Monday, June 15, 2015

CHINA E-COMMERCE AND RICKSHAWS

This is a more creative delivery option than many corporations are using in the US and Europe.
 

Buy it online, have it delivered by rickshaw

MASAHIRO OKOSHI, Nikkei staff writer
BEIJING -- Demand for door-to-door delivery services has been swelling in China as more Chinese shop online. So much is being bought via the Internet that a new industry, built around the humble rickshaw, has emerged. Well, at least around the electric tricycle.
Motorized scooters have been fixtures of Chinese cityscapes since the 2000s, when they became popular due to their environmental friendliness and ability to beat traffic jams. Nearly soundless electric bikes coming up from behind often frighten newbies to China's metropolises.
A new type of electric scooter, motorized tricycles with large luggage carts in the rear, has been making its presence felt over the past several years. In Beijing, the things are seen everywhere, on main thoroughfares in central business districts to narrow streets in outer boroughs. Their growing presence is a clear sign that online shopping has taken hold in China.
Booming business
Even Premier Li Keqiang shops online. In March, he said he had recently bought some books over the Internet.
Some surveys show that around 2.8 trillion yuan ($451 billion) worth of goods and services were bought online in China in 2014. The amount is about 3.6 times what it was three years earlier. For perspective, Japan's online shopping market was worth about $88.4 billion in 2013.
Chinese door-to-door parcel delivery businesses, which charge around 10 yuan per package, have been handling 50% more parcels than a year ago. Saying roughly 14 billion parcels were delivered last year, the Chinese news media has been reporting that China has zoomed past the U.S. to become the world's biggest market for parcel delivery services.
Not on the farm anymore
China's door-to-door parcel delivery industry is dominated by private-sector businesses, whose aggregate market share reaches 85%. This new industry also has become a major source of jobs for workers -- especially young men -- who leave farming villages and come to cities in search of employment.
"I still don't know Beijing streets well," a parcel delivery driver said over the phone. "Which way should I go?" The Nikkei Asian Review had phoned him by dialing the contact number provided by his company. It was well past the assigned delivery time, and we had not received our parcel.
The delivery man was in his late 20s and from Henan Province. When asked about the delay, he described a grueling job. He said he starts early in the morning and delivers more than 100 parcels day after day. His words were thick with a regional accent.
These delivery workers typically earn between 4,000 yuan and 5,000 yuan a month. This is a good wage in urban China, about the same pay university graduates get right out of school.
There are rumors of some desperate would-be delivery workers forking out several thousand yuan and buying electric scooters to get delivery jobs.
What is known is that the industry has become a major employer of young workers from farm villages. It has filled a void left by China's real estate slump and the resultant lack of construction work.
Opportunities, challenges
People's dissatisfaction toward brick-and-mortar retailers has been behind the dramatic growth of online shopping in China. Helped by the rise of the smartphone, a growing number of Chinese are buying virtually everything online, except perishables and a handful of other items.
But China's online marketplace has the same pitfalls as conventional retailers. Counterfeit merchandise is often peddled. Quality control can be poor. And delivery channels are oftentimes clogged. China's e-tailers must solve these problems to prevent consumers from turning to overseas Internet shops. If they are successful, they will likely spawn new businesses, just like they did with the electric rickshaw delivery system.