Community group buying has brought Big Tech’s disruption to China’s smaller cities but are they ready for it?
- Community group buying is the latest big e-commerce trend to hit China, with consumers ordering fresh food via a few swipes on their mobile phone
- Business model has shaken traditional wholesalers though and prompted regulators to warn tech companies over how industry develops
Hundreds of vans swarm a huge warehouse on the outskirts of Nanchang, capital city of eastern Jiangxi province, in the early morning light.
An army of drivers in bright orange vests alight and load up their vehicles with the hundreds of boxes of vegetables, fruit, meat, and household items such as toilet rolls stacked inside, ready to be delivered to different residential communities scattered across the city of five million people.
“I have to rush since I have 150 orders and 500 items to deliver today, all before 11am” a driver in his mid-40s surnamed Deng, told the Post.
This busy sorting and distribution centre, which covers an area larger than a few soccer fields combined, is the beating heart of Chengxin Youxuan, a new shopping service called community group purchase launched by Didi Chuxing, in the city.
Just 20 kilometres north, at the city’s largest distribution hub of fresh produce, the scene is quite different.
“I‘m losing 10,000 yuan (US$1,550) per truck. Few customers come to me now,” said a vegetable wholesaler surnamed Xiong, sitting in front of his wagon piled high with lettuce.