“Ji Su Da” - Lightening Fast Delivery in China for Singles Day

November 11 is Veteran's Day in the U.S. and it is also Singles Day in China. While we are honoring our military heroes, the Chinese are in a shopping frenzy.

Singles Day is now the largest shopping day in the world and about four times bigger that Black Friday in the US. This year's one-day retail sales are expected to be $20 Billion, a nearly 40% increase over last year!

Although its origins are about being single, Singles Day is now more synonymous with the date 11/11…all single numbers. It is advertised as a day to buy something for yourself, but with Alibaba's help, nearly 10,000 sellers offer hundreds of thousands of sale items to entice customers to buy more than just one simple thing. In fact, you can buy just about anything for a discounted price on Singles Day including vacations and cars. It's a 24-hour shopper's bonanza.

This year it is even bigger and better with Alibaba's live streaming entertainment with international stars such as Katy Perry and a live fashion show in Shanghai.

As models walk down the runway, you can purchase the fashion and have it delivered immediately. Alibaba will also sell you virtual reality headsets for less than $1 to take you shopping all over the world. Simply snap in your smart phone to connect. To buy something you see, just nod your head; no need to take off the headset. A buyer in China for example, can take a VR trip to Macy's in New York City and buy a dress.

For supply chain and logistics professionals, delivery within 2-3 hours requires a completely new way of thinking about inventories and logistics. Called “Ji Su Da” or “fast delivery” by Alibaba's affiliate Cainiao and its competitor, JD.com.

These services pick up goods and immediately deliver them to the buyer. Getting a network of delivery agents to provide this service cost effectively is no easy task. It requires extensive networks of computerized dispatch and monitoring equipment, on-ramping of new retailers and drivers, billing systems and smart-phone platforms to name a few.

Ji Su Da is part of a broader trend in combining online commerce with offline businesses from flagging a taxi to finding nearby restaurant deals. This type of service is also known as O2O or “online to offline.”

Services like this in China use smartphones to find the retailer's pickup location, the nearest logistics provider and the delivery point and pay for the goods through Alipay (Alibaba's payment services similar to PayPal). Services like this exist in the US for food deliveries in major metro areas and of course, Uber and Lyft. Amazon also offers 2-hour deliveries on certain goods.
This isn't the first time something like this has been tried in US retail.

Remember Web Van, the grocery delivery service in the dot.com days? The difference is in who holds the inventory. For Ji Su Da to work in China, a warehouse or distribution center has to be taken out of the chain. The e-Commerce company does not own or manage inventory. Orders are managed on-line, inventories are maintained by the retailer, and logistics providers perform the deliveries. Voila!

As professionals, we have to keep thinking about these kinds of new models and how we might adapt them for use in other industries and businesses. What will you try next?

SC
MR