E-commerce eroding traditional supermarket business in China

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


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.