“Add(ed) to Cart” in China

November 15, 2013 3 mins read
“Add(ed) to Cart” in China

I’ve just read a news flash that online shopping figures in China has overtaken USA

A detailed report on China’s online shopping trend is available here. As a resident in Shanghai (and a regular “contributor” to the likes of Groupon and Qoo10 back home), I’m supremely impressed by the way online retailers and payment service providers constantly innovate to lock in their customers.

Other than creating super user-friendly Apps and the usual push notifications, they have various functions to “Remember your favorite categories”, “Groceries on a weekly basis”, “Favorite brands”, “Summer is here! Cool off now!” etc., and it can take days to finish browsing the entire website choked full of hot items. Buying anything you want is just a 1 minute affair and best of all: It gets delivered THE VERY AFTERNOON if you book in the morning! When you take China’s size and the huge population into consideration, this is truly an amazing feat. One of the biggest investments for any online retailer is supply chain management and order management software, and those big players really aced it.

Colleagues will whip out their smart-phones whenever they want to buy groceries for tomorrow’s cooking or to snack over a long weekend. On the way to work, I will hear commuters talking to delivery guys to arrange goods to be sent to the intended address. This has become part of our daily life, and it is hard not to examine some of the key success factors:

Great price and hassle-free: Online retailers provide better price, door-to-door delivery and easy online payment through their internet banking service providers. In addition, I do not have to walk down aisle after aisle looking for that favorite potato chip. It’s stored in my “Favorite” page. Plus, I do not have to lug them home.

Dependability: The goods will be delivered the very day (!) or the next day, in some cases. This supports the need for instant gratification and allows consumers to re-think if a trip to the supermarket/shopping mall (to get the item today, but put in so much effort) is worth it when the time difference is minimal.

Security: I have read and heard of cases where delivery and cash payment created misunderstandings and hassles. When payment can be made online, it’s secured and traceable.

Wider range than anywhere else: With everything under 1 roof, consumers can buy vacuum cleaner, detergent, water, milk for the kids, breakfast cereals, make-up, clothing, books etc all on 1 website. Not only is this a time-saver, but with all the promotions, it’s much easier to coax an extra item or two from each consumer, getting them to spend here rather than elsewhere.

Sending my love country-wide: With such a well-connected supply chain, consumers can pay for and send goods to my mum or kids at home, never mind that they are in another province or city. This is especially important for a country that values filial piety and family cohesiveness.

I recalled wondering why some shopping malls are relatively quiet, even on weekends, when I first arrived. After being a user of online shopping, I understood the phenomenon a little better and do wonder how traditional retailers can try to preserve their market share. Families still go to brick-and-mortar shopping malls for the whole experience of spending time with families, window-shopping and enjoying the shopping experience as a whole, but I’m betting my money on the online retailers for now.

Morgan McKinley
shanghai@morganmckinley.com