Tech giants like Alibaba are helping many small businesses get skin in the e-commerce game.
A subtle but critical change is taking place in the urban food space: the digital transformation of small, independent, family-run businesses (aka mom-and-pop shops). New real-estate projects such as shopping malls and office towers may dominate Main Street today, but mom-and-pop shops remain a steadfast presence on the side streets of China’s cities, giving shoppers a quick and convenient way to purchase fresh produce and packaged food.
Moreover, thanks to internet tech giants in general — and competition in the e-commerce market in particular — these shops are thriving. Chinese tech rivals Alibaba and JD are recruiting these small businesses and providing them with software, supply-chain solutions and new monetization models. In return, the e-commerce giants get access to physical spaces, which they can add to their network of point-of-sale locations and food-delivery hubs.
At first glance, mom-and-pop shops all look the same on the surface. In fact, they’re being stocked by centralized Alibaba or JD hubs in response to real-time fluctuations in demand, thus minimizing cost and waste. These shops may even be equipped with low-cost sensors to track foot traffic. And hyper-local data insights from the neighborhood can be used by the shop owner to curate a high-exposure snack shelf.
This “digitization-in-a-box” strategy is making small businesses “artificially intelligent” at a stroke, creating a potential platform for curated and personalized food retail environments, as well as a less wasteful stock and fulfillment process. For consumers, the gap between digital and physical shopping experiences is further collapsed.
This is a 12-part series on Food Megacity: how urbanization and technology are changing the way China eats. The full series can be found here.