Shanghai's O2O sector surges

Companies offering online-to-offline services are seeing refreshing growth momentum in Shanghai, after the megacity rolled out its latest batch of measures to bolster industries that feature internet technologies.

E-commerce is poised to play a bigger role, not only in resuscitating consumption temporarily being hampered by the novel coronavirus outbreak, but also by turning the merger of O2O into the new normal, according to figures published by local authorities last month.

For example, Shanghai registered online retail transactions worth about 134 billion yuan ($19 billion) in the first quarter, a rise of 19.1 percent year-on-year, despite an overall slump in consumption during the height of the outbreak.

Dada Group, a Shanghai-headquartered on-demand delivery and retail company, saw sales rise 4.8 times in the city from Jan 27 to Feb 13, generally regarded as the peak contagion period in China. Among them, sales of meat-related products rose tenfold, while those of vegetables surged 7.7 times, compared with the same period last year.

Dada works in tandem with brick-and-mortar stores, helping them to market, sell and deliver products. To make O2O shopping the new normal, the company has teamed up with leading retail chains such as 7Fresh and G-Super to hand out coupons worth 20 million yuan in Shanghai.

"In addition to distributing vouchers, we managed to construct a smart logistics system leveraging big data and algorithms, so we can precisely match incumbent orders with the nearest available riders and shorten delivery times," Yang Jun, Dada's co-founder, said.

The company is also looking to introduce an omnichannel solution for supermarkets, through which an intelligent logistics system and a customized merchandise pickup mechanism will help physical retailers manage multichannel orders. According to Yang, such deployment can accelerate the entire delivery journey, with most items delivered in an hour.

Pinduoduo, a company based in Shanghai that bulksells quality items at affordable prices, has recorded growth of 60 percent since the middle of March.

The number of parcels handled via the platform surpassed 1.5 billion in March, accounting for roughly a quarter of all delivery parcels generated nationwide, according to the State Post Bureau.

The company has surfed the popular livestreaming trend, partnering with 100 mayors or county heads to promote their local produce through live sessions that effectively bridge the platform's 600 million users, said Chen Qiu, Pinduoduo's vice-president.

"We've been running massive online trade fairs since February, connecting sellers and buyers to expedite the business revival. We are likely to extend the practice in the post-epidemic period, making it a long-term practice," Chen said, adding that the company has waived commission and service fees to help companies regain a foothold.

Car services company Tuhu sees smart retail as the winning recipe to integrate online and offline resources in marketing and operations. It has teamed up with oil giant Royal Dutch Shell to unveil a QR code-based product-tracing system that gives consumers a holistic and transparent overview of their purchases.

"A number of procedures have been applied to tailor services to consumers' needs in light of the outbreak, such as free in-car disinfection, contactless car maintenance services via mobile apps, a system that allows car owners to check risk exposure levels in light of the outbreak, as well as subsidies worth 10 million yuan," Hu Xiaodong, Tuhu's co-founder and president, said.