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E-commerce eroding traditional supermarket business in China

Chinese consumers are buying their fresh goods online eschewing traditional bricks and mortar supermarkets

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The world’s largest retailers have slowed down expansion in mainland China by 27% as e-commerce has grown in popularity.

The findings from the latest data showed a dramatic change in consumer buying behavior, with fruit and daily necessities being purchased e-commerce websites. This shift  has impacted traditional retailers with some 80% of retail firms reporting they had incurred growing management costs and decreasing gross margins.

The country’s largest foreign retailers, Walmart, Carrefour and Tesco all closed some of their respective branches.

Meanwhile, e-commerce companies continue their push into the frozen and fresh food sector.

An analyst pegs revenue generated from fresh foods reaching 40% on average for e-commerce companies, with seafood and frozen meat posting the highest revenue, followed by fruit.

A report stated that China’s e-commerce giant Alibaba said its sales for fresh produce surged 195% in 2013. Alibaba recently announced it would go public in the U.S., with analysts saying it could raise up to $15 billion. Alibaba has more than $150 billion worth of merchandise changing hands on its platforms each year, which is more than Amazon and eBay combined.

Read full report here.

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