China’s top express delivery service SF Express has stirred up the e-commerce market by setting up a chain of stores, where customers can place online orders or pick up the items they purchase online
June 9, 2014 Leave a comment
SF Express chain stores stir up China’s e-commerce market
Li Tao-cheng and Staff Reporter
2014-06-03
China’s top express delivery service SF Express has stirred up the e-commerce market by setting up a chain of stores, where customers can place online orders or pick up the items they purchase online.
Following the launch of its first Heike store in May, the chain has already opened a total of 18 outlets in Shanghai, with a target to increase the number to 400 by the end of this year.
There are no items on shelves for immediate purchase, but customers can make online purchases through terminals in the Heike store, try samples displayed in the store, and pick up the goods they order online.
The Heike stores also have ATMs, offer bookings for transportation tickets, accept payments on utility bills, provide dry-cleaning services, and allow vendors to drop off their goods to be delivered. The chain will also provide post-sales services after SF Express launched its own online shopping site in August.
These new ventures adopting the online-to-offline business model are part of the company’s efforts to compete with its rivals, who have benefited from their partnership with Chinese e-commerce giant Alibaba, according to industry insiders.
Despite its dominance in the delivery sector, and its two decade-year history, SF Express controls less than a 10% share in the e-commerce market.
Guo Zengli, director at the Mall China Information Center, said SF Express has the advantage of having its network, services and the use of technology as a logistics service provider, and the Heike chain would allow the company more contact with customers.
However, industry insiders stated that SF Express did not have the experience of operating physical stores, and the business of chains like Heike are still in the early stages and may generate losses for quite some time.
Chen Rung-cyuan, COO of Taiwan’s HCT Logistics, said SF Express has the scale, but it is too early to say if the Chinese company could challenge the dominance of players in the e-commerce business.
Existing companies, including Jingdong Mall (JD.com), and Alibaba’s Taobao and Tmall, have an edge because of their large client base built over a long period of time, insiders added.
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