Chinese supermarket operators tap online consumers, data to boost bricks-and-mortar stores

Chinese supermarket operators are increasingly using digital channels and data to boost their business.

“Our offline stores have been hit badly by online platforms, with shrinking foot traffic and plunging sales,” Peter Huang Ming-Tuan, chairman of RT-Mart China, a supermarket operator, told the 2019 Consumer Goods Forum, held in Hangzhou on Tuesday. If we stayed the same, it would lead to our demise, he added, while going online amounted to playing with fire.

The company decided to “court disaster, instead of waiting and doing nothing”, Huang said. RT-Mart rejigged its fresh food delivery business in March 2018 to adopt an omnichannel model championed by retailer Freshippo, earlier known as Hema, which is owned by South China Morning Post parent Alibaba Group Holding. And the gamble paid off – RT-Mart’s fresh food delivery business turned profitable in the first half of this year.

An individual RT-Mart store can now receive 800 online orders a day, up from 200 at the beginning of the year. Some stores in major cities such as Shanghai can receive up to 6,000 online orders a day. The supermarket’s customers can get their vegetables, meat and seafood delivered within a five kilometre radius within an hour.

Chinese home-grown supermarket operators are embracing digital channels to boost their revenue as well as to know their customers better. They are using big data to shed light on their spending behaviour.

“Now, whenever we bring in a new product, we can gauge the reaction immediately,” William Wang Tian, chairman and founder of the Shenzhen-listed grocer Bubugao (Better Life) Group, told the forum. The company now has data about who is buying and how it must present products to attract the most purchases. “It is much better than before, when we had no idea how a product became a bestseller,” he said.