Workers sort packages after an online shopping spree in November in Fuyang, Anhui province. (Photo/China Daily)
E-commerce platforms and bricks-and-mortar stores could coexist and complement each other, analysts said on Monday, after the CEO of powerful Chinese e-commerce platform JD.com made disparaging remarks during a television program about its rival's offline stores in his hometown.
Liu Qiangdong, chairman and CEO of JD, said it is a shame to see its rivals, Suning Commerce Group and Gome Electrical Appliances Holding Ltd, two of the biggest electronic offline retailers in China, still surviving in Suqian, in eastern China's Jiangsu province, which is also Liu's hometown.
Liu's remarks were revealed in a recent CCTV documentary series while he was motivating employees at JD's Suqian branch.
"JD topped the e-commerce market share in Suqian, surpassing any competitors. However, I find the bricks-and-mortar stores of Gome, Suning and Oppo still exist. It is a shame for JD," he said.
Liu added that he would buy all the advertising billboards around the Suning and Gome stores for at least five years, to help push Suning out of Suqian.
Suning COO Hou Enlong on his Sina Weibo, China's equivalent of Twitter, responded: "Suning has opened more stores, with nearly 4,000 stores across the nation ... fortunately, Liu hasn't been to many places. Only Suqian makes him feel shameful. If he went to more cities, how could he survive?"
Lu Zhenwang, CEO of the Shanghai-based Wanqing Consultancy, said online and offline models existed and complement each other and neither of them would diminish in the future.
Another analyst said older and newer technology could coexist.
"The offline retail channels, including virtual reality and augmented reality experience stores, are complementary to online business as consumers can experience things personally and enjoy the convenience," said Yang Yaqiong, senior analyst at consultancy Analysys.
Yang said there was a trend for online platforms to integrate with offline retailing channels.
"The real economy, such as the convenience stores and small-sized supermarket chains, will witness growth this year," he said. Yang added that e-commerce giants were looking for new growth points through offline stores.
However, Chinese smartphone maker Xiaomi Corp plans to open 1,000 offline experience stores in the next three years and 200 stores in 2017, emphasizing the importance of new retail.