Shanghai’s lockdown tests China’s online grocery apps

But things started to slow down last year. Despite the fame and money, these companies struggled to make a profit as the lockdown eased and people just went back to face-to-face shopping. What’s worse, they were caught up in China’s new fight against mistrust. The Chinese government was quick to impose fines and pen editorials questioning the value of the industry.

As a result, promising startups and large tech companies decided to cut back on their expansion plans, lay off on a large scale, or file for bankruptcy. DiDi and Ele.me, two successful tech companies that are betting on online groceries as their new growth driver, decided to discontinue those services. At least two more online grocery startups have closed their businesses in the past year.

The latest lockdown is giving the industry a second chance. Other cities in China, such as Beijing and Hangzhou, are also facing imminent lockdowns, with millions of people downloading these apps once again and relying on them on a daily basis. In fact, Dingdong’s app reached number three on the App Store’s free app chart in China in early April.

Daily battle

While lucky Shanghai residents can get one-off free grocery packages from their employers or local governments, most people, like Song, need to find a way to buy their own groceries. Some residents formed neighborhood groups through the messaging app, collected everyone’s orders, and made wholesale purchases directly from nearby farms or food factories.

But Song soon realized that shopping for groceries with all her neighbors meant she didn’t have to make her own choices. She lives in an old residential neighborhood where three-quarters are seniors or families with children. While his neighbors are placing family-sized orders for items like five pounds of pork, such purchases will put him in use forever.

The only other option for that is, after all, grocery apps. He insanely refreshes Dingdong, Hema and Mituan Mikai every day to get the slot.

But as the lockdown disrupts the supply chain of many goods, including groceries, it also requires luck and dedication to place orders on apps. Like Black Friday shoppers waiting for store doors to open, Shanghai residents are zooming in on apps at the appointed time to try to make as many purchases as possible before the stock runs out in seconds. It can be stressful and frustrating.

Lee, a consultant in Shanghai who only uses her surname because she wants to remain anonymous, also wakes up early every morning for a week to try her luck with half a dozen different apps. But during the lockdown, she did not receive a successful order, while her mother, who lives under one roof, managed to get three. There was a time when Lee put hundreds of RMB worth of groceries in a shopping cart – yet when it came to the payment stage, the only thing left in stock was a bag of candies.

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