Alibaba Rival JD.com Invests in FruitDay and Produce Delivery

NEW YORK (The Street) -- New investments from online retailer JD.com (JD) show the company is flexing some muscles to improve the delivery of produce in China.

JD.com Saturday announced that it is taking a stake in FruitDay, an online seller of fruit and produce in China.

JD was the lead investor in a $70 million Series C round along with Susquehanna International Group and ClearVue, who both participated in previous rounds though it is the first for JD.

FruitDay, which offers imported produce from countries such as the U.S., Australia, New Zealand, and Chile, is already the largest seller of fresh produce on JD's marketplace.

"With our shared commitment to providing consumers with the best online shopping experience, FruitDay and JD.com are natural partners as Chinese consumers increasingly shift to purchasing fresh produce online," JD Mall CEO Haoyu Shen said in a statement.

JD.com declined to share how much it invested in FruitDay or what percent stake it now owns in the company.

FruitDay is the only fresh food company in China that has earned the National Sanitation Foundation certification, which provides public health standards. It also provides a full fleshed supply system, from procurement to storage to logistics. The company delivers to customers twice a day and uses temperature-controlled equipment to ensure the produce is fresh.

"We identified fresh produce as a key target area this year as part of our strategy to dominate key growth verticals in the Chinese e-commerce space," said JD senior director of international communications Josh Gartner. "Our investments in travel, car sales, and produce reflect that strategy. FruitDay is the clear market leader in China, and has outstanding expertise in the difficult area of transporting fruit globally and getting it to consumers in excellent condition."

At the Harvard China Forum last month, JD CEO Richard Liu spoke about the company's ambitions in China and focused specifically on produce delivery. This category has been top of mind for JD for the past two years, but is a particular priority in 2015, according to Gartner. This is one area in which JD could theoretically take on its rival Alibaba (BABA).

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