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More people in China are stuck at home as they are experiencing the coronavirus outbreak, giving some delivery and e-commerce businesses an opportunity, even as they try to manage the hazards of the disease.
On a normal day, a courier for Beijing’s JD.com would deliver around 140 to 150 packages per apartment, according to Langsong Sun, the company’s delivery station head in Yizhuang.
Now, that’s gone up to over 200 orders a day, Sun said on Tuesday to CNBC.
Over half of China is currently shut down as authorities strive to contain the spread of a new virus that emerged in late December in the Chinese city of Wuhan. Up to now, it has killed more than 500 people – generally in Wuhan – and infected more than 20,000 throughout the country.
Businesses in at least 24 provinces, municipalities and other regions of China have been told not to resume work before Monday to prevent the virus from spreading.
Beijing’s authorities have strongly asserted that companies must let employees work remotely until Monday. Most of the schools across China are also shut until mid-February or earlier.
A surge in grocery delivery
As more people try to stay at home, they’ve turned to ordering groceries from online companies that boast one—or two-hour delivery during regular operating hours. As anticipated, orders for disinfectants and face masks have also rippled.
For instance, JD’s affiliate—the delivery company for Walmart and regional grocery chains—described its sales as almost doubled from a year ago during the ten-day holiday of the Lunar New Year that ended past Sunday. In the same period, according to JD, its sales of fresh items surged more than three times compared with the previous year.
The company also said it sold nearly 15,000 tons of fresh products during the day holiday.
In Beijing, when workers return to work, customer demand is so high that orders likely take hours longer than scheduled to arrive. And rather than extending into the evening, available delivery slots are often cancelled.
Demand remains high, particularly in meal delivery. According to state media, a Beijing city official disclosed on Wednesday that more or less than 20,000 delivery people were handling an average of over 400,000 orders per day from takeout platforms Elema and Meituan.
Delivery people nationwide are asked to wear face masks and do temperature tests.
Coronavirus Challenges for Delivery Companies in China
The new virus from Wuhan has escalated several logistics challenges for delivery, mainly food.
In many Chinese areas, couriers may no longer be able to send packages to the door. Instead, they have to call customers to receive parcels from the entrance gate of an apartment complex, which can often be several minutes away from the customer’s unit.
“It definitely lowers efficiency,” Ruichuang Chen – a JD.com courier, said.
Hence, to save the time that a walk away from the customer usually takes, Hema, Meituan, and Dada have publicized an in-app feature, which is an option for contactless delivery. This enables the courier to leave an order in an appropriate spot for the customer to collect without interacting.
Pizza Hut and Kentucky Fried Chicken have also introduced similar delivery facilities. Their Parent company, Yum China, announced in a statement that these brands are testing a feature in China that allows customers to order online and pick up their food in-store without contact. Meituan stated it’s also doing something similar.
Overall, analysts and industry representatives made mostly positive remarks about logistics companies’ relatively normal operations outside areas such as Hubei, the province that remains the primary spot for the virus.
Many businesses have contributed to fostering the supply of drugs and other necessities to the people of Hubei and Wuhan through selective channels.
Given the delayed re-opening of various businesses and quarantined cities, it may take a few days or weeks for orders to arrive for most of China. Early this week, some cities like Hangzhou – where Alibaba’s headquarters is situated – also performed inner-city highway closures and said households should not send more than one person out to get goods every two days.
Alibaba’s logistics affiliate, Cainiao, said it “will deploy the workforce as per the specifics of the government plan on returning to work. ”
Impact on economy
It’s unclear at the time what the final economic impact this year will be. That shutdown in China is an extension of the Lunar New Year Holiday, which started on Jan. 24, 2020.
Charlie Chen, the director and head of the consumer team at China Renaissance, expects these in-home deliveries to be one-time purchases. After the virus risk dies down, many consumers will bounce back to their habit of going outside for fresh produce markets.
