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Neelima Mahajan-Bansal
Intrepid explorer. Currently focused on China, the world's laboratory.

China’s Hi-Tech Grocer

Yihaodian tested the idea of setting up a bunch of virtual supermarkets in select locations on Beijing and Shanghai’s subway network

Beijing’s subway is not for the faint-hearted. After 10 months in this city, I’ve finally mastered the art of travelling in its massive underground subway system without getting flustered.

Here’s how it works: During peak hours, a train rolls in (and mind you, there is never a delay), and it is already packed to the gills. The doors fling open, and the train spews out a surging mass of people. Another swarm, which has queued up patiently so far, rushes in at the first opportunity. And the last few stragglers gauge from outside that there is perhaps only a millimetre of space left; so they lunge their bodies inside with all the force they can muster, giving everyone a mighty push even as the subway door starts closing.

There are days when something gets caught within the doors, but most of the time, subway workers outside (easily recognisable due to their red armbands) manage to push an assortment of clothes, bags and limbs just in time.

Getting yourself in is half the battle won–surviving the journey in the packed compartment and then elbowing your way out is the other half. And thus it never fails to surprise me that several Beijingers in this filled-to-the-gills train are glued to their iPhones, iPads or cheap shanzhai rip-offs (feature-phones, by the way, are already pre-historic in this country) watching movies, playing games, reading e-books or surfing the internet.

When I change subway lines, I have to walk through a slow-moving mass of humanity for about 10 minutes. Even while walking, these people are glued to their phones and tablets, never minding where or what they step onto.

Beijingers in local trains are glued to their iPhones, iPads or cheap phones watching movies, playing games, reading e-books or surfing the internet. Image Courtesy: Getty Images

3G users in China recently breached the 200-million mark, making the internet even more ubiquitous. Here’s the interesting part: China took two years to reach the 100-million mark since 3G was introduced in 2009, and only one more year to double that.

Chinese e-commerce players are trying to make the most of this spurt. While e-commerce sales done through PCs still dominate, mobile commerce is on the upsurge. According to internet market research firm iResearch, mobile commerce in the second quarter of 2012, 4.3 percent of e-commerce purchases will be made on mobiles – up from a mere 1.1 percent at the same point last year.

Recently, I met Gang Yu, the chairman and co-founder of an upcoming e-commerce firm Yihaodian, which has grown by an astounding (and almost incredible) 19,218 percent over three years.

Yu, formerly a professor at the University of Texas, Austin’s McCombs School of Business, is bent upon finding new consumers in the Beijing and Shanghai subways. He might just be on to something. He is trying to monetise what marketers call the consumer’s “fragmented time” – their commute, for instance, when they have nothing much to do but stare at their phones.

“I see that people use their fragmented time – for example, they shop when they take buses, when they take the subway…they shop anywhere,” he told me in an interview. (The first part of the interview is here.)

Some time last year, Yihaodian tested this idea by setting up a bunch of virtual supermarkets in select locations on Beijing and Shanghai’s subway network. It was a smart idea from the word ‘go’ – most of the urban population in China is very tech-savvy and quick to latch on to things like this. It also cuts out your mandatory visit to the grocery store, which office-goers in a bustling metropolis like Beijing or Shanghai find hard to do anyway.

Yihaodian’s experiment has few parallels across the world (among the handful of companies that do something similar, Tesco has virtual supermarkets in Korea and the UK, and Woolworths operates such things in Australia).

Yihaodian’s virtual supermarkets display ‘stacks’ of goods pretty much like your neighbourhood Wal-Mart or Carrefour. The only difference is that the virtual supermarket has images of the product instead of the product itself. As you walk down the subway station you can review the supermarket ‘aisles’. All you have to do is scan the QR codes of the things you need on your smartphone and ‘check out’. The goods are delivered at your doorstep within 24 hours.

Yu means business here. He is planning to open 1,000 such outlets across China. Yihaodian is not the only one in this space, but is perhaps one of the most innovative.

Recently Wal-Mart, which has had its fair share of challenges in the Chinese market, picked up a 51 percent stake in the company clearly showing that the future of retail in China lies in e-commerce.

Other big e-commerce players like Taobao.com (owned by Alibaba) and 360buy.com have developed mobile terminals (Yihaodian also has its own mobile app called Palm Yihaodian).

Mobile commerce is just one area that is poised to boom. China’s e-commerce revolution is giving fertile ground to other innovations, such as social commerce. But that’s the subject of another post.

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Dear Neelima, I enjoyed reading your blog as it enabled me to compare the advance in the field of internet business since I last visited Beijing and Shanghai. Congratulations. Madanjeet
A nice blog. Looking forward to hearing more on this topic. Already learning more about China. Every time I go to China, I come back more impressed by the speed of innovation and changes there.
Dear Neelima Congratulations for starting this intiative. You have a good background about India and US. You now live in Beijing,so these real time updates are going to help all those who will follow these posts. Thanks Mehmood
Nice piece neelima. Gives one a lot of insights about an emerging global power and a transforming society.
Congratulations on your first blog! Your articles are always nice, informative, thought provoking, brief and crisp!
 
 
Neelima Mahajan-Bansal
A former Forbes India correspondent, I worked for nearly 10 years as a business journalist in India before heading to the Graduate School of Journalism at University of California, Berkeley, as a Visiting Scholar in 2010. It was a step towards getting a first-hand experience of the US economic and business climate, as well as a great opportunity to get an insight into Africa with a Bill and Melinda Gates Foundation-funded reporting project of my choosing in the continent.
Post-Berkeley, one thing led to another, and in early 2012, I found myself braving sub-zero temperatures in Beijing, exploring the nuances of China's evolving business and economic landscape as Editor of CKGSB Knowledge (http://knowledge.ckgsb.edu.cn/), the research publication of Cheung Kong Graduate School of Business.
China is an exciting place to be and despite my constant struggles with Mandarin and unfamiliar food, each day opens my eyes to something new. Some of the things I find fascinating are MNC strategy in China and the evolution of Chinese companies into global powerhouses. Interestingly, several Chinese companies that haven't ventured beyond the Mainland are, in many ways, spearheading innovation in ways we cannot imagine. Another interesting trend that I am witnessing firsthand is the evolution of 'Made in China'. This blog is about my experiences and discoveries in the world's second-largest economy.
Apart from China, I have an abiding interest in Africa, where I spent the early years of my childhood. More recently, I have researched and edited two books, one of which was on Africa: Culture of the Sepulchre by former diplomat and UNESCO Goodwill Ambassador Madanjeet Singh (Penguin India, 2012), and Leading with Conviction: The Nine Principles of Integrated Leadership by Shalom Saada Saar and Michael J. Hargrove (Jossey-Bass, forthcoming).
The views expressed in this blog are my own, and do not represent those of the organization I work for.
 
 
 
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Neelima Mahajan-Bansal's Activity Feed
December 17, 2012 22:32 pm by Madanjeet Singh
Dear Neelima, I enjoyed reading your blog as it enabled me to compare the advance in the field of internet business since I last visited Beijing and Shanghai. Congratulations. Madanjeet
December 14, 2012 18:08 pm by Ramesh Jain
A nice blog. Looking forward to hearing more on this topic. Already learning more about China. Every time I go to China, I come back more impressed by the speed of innovation and changes there.
December 13, 2012 10:19 am by Mehmood Khan
Dear Neelima Congratulations for starting this intiative. You have a good background about India and US. You now live in Beijing,so these real time updates are going to help all those who will follow these posts. Thanks Mehmood
December 11, 2012 13:00 pm by sriram
Nice piece neelima. Gives one a lot of insights about an emerging global power and a transforming society.
December 11, 2012 09:15 am by Ajay Sanghi
Congratulations on your first blog! Your articles are always nice, informative, thought provoking, brief and crisp!