Tra­di­tional shops must boost their on­line links

Re­tail sec­tor be­ing in­creas­ingly driven by e-com­merce cus­tomers as bricks-and-mor­tar stores feel the heat amid chang­ing shop­ping habits

China Daily (USA) - - POLICY REVIEW - By ZHU WENQIAN zhuwen­qian@chi­nadaily.com.cn

The gov­ern­ment has is­sued a set of new poli­cies to urge tra­di­tional re­tail­ers to strengthen their links with e-com­merce sites, lo­gis­tics com­pa­nies, and fi­nance and telecom­mu­ni­ca­tions op­er­a­tors, as on­line shop­ping sites have be­come a grow­ing force in China’s re­tail sec­tor.

The State Coun­cil, China’s Cab­i­net, said e-com­merce op­er­a­tors and bricks-and-mor­tar shops could in­te­grate mar­ket re­sources and com­bine their ad­van­tages by cross share­hold­ing, merg­ers and ac­qui­si­tions and other forms of strate­gic co­op­er­a­tion, ac­cord­ing to the state­ment it re­leased on Nov 11, or Sin­gles’ Day, the coun­try’s big­gest shop­ping day of the year.

Tra­di­tional re­tail­ers should com­bine their ad­van­tages in ser­vices and ex­pe­ri­ences with on­line data and cir­cu­la­tion and ex­pand their in­tel­li­gent lay­out.

E-com­merce sites may con­di­tion­ally re­lease data re­sources to tra­di­tional re­tail­ers, to help them raise their re­sources al­lo­ca­tion ef­fi­cien­cies and im­prove their de­ci­sion-stan­dards.

“The new poli­cies were re­leased at a key mo­ment dur­ing the trans­for­ma­tion of the tra­di­tional re­tail in­dus­try, and they pro­vide de­tailed and clear guid­ance on the in­te­gra­tion of on­line and off­line stores,” said Zhao Ping, deputy di­rec­tor of the Chi­nese Acad­emy of In­ter­na­tional Trade and Eco­nomic Co­op­er­a­tion un­der the Min­istry of Com­merce.

“On­line shop­ping has been grow­ing rapidly, but the growth rate has slowed down year by year. This sig­nals that the sec­tor has en­tered a ma­ture growth pe­riod, and it cre­ates a growth space for tra­di­tional re­tail­ers.

“Bricks-and-mor­tar stores have been dis­cov­er­ing the meth­ods of on­line-to-off­line in­te­gra­tion. The poli­cies will help them to make new break­throughs and sub­stan­tial progress in the data ori­en­ta­tion of goods, stores, and cus­tomers.”

Chi­nese e-com­merce gi­ant Al­ibaba Group Hold­ing Ltd, which ini­ti­ated the Sin­gles’ Day shop­ping fes­ti­val in 2009, re­ported on-the­day sales of 120.7 bil­lion yuan ($17.7 bil­lion) by mid­night Fri­day.

As the turnover of e-com­merce com­pa­nies surged from 52 mil­lion yuan in 2009 to over 120 bil­lion yuan this year, tra­di­tional re­tail­ers are los­ing ground.

Be­cause of their low op­er­at­ing ef­fi­cien­cies, high op­er­a­tional costs, the change of con­sumers’ habits and the im­pact of e-com­merce, many Chi­nese and for­eign tra­di­tional re­tail­ers have posted heavy losses.

The UK home, food and cloth­ing store Marks & Spencer an­nounced last week that it will shut all of its 10 stores in the Chi­nese main­land. In fact, it has been un­able to ac­cli­ma­tize to the China main­land mar­ket since its launch eight years ago, and so far, not many Chi­nese con­sumers know about the brand.

The English re­tailer has con­tin­ued to record sales de­clines in its in­ter­na­tional busi­ness. It has de­cided to tem­po­rar­ily keep its on­line stores on Tmall.com and JD.com, two of the largest shop­ping web­sites in China, but con­sid­ers the rapid growth of ecom­merce in the Chi­nese main­land as the last straw.

In its state­ment, the gov­ern­ment said sell­ing coun­ter­feit and shoddy goods, in­tel­lec­tual prop­erty in­fringe­ment, un­fair com­pe­ti­tion, com­mer­cial fraud and other il­le­gal ac­tiv­i­ties will be se­verely pun­ished. The au­thor­i­ties will fo­cus on in­spect­ing cor­po­rate head­quar­ters and dis­tri­bu­tion cen­ters, it said.

The gov­ern­ment sug­gested that well-per­form­ing shop­ping malls ad­just their op­er­at­ing struc­tures, and trans­fer to a hub that com­bines func­tions of so­cial net­work­ing, and fam­ily, fash­ion, and cul­ture spend­ing.

Highly sat­u­rated de­part­ment stores with sim­i­lar func­tions should move out of the core busi­ness ar­eas of cities. Chain stores and brand-named en­ter­prises are en­cour­aged to estab­lish convenience stores and com­mu­nity su­per­mar­kets, and ex­pand their value-added ser­vices to cre­ate convenience for lo­cal res­i­dents, it said.

LI MIN / CHINA DAILY

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.