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HomeeCommerce NewsChina e-commerce and delivery companies reaping benefits as businesses boom due to online shift

China e-commerce and delivery companies reaping benefits as businesses boom due to online shift

The ongoing COVID 19 pandemic has added to the Chinese e-commerce and food delivery giants as the digital format of doing business are gaining all-round growth. Most of the Chinese players have reported very strong earnings for their second quarter as the lockdown rules are still not relaxed completely and the fear of outdoor shopping and virus transmission still remains.

“Post COVID-19, the pace of digitization continues to accelerate and the shift from offline to online, in particular for individual shopping, is becoming a habit for consumers,” Jefferies said in a recent note discussing Alibaba’s June quarter earnings.

As figures indicate,  China’s biggest on-demand delivery services firm, Meituan Dianping reported a net profit of 2.2 billion yuan ($319.5 million), a more than 152% year-on-year rise. That compared with a loss of 1.58 billion yuan in the March quarter of 2020.

While operating profit for Meituan’s in-store, hotel, and travel segment declined 11.9% from last year, food delivery saw a more than 65% growth, as an increasing number of people ordered meals online to homes directly fearing contact transmission of the virus.  The company also said that the number of newly-onboard branded merchants increased by more than 110% on-year in the second quarter.

“The pandemic has accelerated the restaurants’ online migration, increasing the mix of high-quality merchants on our platform during the period,” Meituan said in a press release.

Alibaba, the Chinese MNC that offers C2C and B2C sales services via web portals as well as electronic payment services and cloud computing services also reported revenue of 153.75 billion yuan for the April to June quarter, which was a whopping  34% year-on-year rise. This growth rate was higher than the one recorded in the first quarter of the year. And like Meituan, Alibaba’s on-demand delivery service Ele.me, also gave rewarding numbers.

In its June quarter earnings released last week, Alibaba said “Ele.me food delivery GMV (gross merchandise value) growth turned positive in April and improved during the quarter as lockdown measures for the pandemic in China were lifted”.

Alibaba’s rival, JD.com  also posted strong earnings. The company said net income for the June quarter was 16.45 billion yuan ($2.32 billion), rising over 2,500% year-on-year.

CEO Richard Liu of JD.com said, “Since the COVID-19 outbreak, JD has steadfastly leveraged our distinctive supply chain and technology capabilities to contribute to society and ensure the steady supply and undisrupted delivery of daily necessities to consumers,”  in the company’s earnings statement earlier this month.

James Miller
Author: James Miller

I am passionate about technology and writing. I have 10+ years of experience in working with different digital media companies. If you have an interesting story, please feel free to send a mail to [email protected]

Author

I am passionate about technology and writing. I have 10+ years of experience in working with different digital media companies. If you have an interesting story, please feel free to send a mail to [email protected]