruit has to be picked, transported and sold within 24 hours. This process is what makes cold logistics indispensable.

But the traditional logistics model, which involves layers of dealers and retailers, is too time-consuming. Often, the fruit withers before it reaches the customer.

After the initial success of a lychee promotion in northern China last year, SF Express decided to push the business further this year.

It’s working with the Guangdong Gaozhou government to secure supply. Gaozhou is famous for lychee production and the local government has given lychee certificates to SF Express to vouch for the authenticity of its origin.

The company sells nine pieces of lychee for 99 yuan, packed into a nicely designed rectangular box. It is quite pricey given the fruit could be easily bought for about 7 yuan per catty (approximately 10 pieces, depending on size) in Guangzhou.

People would also buy lychee as a gift with the nice package.

For big lychee fans, it is still much cheaper than the alternative — traveling all the way to the south.

Cui Xiaoqi, president of SF Best, the company’s online food store, told tech news site DoNews that although the group has invested millions in promoting lychee this year, it is yet to become profitable.

“We’re paying higher prices to procure lychee in exchange for better quality,” he said. “The cost of packaging and delivery is also high.”

Five-catty lychee has risen to about 50 yuan, cutting into the company’s profit margin. “We just want our customers to have a great experience with us.”

–- Contact the writer at [email protected]


EJ Insight writer

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