ClearVue keeps it fresh with Fruitday

As the country signs more trade agreements, gradually opens up its domestic market to exporters, farmers from the likes of Chile, New Zealand and Taiwan are able to ship in their goods at zero tax. Fresh fruit from foreign climes is becoming cheaper.

There is also a mismatch in terms of expectations of fruit quality in China. "High-quality fruit grown in China always goes to the export market. Products sold domestically are less juicy," says Hui. "As local consumers' incomes rise, so does demand for quality fruit, and people are willing to pay more for it."

Fruitday, a Chinese e-commerce site dedicated to selling imported fruit, is trying to address this mismatch. Last week, ClearVue led a $10 million round of funding for the company, followed by SIG Asia Investments. It is the fifth investment from the $262 million ClearVue Partners Fund I.

Fruitday was founded by Guozhang Zhao and Wei Wang in 2009. The latter's father worked as a fruit wholesaler for 30 years and so he grew up with the industry and brought to the table a strong network of suppliers. "Wang decided against following his father's business model in favor of creating a way to sell online because the vast majority fruit is imported," Hui says.

Last year, Chinese fresh fruit consumption reached more than RMB400 billion ($64 billion), up 15% year-on-year. But imports of fruit are growing even faster - particularly in major cities such as Beijing and Shanghai - touching an estimated annual rate of 40%.

Fruitday, which generated RMB240 million in revenues for 2013, is looking to ride on this wave of expansion.

After five years spent building up a network of merchants, the company now sources fresh fruit directly from countries including the US, Australia, New Zealand, Spain, the Philippines, Peru and South Africa. Fruitday has also built its own warehouses and logistics systems in Shanghai, Beijing and Shenzhen, in order to standardize services and keep down costs.

Future plans include the introduction of a 48-hour delivery service and the construction of additional warehousing. The latest round of funding will go towards these efforts, as well as to marketing expenditure.

"We could reduce our product damage rate by 5-10% through our own sourcing and logistics systems, compared to a 40% rate when using traditional transportation and logistics systems," says co-founder Zhao.

He adds that he is unfazed by increasing competition in the imported fruit industry, arguing that Fruitday's logistics infrastructure is difficult more market entrants to replicate.

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• Topics
• Greater China
• Consumer
• Technology
• Expansion
• China
• ClearVue Partners
• Growth capital
• Consumer
• TMT