It quite common nowadays to see young Chinese couples order food on their smartphones after a long day at work. Ordering dinner this way probably costs only around 30 yuan, a bargain given all the time saved from not having to go to the market, cook and wash dishes.
It’s even more convenient than having instant noodles. No wonder food delivery platforms have emerged as a threat to the instant noodles business.
Online shopping has been around for years, but it has been constantly evolving and getting better.
Not only can the internet vendors offer everything from clothing to food, their selling methods are also becoming more innovative.
For instance, some clothes vending apps allow customers to try at home with zero commitment. Customers can select, say, 10 items. These items will then be sent to them and they have, say, one week to try and decide which ones to keep. Someone will later pick up the returns.
How can traditional shops compete against this kind of service?
Taobao might be the household name when one talks about online shopping in China. Most Taobao shops are pure e-vendors, and they fulfill orders typically in one or two days.
A number of new players have also posted rapid growth, entities such as Meituan and Elema. Unlike Taobao, lots of vendors on these sites are brick-and-mortar stores offering customers nearby express delivery of food or grocery items within half an hour.
In the past, location was a key factor for brick-and-mortar retailers to win traffic and business, because convenience counts a lot. But now shopping pattern has changed, as more consumers prefer to stay at home and shop the world from the internet. So business owners are now competing to list their products on the most popular shopping sites.
If a shop doesn’t have an online presence, it simply cannot reach out to customers.
Advertising follows traffic. As e-shopping reshapes everything, advertising dollars will keep flowing to the online platforms.
Online shopping sites often encourage customers to make payment using mobile apps instead of cash or credit cards. Hence, the payment apps are also benefiting hugely from the online shopping trend.
Such trends would only accelerate, as shoppers born in the 80s and 90s and the early 2000s become the backbone of consumer spending.
This article appeared in the Hong Kong Economic Journal on July 23
Translation by Julie Zhu
[Chinese version 中文版]
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