E-commerce has grown faster in China than in any other large market in the world. The growing middle class is boosting retail demand, but traditional stores are underdeveloped. To fill the gap, online retailers have made big investments in delivery infrastructure and e-payments, which are being taken up by a digitally advanced population. As a result, Chinese online retail sales shot up from 800 billion renminbi in 2011 to 5.2 trillion in 2016.
Now, Chinese retailers are trying out ways to break down some of the remaining barriers to digital shopping. Chinese consumers have been reluctant to buy certain items – in particular, fresh food – before they have seen them with their own eyes. So e-commerce players are setting up stores as showrooms and entertainment centers. Shoppers can check out the wares while researching them online, and then order via smartphone for quick home delivery. In sparsely populated rural areas, e-tailers have struggled to turn a profit on home delivery, but they are now opening efficient networks of convenience stores to solve the “last mile” problem.
