China food startup becomes tech unicorn

Global Business

You’ve probably never heard of this three-billion-dollar Chinese tech startup, but if you’ve dined in a Chinese restaurant then it probably helped put the food on your table.

Xu Laiwai’s daily onion production has grown exponentially in the last four years, hitting 10,000 kilograms a day. That’s a figure the farmer never thought possible just four years ago when he ran a one-man operation.

“Before, you didn’t have a way of expanding your business even if you wanted to,” said Xu Laiwei. “I could only sell my several hundred kilograms at the local market. We farmers never worry about whether we can bring out good harvests, we worry about where we can sell them.”

And then along came tech startup Meicai.

CGTN’s Sun Ye takes a look at Meicai’s speedy growth.

Meicai is a fresh produce e-commerce platform that found Xu, and promised a stable demand from small and medium-sized restaurants.

Yuan Bo is just one of its one million registered users. He says the platform has changed his life.

“We used to rely on a small dealer on the outskirts to provide for us,” said Guxiang restaurant owner Yuan Bo. “But sometimes they took the orders wrong and couldn’t meet our requirements. What we want is simple: good quality, reasonable price, and reliable delivery. And then everything is done on your phone these days.”

He uses several similar business services on his phone. But Meicai is rare because it builds its own warehouse and delivery chain.

This is one of Meicai and China’s biggest warehouses. It will cater to the country’s fast-expanding fresh produce e-commerce. In 2017, the total transaction value of the market has reached $20 billion. And scale is what Meicai founder, Liu Chuanjun, sees as the reason for the 4-year-old company’s rapid success.

“We made the judgment early on, that it was size and scale we were aiming for,” said Meicai CEO Liu Chuanjun. “Only when you’re operating on a large scale, can you guarantee the farmers stable orders, and tell them what to grow and how best to grow. Especially now that most Chinese farmers just work within a household, and have little knowledge about demands beyond their local region.”

As a farmer’s son, Liu knows the agricultural seasons. He says the company launched at just the right time.

“Agriculture has long been a complex, difficult industry,” said Liu. “But mobile internet has broken down so many barriers. And the country has recently been bringing out many incentives to jump-start agriculture, as well as rural areas. We think the timing is very good.”

Angel investor Rui Ma discusses the growth in Chinese unicorns

CGTN’s John Terrett spoke to Angel Investor Rui Ma about the growth in startups valued at more than $1 billion.