China's e-commerce is booming as more consumers shop online and businesses attempt to digitize, including food delivery giants.
Chinese companies have recorded strong earnings for the second quarter as China eased their lockdown rules imposed previously to curb the spread of the coronavirus.
“Post COVID-19, the pace of digitization continues to accelerate and the shift from offline to online, in particular for individual shopping, is becoming a habit for consumers,” Jefferies said in a recent note explaining Alibaba’s June quarter earnings.
Meituan Dianping, China’s biggest on-demand delivery services firm, saw a net profit of 2.2 billion yuan ($319.5 million), a more than 152% year-on-year rise and compared with a loss of 1.58 billion yuan in the March quarter of 2020.
Meituan’s in-store, hotel and travel segment fell by 11.9% from last year, but people who ordered food to their homes helped its food delivery get a more than 65% uptick. The company also said that the number of newly-onboard branded merchants rose by more than 110% on-year in the second quarter.
“The pandemic has accelerated the restaurants’ online migration, increasing the mix of high-quality merchants on our platform during the period,” Meituan said in a press release.
Meanwhile, Alibaba reported a revenue of 153.75 billion yuan for the April to June quarter, a 34% year-on-year rise. That growth rate was greater than the one reported in the first quarter of the year. Ele.me, Alibaba’s on-demand delivery service, recorded some promising numbers.
“Ele.me food delivery GMV (gross merchandise value) growth turned positive in April and improved during the quarter as lockdown measures for the pandemic in China were lifted,” Alibaba said in its June quarter earnings release last week.
JD.com, Alibaba’s rival, also reported strong earnings. The company announced that net income for the June quarter was 16.45 billion yuan ($2.32 billion), rising over 2,500% year-on-year.
“Since the COVID-19 outbreak, JD has steadfastly leveraged our distinctive supply chain and technology capabilities to contribute to society and ensure the steady supply and undisrupted delivery of daily necessities to consumers,” Richard Liu, CEO of JD.com, said in the company’s earnings statement earlier this month.
Online shopping
Most shoppers, old and young, prefer online shopping nowadays, according to a new analysis released by e-commerce company ChannelAdvisor.
The survey, which involved 500 shoppers in the UK, suggests that shoppers turn to Amazon first for their purchase. They are also open to buying from brands they heard for the first time.
Findings revealed that for online shopping, 82% of the participants prefer Amazon when discovering new products and brands. Amazon is followed by Google (68%), eBay (49%), Facebook (22%), Instagram (16%), and retailers’ own websites (46%).
Moreover, Amazon remains the top choice for older shoppers (91% of those aged 65 or older). The platform was also a hit to younger shoppers, or 51% of those aged between 56 and 65.
The younger consumers mostly prefer social media channels: Instagram is the choice of 50% of those aged 18 to 25 for product research, and it is followed by Facebook (43%).
“Consumers’ online buying journey has changed dramatically as the digital landscape is in constant evolution. That is why understanding shoppers’ behaviour is so important for brands as a first step to develop their ecommerce strategy and ultimately grow their bottom line,” said Jon Maury, EMEA managing director at ChannelAdvisor.
