The Rise of Online Grocery Shopping in China Which Brands Will Benefit?

• Published in: Journal of international marketing (East Lansing, Mich.) Vol. 28; no. 2; pp. 20 - 39
• Main Authors: van Ewijk, Bernadette J., Steenkamp, Jan-Benedict E.M., Gijsbrechts, Els
• Format: Journal Article
• Language: English
• Published: Los Angeles, CA Sage Publications, Inc 01.06.2020; SAGE Publications; SAGE PUBLICATIONS, INC
• Subjects: China; grocery; digital sales channel; China; ecommerce
• ISSN: 1069-031X; 1547-7215
• DOI: 10.1177/1069031X20914265

Online grocery in China is on the rise. With large differences in brands’ abilities to secure a portion of China’s online pie, a key question is what drives these differences. The authors derive how a brand’s total sales change as the online grocery share goes up, and they show that it depends on two indices: (1) the brand’s online index (brand’s online category share relative to its offline category share) and (2) the category’s online index (category’s grocery share online relative to its grocery share offline). The authors then identify brand and category factors that drive these indices. They estimate their model on 448 brands in 60 product categories in China using 2011–2015 data. Their analyses show that the brand online index mainly increases with higher levels of online availability, lower online-to-offline price ratios, and for “trusted,” less “fun” brands. As for the category online index, expensive, less frequently bought categories benefit from the shift toward the online channel, whereas the opposite holds for perishable and heavy categories.