Coronavirus outbreak drives demand for China’s online grocers as tens of millions of consumers hunker down at home

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Millions of consumers shunning supermarkets and meal-delivery services are testing promises by Tencent-backed Missfresh or Alibaba’s nationwide Hema chain to ship fresh food to their doorsteps

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A food delivery man, wearing a face mask, in Beijing on January 31, 2020. Photo: Agence France-Presse

Bloomberg

Published: 12:03pm, 11 Feb 2020Updated: 1:45pm, 13 Feb 2020

Like their counterparts in Silicon Valley, China’s largest tech companies struggled to prove online groceries can be a viable business. Then the novel coronavirus struck.

Its spread has extended a lifeline to a slew of money-burning businesses – many backed by big name venture capital funds and tech giants from Alibaba Group Holding to Tencent Holdings – that in some cases were on the brink of collapse in 2019.

Millions of consumers shunning supermarkets and meal-delivery services are testing promises by Tencent-backed Missfresh or Alibaba’s nationwide Hema chain to ship fresh food to their doorsteps. Those that deliver can expect many of first-time customers to stay even after the epidemic burns itself out.

The boom is one more way in which the abrupt onset of the epidemic is transforming consumer behaviour in the world’s No. 2 economy. Usage of other online services from mobile gaming to internet malls is surging as the epidemic confines millions to their homes.

“Before the Lunar New Year, many of these firms were looking precarious and their only lifeline was the deep pockets of their big backers,” said Michael Norris, research and strategy manager at Shanghai-based consultancy AgencyChina. “Right now, fresh grocery delivery platforms are seen as an essential for consumers to minimise risk of infection.”