Many may know and participate in the United States huge rush for online shopping after Thanksgiving, also known as Cyber Monday. However this ranks as the second largest e-commerce event in the world. In the recent years, an online shopping extravaganza has emerged for China. It began in the 1990s by college students who did not have a significant other. As a replacement for Valentines Day, young adults without partners began treating themselves to dinners and gifts. The concept of the date arose by November 11th or 11-11 which has 4 singles (for singles). It has now erupted into possibly the busiest online shopping day in the world.
The simple items have now evolved into jewelry, TVs, and even cars. The event has also spurred the need for different marketing techniques and price cuts. As the article mentioned, some retailers have promised discounts up to 70 percent off. The deals are very hard to resist and resemble many aspects of the United States’ Cyber Monday. Halfway through the day, approximately $1.6 billion in sales have been accumulated by means of the largest website for online shopping in China, tmall.com. This amount has surpassed the $1.25 billion that United States online retailers took in last year’s Cyber Monday according to the article’s source comScore, a research firm.
Companies have also had to begin planning and forecasting sales and delivery services months in advance. Alibaba, the largest Chinese operator of e-commerce, has requested additional lounge chairs and made reservations for rooms in nearby hotels for their employees to take much need breaks and relaxation. According to the article, more than 800,000 delivery personal will be working Sunday with the additional 75,000 hired seasonal workers. And one of the largest companies has even expanded their operating capacity by 50 percent.
Although the idea of a large shopping spree day online in China may be different from the United States, there are many similarities when it comes to the businesses and their preparation. Do you see a growing trend in online shopping in American or believe that making the trip to the store is necessary? In my opinion, I believe it matters in the nature of a product to either purchase it from a picture on the screen or physically taking the good off the shelf.
Article Source : http://finance.yahoo.com/news/singles-day-chinas-online-shopping-070856623.html
SAME DAY DELIVERY:
Walmart has been in competition with the large online retailer of Amazon for a few years now. This includes price competition, product availability, and other services to attract customers. In a new service called Walmart To-Go, customers may purchase a product available on Walmart’s website and chose to have this product shipped and delivered to their household in the same day for $10; as long as the following conditions are met:
- The product must be purchased online before noon
- Does not include shoes, apparel, or grocery items
- And is currently only available in a few select trial cities, Minneapolis, San Jose, San Francisco, and Northern Virginia
This compares to a similar service that Amazon provides; however, the select cities are different and it is only for a cost of $8.99 compared to Walmart’s $10. Walmart’s fee is firm, no matter the size or price of the product while Amazon has an extra $0.99 charge for each additional item. Amazon’s service also is effective only if the product is purchased within a window prior to noon. According to the retail strategist, Al Sambar, “it can be three to four times the cost for the retailers to pick items and pack them versus a distribution center.” However, Walmart can take the risk because the corporation currently has the free cash flow to experiment with this service. As a shipping service, Walmart will use United Parcel Service to deliver their products on the same day, as long as they are purchased before noon.
Along with the same day delivery service, the article also discusses that Walmart has been matching the prices of products in their stores with ones found on Amazon. And according to the corporate policy of Walmart, they do not match prices of competitors. However some stores may not uphold this policy consistently. This technique has been done under the table, and executives are in discussion to possibly changing this price competing policy in the near future, possibly closer to the holiday season.
So in the end, who has the competitive advantage providing a same day delivery service? Walmart has a network of thousands of stores to check availability of a certain product and has the free cash flow to experiment with such a service while Amazon “has years of customer data at its disposal.” Amazon is solely an online retailer and has revolutionized their logistics and website, while Walmart is making strong efforts to compete in e-commerce. How might Amazon respond to Walmart’s move to match their same day delivery service? With the up coming holiday season, how many will choose to utilize one of these services?
Wall Street Journal Article: