Shops unite to fight back against e-commerce tide

Online shopping sites may have become the growing force in China's retail sector－but during this year's Nov 11 Singles' Day shopping festival, many rival bricks-and-mortar companies are uniting to offer big price cuts to fight back.

November was previously considered a quiet month for traditional retailers. However, the advent of the country's biggest annual shopping day now sees many companies shaping their entire year toward the 24-hour sales festival.

This year, traditional retailers such as Beijing Wangfujing Department Store Group Co Ltd, Yintai Retail (Group) Co, and the RT-MART supermarket, said they are joining hands with hundreds of smaller players by introducing large-scale nationwide discounts.

"This clearly indicates just how traditional retailers have started to respond to competition from e-commerce retailers," said Zhu Zhenjia, deputy editor of Linkshop, a leading Chinese retailing information provider.

"Bricks-and-mortar stores are trying to focus on the core of retail and better read consumer demand. As a result, they are able to sell highly cost-effective products that consumers truly need."

Linkshop itself is acting as a host during this year's event, for top brands, retail distributers and banks, to highlight deep discounts on offer to shoppers.

Shop owners are also claiming that compared with online merchants they are better at guaranteeing the authenticity of the products on their shelves.

Some retail stores are also expected to distribute shopping coupons and hongbao (red envelopes stuffed with money), in the hope of sparking demand.

Actual brand names do not usually get involved in sales promotions－but shop owners said they too are offering discounts on many items during Nov 11, many of which will be on top foreign labels.

Wang Lin, a senior analyst with domestic research company Analysys International, said this united approach by bricks-and-mortar outlets shows great confidence and will make them more appealing to consumers in what has become an increasingly congested retail marketplace.

During last year's Nov 11 event, a few stores offered joint promotions, said Wang, and then witnessed remarkable growth in customers, with some doubling their revenues within the 24 hours.

"This year, retail stores are making great efforts to combat online merchants, and this unified effort will improve their performance," said Wang.

"This shopping festival is a bit like a gimmick－but it certainly has its practical significance. Uniting with each other will help retail stores fight back."