• Food Storage and Delivery in China

Food Storage and Delivery in China (Photo : Getty Images)

With the growing middle-class and an improving economy, the demand for safety in food and medical products is rising in China, an article in China Business Review said.

China's cold chain logistics, which supply products such as meat, fresh fruits and vegetables, seafood, fresh flowers and medical products, need strict standards, as demand for these perishable goods rises, according to L.E.K. Consulting, a global consulting firm.

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According to the report, the country's cold chain market grew more than 20 percent in the past five years, from 80 billion yuan in 2011 to 160 billion yuan in 2015.

The growth in the industry is expected to reach 400 billion yuan by 2020, with 40 percent to be spent on transportation, 30 percent in cold storage and the rest spent on other services, according to L.E.K. forecast.

The report said that although the country's cold chain industry is growing, its market is fragmented. The revenue from the top 100 cold chain logistics companies accounts for only less than 10 percent of the overall market, according to the China Federation of Logistics and Purchasing Cold Chain Logistics Committee.

According to L.E.K., the industry lacks end-to-end process control and each stage of the logistics chain is mismanaged. This results in damage to fresh products by 20 t0 30 percent, higher than the 5to 10 percent spoilage in developed countries.

In recent years, the Chinese government introduced a series of standards and policies that govern the cold chain logistics market. These include the Operation Specifications for drug cold chain logistics issued by the General Administration of Quality Supervision, Inspection and Quarantine and Standardization Administration of China in 2012.

In 2014, the National Development and Reform Commission also issued the guidelines for cold chain logistics services for aquaculture products.

A policy for medical transport and logistics was also issued by the International Air Transport Association (IATA) through formal certification, "CEIV Pharma," with the Shanghai Pudong International Airport as the first and only airport to receive the certification.

L.E.K. said that opportunities for investment abound in various sectors of the cold chain logistics industry such as ground transportation, cold storage and other logistics services.