Ensuring The Safety And Quality Of F&B E-Commerce Products
Thursday, January 30th, 2020
Asia Pacific Food Industry magazine interviews Jiang YiFan, Head of Science and Regulatory Affairs at Food Industry Asia (FIA) to gain insight into the changing regulations with regards to F&B e-commerce.
How can we ensure the quality and safety of the food purchased via online channels?
The exponential growth of online food transactions has now cast a spotlight on food safety and control challenges as products may be contaminated or mishandled at any point along the supply chain, especially in the last mile of delivery.
For example, the characteristics of a food product could be altered due to less-than-optimal temperature control during delivery, which could lead to the introduction of bacteria. As delivery is usually carried out by third-party operators, the handling and storage of food during last-mile delivery may be undermined, especially as these deliverymen lack the relevant knowledge or training on food-handling.
With the increasingly complex e-commerce food supply chain, gaining consumer trust should be the top priority and firms must be committed to reassuring consumers by offering practical solutions to solve issues that may arise from these transactions.
The advent of technological solutions is increasingly allowing companies to resolve supply chain issues. For example, companies can now adopt the use of QR codes on products to enable traceability along the supply chain—data that can be retrieved include the product origin, manufacturing location as well as delivery data. Consumers can also track the product at the point of purchase as well. This level of transparency can help alleviate consumers’ concerns of product authenticity.
In addition, the problem of food safety can be mitigated through more thoughtful packaging solutions to make sure products are still safe and intact when they reach the consumers. In the case of temperature assurance for food products, the use of thermal insulator materials and ice packs can ensure chilled products are kept at the right temperature during delivery. The use of stronger materials can also lessen the risk of cross contamination and damage during transportation and handling.
It is therefore important for stakeholders to avoid casting a general net over food packaging—the packaging of different food products needs to be individually considered to ensure food safety at every stage along the supply chain.
Realistically, e-commerce challenges will not be solved overnight. With the rapid pace of global urbanisation, the challenges will become more complex as consumers turn to the convenience of e-commerce. All stakeholders—food industry players, regulators and e-commerce platform providers—need to be proactive in resolving possible issues or threats.
Today, industry associations such as Food Industry Asia are collaborating with stakeholders along the supply chain to create a platform for regular sharing and discussion of issues—only with greater awareness and more discussions can the evolving challenges on the quality and safety of food distributed via online channels be mitigated.
What are the regulatory gaps in the food e-commerce sector?
According to a survey conducted by the Codex Committee on Food Labelling, a majority of the 188 member countries indicated that there are currently no international regulations that specifically relates to e-commerce transactions of food products. This brings about much room for ambiguity over the safety and quality control of food products sold online.
Without regulations or guidelines to control online transactions of food products, the risk of poor quality or inauthentic products reaching consumers remains. Today, only a few countries in Asia such as China and India have developed specific regulations for food e-commerceIn the last few years, the Chinese government has passed several regulations geared toward tightening controls on the safety of food that are sold through online platforms, as well as increasing the accountability of e-commerce platform providers under both domestic and cross-border e-commerce.
Additionally, the rise of e-commerce has made the supply chain of food products more complex than ever before. This increased complexity brings about a greater question regarding the liability of stakeholders along the supply chain and these ambiguities become more complex for cross-border transactions. It has become more challenging to determine who is responsible for food safety incidents arising from e-commerce food transactions due to the increased number of stakeholders end-to-end.
While regulatory gaps bring about food safety and quality challenges, we must be mindful that an over-regulation of the industry could ultimately affect consumers’ accessibility to products online and pose as a barrier to trade.
In all, we believe in a balanced approach in the development of regulations to ensure consumer protection, food safety and quality through the establishment of responsibilities and expectations of the multiple stakeholders along the supply chain of e-commerce activities.
In your opinion, how will the food e-commerce sector evolve in the next few years?
As consumers become more connected, tech-savvy and mobile than ever before, e-commerce has since seen rapid growth in the past few years. Food is gaining importance in the e-commerce space, ahead of other categories such as consumers and household electronics, sports and recreation. In China, it is bigger than the toys category and in Indonesia, it is also bigger than health and beauty*.
As technology continues to advance, and as consumers place a greater emphasis on convenience, the food e-commerce sector is expected to maintain a positive growth trajectory in the near future.
Asia, in particular, is benefitting more than any other region in the world as the popularity of e-commerce intensifies. With the region’s total e-commerce revenue expected to surpass US$1 trillion by 2020*, it will likely become the global hub for e-commerce in the next few years.
Technology will undoubtedly remain a key driver of growth for the e-commerce industry. The development of payment solutions and improvements to logistical processes will see significant advancements, and businesses’ capability to adopt them will be crucial in determining whether they can successfully reach consumers via online channels. New technologies such as Artificial Intelligence (AI) and blockchain could also open opportunities to enhance the efficiency of e-commerce trade and build trust by increasing transparency of food supply chains.
On the consumer front, the online grocery retail sector will continue to expand. According to IGD, online grocery sales across Asia’s top 12 markets is set to reach US$295 billion by 2023—accounting for 7.6 percent of total grocery retail sales*. This is attributed to the fact that an increasing number of time-pressed shoppers are seeking fresh food and different product assortments, but want convenience; and this can only be achieved via online channels.
This growth is also partly due to more traditional retailers opting to introduce their own e-commerce platforms in a bid to capture a slice of this booming segment. For instance, leading retailers such as NTUC Fairprice in Singapore and Tesco in Malaysia have launched their e-commerce grocery platforms as they seek to optimise the omni-channel customer journey.
Moving forward, we do not expect the rise of food e-commerce to slow down anytime soon. While we welcome this growth, it is unavoidable that we will continue to see issues arising due to the lack of harmonised standards and regulations. Having more guidelines and policies would help ensure that food is properly handled along the supply chain and also protect consumers. In doing so, the rise of food e-commerce will grow exponentially, and more importantly, sustainably.
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