China’s embrace of e-commerce now extends to food shopping, with the country’s online retailers competing for consumers who’ve begun to turn away from conventional supermarkets.
The value of China’s online sales of goods is already larger than the EU and US combined, and the country’s early embrace of smartphones has made it even more convenient to click and buy.
Mark Godfrey has this story from Beijing.
Eric Li is Vice President of the e-commerce company Yiguo. It is the largest e-commerce providing fresh food in China.
Li spends a lot of time on the road convincing suppliers of fresh food to sell their goods on his website. He talked to me on his way to meet a delegation of foreign meat exporters visiting China.
“The consumer demand for fresh food is very resilient with the current financial correction and the slowdown for the economy,” said Li.
“I think we provide additional value compared to the traditional retailers in terms of freshness, safety and [the] price is also very competitive,” he continued.
International food exporters are seeing competition for their products among Chinese online retailers like Tmall.com and Yihaodian.com.
Sigmund Bjorgo is the China representative of the Norwegian seafood council and is known as an expert on marketing fresh food in China.
“It’s a seller’s market because all the platforms need the international products, the buyers are pushing more than the sellers are pushing,” Bjorgo said.
Customers are requesting more imported international food, and companies want to build their name as an international brand.
Bjorgo continued, “it’s the same as traditional retail. It’s all about being the first to introduce a new product.”
So why is e-commerce so big in China?
I asked Robin Wang who set up a marketing consultancy in Shanghai called SMH International to handle online sales and marketing in China for western food exporters.
Wang has been busy overseeing promotions for Chinese New Year, which falls in late January.
E-commerce is becoming popular amongst white collar consumers in China, according to Wang.
“China is now ranking the number one e-commerce country, surpassing even the USA. The lifestyle has changed. People with very fast work pace don’t have the time to go to the supermarket to do the purchases,” explained Wang.
Instead, customers prefer to download an ap to their smart phone, click away, and have products delivered to their home.
But Sigmund Bjorgo thinks e-commerce isn’t always ideal for perishable food products in China.
He sees the biggest challenge in the final mile, where products are transported via scooter from the warehouse to the consumer. The time involved in delivery, the temperature that goods are exposed to, and the wait if the customer isn’t at home to receive the delivery, all present problems.
“This is the weakest link. You can control everything until it reaches the last hub but you cannot as a brand owner control the last mile,” laments Bjorgo.
While there are some concerns, such as contrefeiting of foreign goods, many are optimisic.
Robin Wang predicts a big future for e-commerce in China.
“Chinese consumers receive new things very fast. Chinese people are very smart. .. Consumers find benefits; it’s cheaper, faster and reduces the hassle of going into the store.”
As Chinese New Year approaches the shopping rush is picking up pace. But this year a lot of the sales will be happening online.
Beijing native Shan Shan is typical of the new breed of Chinese shopper.
“There’s a good choice, it’s convenient and the quality is better. And you can get special products, speciality foodstuffs,” Shan told me.
The 25-year-old accountant likes trying imported foods. Rather than go to the market she’s buying all her food online for Chinese New Year Celebrations this time round.