FarmmiInc (NASDAQ: FAMI) has announced its entry into a calculated investment and collaboration contract with Sigma Holding (Hangzhou) Co., Ltd., and Hangzhou Xuyue Interactive Culture and Media Co., Ltd. The planned investment and collaboration will be through its subsidiary Farmmi (Hangzhou) Enterprise Management Co., Ltd., and signals its vigorous expansion into the delivery network of farming yields.
Given the surge in domestic community group purchasing, the last kilometer of the new food distribution has become a significant holdup and challenge. Professional distribution amenities for urban groups have arisen to profit from the trend and meet the higher demand. The market capacity of the community group-buying market in China was projected to be RMB 34 billion in 2019 and RMB 72 billion in
3 Partners to participate in the Formation of New Urban Delivery business
Farmmi, Sigma, and Hangzhou Xuyue are uniting and will mutually invest in founding a new company as part of a 50-year contract.The new company is dedicated to becoming a complete service provider of community group buying delivery networks and will seek to profit from sustained broader market distribution tendencies.
Yefang Zhang, Farmmi’s Chairwoman and CEO, said, “We are affiliating with two robust companies, which will give the new business the fiscal possessions and know-how acute to a prosperous unveiling. We have directed extensive market research and have a plan in place to make sure we move quickly and begin seizing our share of the large delivery opportunity.”
Zhang Continued, “The ‘last mile of delivery’ poses a test to all the delivery platforms, signifies a major opening for the introduction of an urban delivery service for community group-buying. Fresh products, like fruits and tubers, are the most conspicuous classification in community group buying.”
Equity Organization of new venture
All three companies are based in Hangzhou City, Zhejiang Province, have settled that the new company will begin with having a total listed capital of RMB 20 million before September 30, 2021.