Chinese ecommerce business outperforms supermarkets

Thursday 20 March 2014 13:44 CET | News

The Chinese ecommerce business has stepped into the traditional supermarkets’ business and, as such, the latter’s annual gross margins have recorded declines, according to the Beijing Youth Daily.

No less than 80% of the brick-and-mortar retailers reported that they had incurred growing management costs and decreasing gross margins according to the semi-annual financial reports of public retail firms for 2013.

Foreign investments in supermarkets in the Chinese market have been in a crisis since 2012. Moreover, players like Walmart, Carrefour and Tesco slowed down expansion in the mainland market by 27% in 2013, with all of them closing some of their respective branches. Walmart shut down 5, Carrefour 2, and Tesco 5.

Refrigerated and frozen foods are expected to increase sales of traditional supermarkets and keep customers interested because of their high gross margin. Frozen products are also more strenuous and costly to keep chilled during shipping.

Beijing-based Wumart Stores mentioned that sales of its refrigerated and frozen products registered a two-digit percentage growth in 2013. In addition, a Walmart executive pointed out that the retailer has established new distribution centers to attract new customers.

However, the ecommerce companies are getting more interested in the frozen and fresh food sector. As a reflection of this trend, sales for fresh produce climbed by 195% in 2013, with fruit, seafood and vegetables posting the largest increase.

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Keywords: China, ecommerce, supermarkets, annual gross margin, retailers
Categories: Payments & Commerce
Countries: World
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