China is on pace to grow its’ e-commerce at a more faster rate than ever before. Alibaba, China’s largest e-retailer, is driving a lot more traffic via its’ online store versus shoppers physically going out to make their purchases. A recent article shows how indeed the malls in China are experiencing less traffic and it hurting sales. With the expectations of the retail industry to generally make up for any quarter losses and boost sales, these November results are not what mall owners and retailers want to hear during the holiday season.
Internet Retailer via Bloomberg News discussed in an article about how China mall traffic id decreasing and is directly affected by e-commerce. This was due to a surge of online shopping activity for the holiday season, according to Baidu, operator of China’s dominant search engine, and JD.com. It stated that China’s wealthy consumers are shopping online for more pricier items from e-retailers like Alibaba, which made $18 billion in one day during the month of November and Same-Day Delivery attracts customers as well. This attests to how online shopping is moving beyond just being a trend globally.
“China’s two-speed scenario is having a major impact on the country’s retail industry,” Jason Yu, general manager for China at consumer research firm Kantar Worldpanel, said in a report. He also stated, “This massive explosion of online sales growth is being fueled by increasing diversification in the categories purchased online, as well as huge gains in imported products and consumers taking advantage of promotions.”
In regards to the overall trends of retail in China, Matthew Hassan, a Sydney-based senior economist at Westpac Banking Corp., said in the article, “The gradual improvement in the consumer mood over the last two years, from extreme lows in late 2014, seems to again be losing its way. With confidence still materially below long-run averages and consumers still concerned about job security and the economic outlook the consumer recovery is clearly still fragile.”
Although malls are being affected by online retail, these same stores can implement same-day delivery to move product and deliver them to customers. Macy’s partnered with Deliv and launched same-day delivery in multiple major US cities last year in San Francisco, Los Angeles, San Jose, Seattle, Houston, Chicago, New Jersey, and Washington DC, in addition to adding more. Its’ sister company Bloomingdale’s also launched the service in San Francisco, Los Angeles, San Jose, and Chicago.
Mall retailers experiencing the same downturns in the US, can have a Nationwide Courier like 1-800 Courier to develop a same-day solution also. The Houston Courier has a national footprint, able to pick up and deliver from malls. Online retail is expected to reach $500 billion by 2018, and malls can partner with 1-800 Courier to get their store product sold via omnichannels that connect physical store to online sales growth.
Reference: 12.12.16, www.internetretailer.com, Bloomberg News, China’s e-commerce boom shrinks mall shopping traffic