China E-Commerce Slows Mall Traffic, Malls Need Same-Day Delivery

With the growth of e-commerce, it is only a matter of time that it will be a normal way of doing business.  The US isn’t the only country where online growth is thriving, but in China as well.  China’s e-commerce is increasing at a fast pace, and is now even affecting its’ mall traffic.

Internet Retailer discussed in an article how the foot traffic in malls and restaurants went down in November.  This was due to a surge of online shopping activity, according to Baidu, operator of China’s dominant search engine, and JD.com.  China’s wealthy consumers are shopping online for more pricier items, primarily via e-retail leader Alibaba, which even had $18 billion in sales in one day the same month mall sales declined.  Alibaba offers Same-Day Delivery in various areas as well.

“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. “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.”

Malls are being affected by e-commerce, as more and more shoppers rely on the mobile devices to conduct all of their shopping.  Also, with the delivery option of same-day delivery, it has even given shoppers a level of convenience that has been created via technology advancements that had not been present before.  Mall stores are having to shift their focus from in-store to online sales.  Online retail is expected to reach $500 billion by 2018, therefore, it is imminent for malls to develop various omnichannels to generate growth.

This is what Macy’s has done in the US.  The mall giant launched same-day delivery in multiple major US cities last year, offering another option for online shoppers.  Partnering with start-up delivery company Deliv, Macy’s implemented same-day delivery in San Francisco, Los Angeles, San Jose, Seattle, Houston, Chicago, New Jersey, and Washington DC.  Its’ sister company Bloomingdale’s also launched the service in San Francisco, Los Angeles, San Jose, and Chicago. With at least 885 physical store locations, Macy’s uses them as close proximity warehousing to fulfill online orders, thereby moving store product.

Matthew Hassan, a Sydney-based senior economist at Westpac Banking Corp., also wrote in a statement regarding overall sales for , “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.”

In the US, stores like Macy’s, BestBuy, PetSmart, and more have all bridged their e-commerce to store sales with same-day delivery.  Mall stores that are seeking to create store growth can do the same by partnering with a Same-Day Courier like AQuickDelivery to fulfill online orders.  The Atlanta Courier can develop a same-day solution that picks up product from malls and then delivers them to the doorstep of the shopper.

Reference:  12.12.16, www.internetretailer.com, Bloomberg News, China’s e-commerce boom shrinks mall shopping traffic