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Retail revolution grips Chongqing

Updated: 2016-04-26

By Li Tao in Chongqing, HK Edition

Retail revolution grips Chongqing

Goods on sale stacked up in Eurocoo - a shop at Chongqing's Global E&B Shopping Experience Center specialized in selling European products. Comparatively low prices are among the key factors that have lured consumers to the mall. Li Tao / China Daily

Zhang Yan claims to be a veteran online shopper for overseas goods.

The 30-year-old office clerk sometimes purchases goods on foreign websites and gets them transshipped home through a third-party logistics firm. She also uses Chinese online marketplaces like Taobao and JD.com, which have stepped into the global online purchase business for consumers like Zhang. But recently, the Chongqing local found a third option that's even superior to the old mode in various aspects.

"Sometimes, it's like taking a gamble before I open the boxes mailed to me from abroad as I've never seen their physical condition at all. And, it's basically impossible to return them even if I'm not satisfied as it'll be a very costly and time-consuming process," Zhang told China Daily in Chongqing. "But it won't be an issue now as I can see them first and place orders later."

Zhang was referring to a Chongqing-based overseas goods retail network which conducts both online and offline retail businesses.

Founded last year, Global E&B's two core businesses - Global E&B Shopping Experience Center, and Global E&B Online Shopping Mall - have brought a brand new shopping experience to Chongqing consumers. The former - a shopping mall in the city - provides a variety of popular goods on site for sale, while the latter allows consumers to place orders online for various products sold overseas.

Yang Zhicheng, Global E&B's operating officer, said this innovative retail mode has effectively lowered costs before a consumer makes payment as in a traditional trading model. The price tag of an overseas product normally includes the charges from a foreign merchant, a Chinese importer, a Chinese distributor as well as a Chinese dealer, apart from the costs collected by the foreign factory or brand.

"Products sold here are cheaper. The latest iPhone model, which costs 5,288 yuan ($814) per set at an Apple store, is sold for only 4,788 yuan here. We offer a discount of 500 yuan and consumers still get a one-year official warranty," Yang told a delegation of Hong Kong and Macao reporters in Chongqing.

Retail revolution grips Chongqing

The retail network currently supplies more than 50,000 types of goods from overseas markets, including fresh and frozen seafood, healthcare items, maternal and children's products, cosmetics, clothes, wine and digital products - goods that Chinese consumers normally purchase on overseas online websites and at physical stores.

Imported baby formula, wines, cosmetics and snacks are among the most common products sold at the mall, while a number of renowned brands like COFCO and AjiIchiban, have joined the network by providing products both at the retail mall and on the online platform.

Global E&B's latest modus operandi has drawn immense interest from Chongqing consumers, with 35,000 people having registered as members within the first three days of its launch. According to the company, more than half of them tend to return to make further purchases.

Last month alone, Global E&B's online transactions exceeded 18 million yuan, while its offline sales reached 35 million yuan, said Yang. The company is now looking for more business partners in Denmark and Italy to enrich its products like infant foods and clothing brands, he added.

Chongqing's thriving e-commerce landscape is also backed by the city's advanced logistics-related infrastructure development. Apart from the enormous air transportation growth, boosted by new international air routes launched over the years, international rail lines linking central and western China with Europe have greatly enhanced connectivity and trade in the region.

Starting in Chongqing, the 11,179-kilometer Chongqing-Xinjiang-Europe International Railway passes through Xi'an, Lanzhou, Urumqi and the Alataw Pass before making its way into Kazakhstan to link up with a cluster of European economies, including Russia, Belarus and Poland, and terminating in Duisburg, Germany.

The new route takes only 13 to 16 days on average to transport goods from China to Germany - less than half the time needed for container ship transport in Eastern Chinese ports. Railway transportation costs are also lower - just one-fifth that of transporting cargo by air, according to an earlier China Daily report.

The rail link's operational capability has also improved since 2011 when it first went into operation, whittling down the cost of transporting goods on the line from 80 cents per 22 metric tons of cargo for every kilometer to 70 cents at present.

Yang admits that Global E&B benefits greatly from Chongqing's well-developed logistics systems. Bulky goods, such as beer kegs, are transported through the Chongqing-Xinjiang-Europe International Railway as the fares are lower, while the time-lapse is reasonable. As intermediary procedures in the trade have been greatly reduced and freight rates are competitive, the retail prices of goods on both Global E&B's online and offline platforms appeal to consumers.

Zhang Yan, however, is not giving top marks to Global E&B for everything. While recognizing that the company's prices are generally favorable, she said the platform is still undersized to provide everything she needs. The remote location of its shopping mall is also problematic, making her less motivated to visit it regularly, she lamented.

After making a firm foothold in Chongqing, Global E&B says it will establish a wider distribution system and expand its presence through franchising, and take on the municipality's peripheral districts, such as Wanzhou, Fuling and Yongchuan.

litao@chinadailyhk.com

Retail revolution grips Chongqing

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