As retail continues to evolve, the hip Hong Kong pharmacy chain Watsons eliminates warehouse delivery
The Watsons pharmacy chain has become the first multinational brand to join Cainiao’s “ship from store” service, delivering items just two hours after the order was placed online. Rather than deal with warehouses, Cainiao’s initiative delivers products directly from the store closest to the consumer.
The service is available to users of Alibaba’s B2C commercial site, Tmall, who live within a three-mile radius of a Watsons location. Alibaba supporters can think of this as a compliment to the expedited delivery it offers via Hema Supermarket stores. Customers simply choose a point of origin and store staff collect the items that a courier then delivers.
In general, Chinese consumers expect to receive items ordered online within three days. But the merging of online and offline consumer experience, which is the driving force of retail innovation in the country, has caused a huge demand for instant distribution, said Cainiao president Wan Lin.
“The ways that technology has enabled commerce have accelerated a fundamental change in the logistics sector,” he said. “By connecting online with offline, couriers have now reduced the way we calculate delivery times from days to minutes.”
Watsons stores expect see a tenfold increase in orders in just ten months
Over 200 Watsons stores in Shanghai, Guangzhou, Shenzhen, Hangzhou, and Dongguan offer the service. The plan is to expand nationally to 3,000 Watsons branches in over 430 cities. Until now only department stores Intime (owned Alibaba) and the chain of packaged foods Zhou Hei Ya had collaborated with Cainiao to use the option of “delivery from the store” in China.
Cainiao launched the service in January as a way to improve consumer shopping experience while allowing retailers to effectively use their inventories for online and offline channels. The coverage now extends to 400 stores in 30 cities in China including Beijing, Xian, Suzhou, Dalian, and Kunming. Orders that use the service have increased tenfold in those three months, the company said.
Cainiao is planning an even greater growth in service. The company said that “ship from store” would soon go beyond consumer goods and food into the fashion and clothing sector.
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