5. Problems with grocery online shopping market in China

After analysing China's e-commerce market stituation and the comparison of UK's typical online grocery retailers and China's. In this post, I am going to talk about what the main problems on China's grocery online shopping market. 

Despite great achievement and the rapid growth of Chinese e-commerce market, even some Chinese e-commerce companies have strongly competitiveness in the world. Thus, Grocery online shopping market is still barriers in the China’s market. Even if you shop in the Alibaba.com, or JD.com, rarely find fresh food grocery market online. The Chinese ecommerce called the online food shopping market as the lasted ocean. Therefore, Chinese customer online food shopping activities not adopting in the Chinese e-commerce market yet. 

	Western	China
Customer individual	Better internet knowledge	Lack of internet knowledge
Customer Relationship	High level of loyalty	Lack of customer loyalty
Product counterfeit	Less	More
Delivery	Delivery on time	Lack of advanced logistics information system and services
Price value	Suitable	High delivery fee

Compare China’s online shopping market with western countries

We can clearly see what the difference of Online shopping between the UK and China through the above table. Obviously,first one is about value of price problem. The poor development of logistics leading to high price on product in China’s online shopping market. Due to China haven’t a series of advanced logistics system. The online retailer usually corporates with the third part logistic company to delivery product rather than implement own logistics Company. Therefore the online retailer only improve delivery fee to make up its high logistic cost. Therefore most of Chinese online retailers are not able to provide more discounts for products, especially fresh food categories which need high quality of delivery. As we known purchasing total price would be added delivery cost automatically by online payment system when you pay for orders online. However, scale of prices is very sensitive for customers, and Chinese customer always hope the online retailer could cover the delivery cost to attain the lowest price. Reibstein (2002) considers that in the context of online shopping, a low price may also attract price sensitive customers. So that if online total cost which includes high delivery cost which exceed much purchase. That means customers have less incentive to shop online.

Secondly, traffic issue is a serious problem in china.“China’s capital, Beijing, has been notorious for serious traffic congestion for so long that netizens call it “Shoudu” - capital of traffic jams.”(Hong, 2013). We could image that if just need one hour delivery time, but the deliverer take three hours on the road actually due to traffic jam. So that goods could not be delivered on time and might be affect the fresh food quality which depending on temperature and space. If deliverers can’t deliver products obeys delivery schedule on time which could decrease business reputation. Also Customer might feel unsatisfied and worry whether the long-time influencing quality of product and. Moreover, the customer probably don’t purchase online in the next time.

Thirdly, trust and loyalty and they are more important than two point above. The price fight is common phenomenon in china’s market. Some illegal online retailers want to attract more customers, they imitated product pictures from other famous companies or directly copy the famous company’s brand as their brand, but they use low materials which produced by low cost manufacturers to have lower price advantage. When the online buyers see similar or same pictures of products are sold with large price gap between the two companies. They prefer to go for the cheaper online retailer, but the high prices product produced by original manufacturers. This is also fraudulent business operation, they utilized e-commerce virtual environment to give customers counterfeit products. That will lose customer loyalty in the future. And that will have adverse influencing to Chinese online shopping market. 

Fourth, The individuals values and shopping intention  probably  also as important factors of influencing Chinese customers’ online food shopping intention and behaviours. As we can view from the right side picture, it demonstrates that the component of cultures. 

(The Component of Culture in Marketing)

In my opinion, for online grocery home shopping,values and attitydes, education, adoption of techology, social organization and politicak discourse are main facors. The reasons of Chinese online grocery market behind Western countries and U.S is that there is a huge gap between China's shopping behaviours and Western countries or U.S. Also the online shopping just was operated in China in 1998 by Jack Ma. Althrough the more and more Chinese have adjusted to shopping online, the definition of food e-commerce was accepted by Chinese with a short time. Thus most of Chinese especially old people or lower educational people might not adopt to shop food online, even online shopping. CNNIC’s consistently demonstrated （2014）that Chinese internet users are less involved in e-commerce activities such as online shopping and payment, compared to their use of the internet as a tool for entertainment, communication and information. For example, almost all of Chinese can use WeChat or Facebook to communicate and transfer information.Main reason is customer resources, for example lack of internet understanding and lack of online banking’s knowledge. Moreover, the increasing number of people who are able to use online resource (Computer-trained consumers) which is contributed to growth of online shopping. Li et al (1999) stats that consumers’ internet knowledge provides positive impaction for consumers’ online shopping intention and adoption.

And the next post, I will give some solutions and come up with some advices to face and deal with these cultures issues and problems as well. 

Reference：

• CNNIC, 2014, Statistical report on internet development in china. [Pdf] China internet network information center. Available at: [http://www1.cnnic.cn/IDR/ReportDownloads/201404/U020140417607531610855.pdf ] [Accesses 29^th February].

• Hong.Z, 2013, Beijing still struggling to deal with traffic congestion. [Online] Available at: [http://www.scmp.com/news/china/article/1298559/beijing-still-struggling-deal-traffic-congestion ] [Accesses 28th February].

• Li,H.,Kuo.C.,Russel, M.G., 1999, The Impact of Perceived Channel Utilities, Shopping Orientations, and Demographics on the Consumer's Online Buying Behavior. [Online] Available at:[http://onlinelibrary.wiley.com/doi/10.1111/j.1083-6101.1999.tb00336.x/full][Accessed 29^th February].

• Radovic.A, 2014, E-commerce in china: Alibaba is just the beginning. [Online] Available at: [http://www.clickz.com/clickz/column/2373776/e-commerce-in-china-alibaba-is-just-the-beginning] [Accesses  1st March].