Discussion keeps the world turning.
This is Roundtable. Hello everybody, welcome to Roundtable.
Coming to you live from Beijing, I'm Hayoung.
Good to have you join us.
On a day's show, in China, instant delivery means just that, instant.
With multiple e-commerce giants now competing to deliver goods in record time, let's examine the innovations and strategies driving delivery at lightning speed and explore how this trend is reshaping the retail landscape.
And beat the heat right that wave, we spotlight the latest indoor star sport, indoor surfing.
The site of surfers catching waves next to shopping centers is becoming increasingly common in China.
As this trend grows, we can't help but wander.
What other outdoor sports might we see moving indoors next?
For today's program, I'm joined by Yushun and Brandon Yates in the studio.
First on a day's show. In the world of e-commerce, speed is king.
While Amazon primes one day shipping set the standard in the US, Chinese platforms are pushing the boundaries even further.
Instant delivery services are becoming the new norm in China's fiercely competitive online marketplace.
With companies promising deliveries within an hour or even less in this race against time, every second counts.
Leading the charge is May 1.
A food delivery giant that has recently launched a pilot program for instant delivery within a limited range, aiming for a remarkable 15 minute delivery time.
Perhaps more surprisingly, Do-Yin, the Chinese version of TikTok, is also throwing its hat into the instant retail ring, inviting vendors to test instant delivery operations.
These bold moves raise increasingly intriguing questions.
What's driving this push for lightning fast deliveries and how can these companies ensure rapid service without compromising quality or sustainability?
While instant delivery in China, while speed literally means instantly, isn't necessarily new.
What's new is that multiple players in the online retail space are jumping on this bandwagon simultaneously.
You shouldn't set this stage for us and tell us what is happening.
What we can see is that recently many domestic e-commerce platforms have introduced their instant delivery services.
As an example, the domestic food delivery platform is testing their service in some areas, embaging that aims to deliver food within 15 minutes of ordering.
But it is now only available during its trial period, which is during 11 a.m.
to 1 p.m. during weekdays.
And doing the short video platform is also testing an instant retail service for selected vendors by sending invitations.
Also, e-commerce platforms such as JD.com and Talbow have updated their instant delivery services, making them more prominent on their home pages of their apps.
And these developments are all, I think, highlighting the growing trend and competition in the fast-paced, on-demand delivery marketing China.
And we can obviously see the ambitions of these platforms, especially their aim to deliver to users within 15 minutes.
It's such a short time, but I think there must be many compromises involved.
First of all, delivery writers, they have to raise against time even more.
And also think about when you are dining at restaurant 15 minutes, the food might not even ready yet.
So in this case, achieving the preparation, pick up, and delivery within 15 minutes, it means that the food needs to be prepared before you even ordered it.
So, you know, a lot of people say they hate pre-cooked food.
But in this case, I think you cannot require or request a freshly cooked meal.
They got to be pre-cooked.
These goals wouldn't be able to be achieved without compromise, right?
So I think that's the point that you're making there is that at some point, there is going to be a lot of compromise between whether it's pre-made meals or, you know, bike riders taking risks and racing against time.
So there is going to have to be some sort of compromise that's going to need to be made in order to facilitate this, you know, seemingly impossible goal.
Right. And we're seeing that, well, with these two prominent examples that you shouldn't have highlighted for us here, they are no strangers to this game.
And they've been quietly investing and refining their operations to speed it further up.
And also, I just like to highlight one small difference of these two platforms.
One is primarily known for delivering food.
So you kind of expect the delivery time to be rather quickly because you want your food to be still hot when you receive it.
And the other do we in it is, you know, the Chinese version of Tik Tok is a short video platform, live streaming platform, but it's selling goods and it's known for it now.
But that's a good question though, because you said people expect their food to be delivered and it for it to still be hot.
So does the 15 minutes include preparation time or is it is just the delivery?
Okay, so the 15 minutes only starts once the food is ready and then they've got 15 minutes only starts when you place the order.
Right. So that includes preparation time and delivery.
That's madness. So you should you make the good point that you got to cut corners then where are these corners being cut?
Actually, even as a bike rider, they're going to have to start cutting corners and taking chances.
That is unfortunate because we know that on the road, you don't really want to be, you don't want to encounter a super rushed delivery person.
I think that was also one of my first, yeah, I think that was one of my biggest first culture shocks when I arrived in China was that, you know, when you're walking around, these bikes are constantly going around and, you know, driving at crazy speeds and, you know, cutting corners to try and make their delivery times, but also their electric.
So, you know, coming from South Africa where we don't have a lot of electric bikes, you don't hear them.
So you have to be very aware as a pedestrian that a bike could be zooming past you or from behind you.
So that's probably going to get even more intense now.
Yeah, and just think about that if this person is on the clock on this ride and then while we've all been there when you are struggling to meet the deadline to turn a paper in or to get ready for this show live and then that guys doing that multiple times maybe 30 times a day and then what does that do to one's behavior that we can talk about in a second, but here it's interesting.
Let's just dive a little bit deeper into the business model or the business operations as how are these ecommerce giants, whether they're delivering food or delivering other kind of retail goods.
How are they making this happen?
So, first of all, we can see that they are investing a lot of innovative approaches to meet the growing demand for instant retail.
For example, Maytwan has integrated drone technology into this operation, offering 15 minute delivery in selected areas of in Shenzhen and Shanghai.
And according to Maytwan's data by leveraging these drones, Maytwan has significantly increased efficiency and boasting an average delivery time of just 12 minutes, which is nearly 150% more efficient than traditional delivery methods.
And reduces the danger element by avoiding road delivery.
Yes, low altitude economy, I think that is also what we've been talked a lot.
And it also saves users nearly 30,000 hours of waiting time and have completed over 167,000 orders by May 2023.
And there are also short video platforms like Doing is that they combine live streaming with retail.
It features actually instant retail on its shopping mall page and supports a variety of vendors, including offline stores.
And in this way, it can place orders while watching the live streams.
It sounds a bit like TV shopping, but it makes the process even faster because basically you are seeing the product and then maybe one hour or have an hour you can get that product.
And here's another question or here's actually another endeavor that let's say platforms such as Doing will need to invest in where they have invested in that is with the existing e-commerce platforms such as Maytwan.
It already has a fleet of delivery workers on their bikes.
So it's a pretty mature model.
You get the order and then you know, race off to the restaurant to get the food and then deliver to your doorstep for the person to enjoy.
But with Doing, it doesn't necessarily sell like hot meals all the time.
A lot of the goods that selling is like clothing, makeup and all kinds of stuff.
And then it doesn't have this readily available standing army of delivery people.
So it has to cooperate with other relevant parties or you know, to facilitate this service.
And it's really, this is not anything new anymore.
You know, Doing has been selling goods for years and then this is a primary battlefield for retail in China now.
But what's new here is that it's already it's also joining in this instant retail sort of like a new battleground to get more customers or whatnot.
Yeah, do you do still have some questions about, you know, how this is made possible?
Because for me when I first saw this in the news, I was astounded by how can this be may be facilitated in an hour or in 15 minutes.
What do you think maybe are the things that really stand out for this to happen because we know in China China speed is whizzing off, but this is pushing it even further.
I think competition drives innovation.
So I think that's the biggest issue.
Well, not issue here. That's the biggest, you know, point to be aware of is that these companies are trying to increase delivery times and you know, maintain their customer base.
If not grow it because there is so much competition amongst all of these companies, you know, and they're all competing for one of the biggest, if not the biggest market in the world in terms of, you know, the Chinese consumers.
So I think that is what is facilitating these goals.
But in terms of what they can do to achieve these goals on a regular basis, i.e.
delivering food within 15 minutes of placing an order, that's going to be linked to innovation.
So they do to facilitate that innovation is going to be remarkable to see.
I mean, we've seen what they're doing now.
They're implementing drones and you know, they're trying a variety of methods.
But I think when we look at this, maybe five years or 10 years from now, what they are going to have to figure out to do this consistently is going to be very interesting.
Of course, and technically they are setting up these kind of trial into a designated area and designated time.
And then you need to place the order in the restaurant that also have the collaboration with the platform.
These basically restaurants have the demand or they know that what kind of dishes are, you know, customer like the most.
And then they may prepare more a little bit, then you even place it the order.
And also they need a huge collaboration between the restaurants and the platforms because they need to understand, you know, what kind of time most customers may place the order.
And as long as they place the order, they need to be the first one to respond to, you know, prepare everything and let the driver to come to the restaurant.
Like beyond, that's a great point beyond innovation.
I think in order to facilitate these goals, it really does require all parties to be involved.
So collaboration between the delivery service and the restaurant or the retailer, whoever it is, that collaboration has to happen for these things to be possible.
Right. And also, well, that's the restaurants, the eatery business and for the general retail business, which is also pushing for instant delivery.
Then in theory, I, I suppose speeding it up is not as difficult as maybe the restaurant business because I feel that, you know, there aren't many corners left to be cut in that area.
But with retailing, let's say, I just place the order to buy a pair of shoes.
And then if there's efficient AI that can do a little bit of forecasting that can also, let's say, detect maybe, you know, what's the new viral item and then sort of place it closer to the front of the whole slew of products that are going to be shipped out of the warehouse.
And then you have an efficient automatic sorting system to get this product to the packaging conveyor belt.
And then you have the very efficient people to do the packaging and then whisk it off to the delivery person.
I think all of all of all of logistics is challenging.
But all of that, I think can be done in advance.
I think with the retail sector, their biggest issue might be supply and demand.
So they might all of a sudden have a product that becomes ridiculously popular for whatever reason because it's very difficult, I know AI can help, but it's very difficult to predict trends.
You know, if you look at the course of history, there's been so many random items in the clothing industry and beyond that have become insanely popular for a variety of reasons.
So I think that to maintain some of these promises, for example, you know, like the 15 minute delivery promise, I think that supply and demand is going to be the issue because if they run out of stock, for example, then, you know, those promises can't be delivered and that can potentially cost some of these companies a lot of money.
And also, isn't it a key to have your warehouse nearby to the potential customers?
So you have, if you have, let's say, warehouses in every major district in Beijing, for example, then it makes it possible to deliver stuff really fast.
But if your warehouse is in Shanghai or nearby Shanghai, then of course it's going to take more than a day.
So they also have to spend more money to keep up with this demand because if they want to build more warehouses and increase the availability of their product and, you know, the, and decrease the distance between their businesses and their customers, they're going to have to spend money to ultimately keep ahead of the competition.
So mostly actually when you're placing the order, you're actually placing the order from mostly the convenience stores or department stores or just shopping malls near you.
And that's why they can just send drivers to the place and then, you know, deliver it so quickly.
And another thing I was thinking about, you know, the, you know, competition that we were mentioning.
A lot of these platforms, they trying to stand out from all of their rivals because, you know, you must differentiate yourself or show your, some of your, no, your advantages.
Yeah, so you need an excellent point.
Yes. To be ultra fast. In this way, you can actually, I think create a new position in this market because back then we talked about it, we choose different platforms to buy different products like electronics.
One, one, one platform and make up on another one.
So in this way, they are trying to build up a image that, okay, this platform offers the fastest service.
And then in this way, they maybe can stand out from all of these.
We already, yes, that's a very good point.
And we already have a leading company in that sphere, which has been mentioned already.
But then you've got all these other juggernauts in e-commerce.
They're all playing catch up and they're doing pretty well by the amount of resources they've thrown into this game.
I wonder though, Brandon, if, as an, you know, international, as an expat when you look at this, yes, do you feel that, you know, do you have this question like, are Chinese people just way too obsessed with this?
No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no you do have companies in place that can keep up with that demand and are battling to keep up with that demand and you've got so many companies that are trying to become number one in a certain sphere, whether it be like you said number one in makeup number one in retail number one in service delivery speed of delivery.
So that competition makes it easier for the Chinese market to demand more of those companies because there is so much competition they can you know determine which outlet ultimately they end up using.
So I think that competition to get a grab of the Chinese market has benefited Chinese customers because that competition has increased things like delivery time quality, etc.
So look, there's no need to get things in 15 minutes, but because of the competition that's being created, they can as Chinese consumers demand that.
And also I that actually reminded me of a sentence in the past.
The smartphone industry a lot of consumers will say I may not need this function or this feature, but you cannot not have it.
So it's kind of you know you need to offer this kind of service to prove that you have that and you know, though many people have got used to you know these food delivery in 30 to 60 minutes, there are still users with maybe urgent needs right.
And of course in this you know fast paced society, I believe that current speed of food delivery is already quite fast, but we cannot you know rule out that some people may have even higher demands.
And although I would like to say you know just give yourself some time, but I cannot deny that there are times when those extra 15 minutes really matter maybe that's there are some people just need that 15.
Let's just say that you know for different categories of goods than the delivery time could be different.
For example, if you are suffering from emergency and illness, and then you're waiting for medicine to be delivered to you and then you would like that to appear on your doorstep ASAP.
But let's say if you bought a pair of shoes, a jacket, this thing is a durable good it won't go bad very quickly.
And then if it takes longer, I don't really see why.
Well, I just don't see the urgency, but for you know certain goods, especially like food or emergency equipment as such, then yeah the faster the better.
I don't know if it's the consumer that's actually pushing this increased delivery time and that sort of thing, I think that because there is so much competition amongst these companies, let's say there's a company that can offer delivery in 20 minutes, but another one can offer it in 15 consumers are automatically going to go to the company that can offer it in 15.
So it's actually the in my opinion, the competition amongst the delivery services that's, you know, creating this this rush.
Demand from Chinese consumers, but I don't think it's the consumers that are actually demanding it.
I think it's the competition amongst the companies that's driving this constant need to improve.
Then what about the unnecessary corners that have been cut or what about the you know issues that arise from this because for it to be so fast, we have touched upon, you know, there are some things that you simply just don't have time to do.
There might be legislation required to kind of maybe rain in some of the competition amongst some of these delivery companies because in 10 years time we might be expecting food to be delivered in two minutes, you know, who knows what kind of mayhem that can cause.
So maybe there needs to be some sort of legislation in place to maybe slow down or you know kind of decrease the competition amongst some of these delivery companies in terms of protecting safety, particularly on the roads.
Yeah, what do you think should be maybe the guardrails in place or what do you think are, you know, the potential issues that we're running into here.
First of all is the item may be limited because of the fast speed in terms of these food delivery thing you cannot have too many choices because there are there need to be these restaurants that you know they they have these kind of pre cooked meals or let's say if you are ordering porridge and they are freshly cooked porridge you cannot require it or you cannot cook it within 15 minutes and deliver it.
So there may be some shortage in.
Right. And also one thing we haven't really talked about that is the fee at the moment this is sort of an introductory offer that the platforms are giving out free vouchers and encouraging people to use the service.
But in the long run we all know with rising labor costs this is not sustainable so they're going to start charging you and then you know whether it's an expensive amount or is it an acceptable amount then I suppose different people will view it differently.
But maybe that's sort of the capitalist mechanism that will sort of counter some of the problems you might also regulate that because you'll find people will start going for something that's really fast but also more affordable.
So that that competition in terms of a price point in terms of the fast delivery that also might be you know counteracted by the companies in an age of instant gratification we've created a world where packages arrive in minutes.
But at what unseen cost as we click by now let's pause to consider the intricate web of human lives touched by our choices the true measure of a society in my opinion isn't just in its speed but in how it values every person in the chain from warehouse to doorstep because we know these days that AI has been utilized in such a wide range of activities.
And then we sometimes forget that there are still a lot of human beings who are in this chain of demand who are in this whole picture and here I just can't help but think about the delivery men and women on the bikes who are actually doing the job and they're well being needs to be considered seriously.
