It’s a pretty typical afternoon here at TechNode headquarters in Shanghai. I walked down the street around noon, skipped my favorite sesame noodle joint since it was full, and wound up finding a new spot for Cantonese-style rice noodle rolls. On the way back, I picked up an iced lemon tea from hip milk tea chain 1 Diandian after waiting in a long, somewhat socially distant line. But back at my desk, I found a pile of draft opinion columns about the salad days ahead for e-commerce grocery delivery, now that the coronavirus epidemic has killed off brick-and-mortar once and for all.
I say, prove it.
There are analysts telling us the epidemic has been a big win for online food delivery—and meanwhile, here I am waiting in lines in Shanghai. Something doesn’t add up. Nobody’s told the lunch crowd that it’s the beginning of the end for physical stores.
Nobody’s told the Shanghai lunch crowd that grocery delivery has taken over the world.
Filling a bucket in a storm
What do the numbers say? If you read them naively, it does look like online groceries have won out: groceries and household goods deliveries have gone up by huge figures over the virus period, topping out around Meituan’s 200% for fresh produce. So offline grocery shopping must be reeling from the blow, right?
Almost certainly not. TechNode has visited busy vegetable markets across China—and even in the epicenter of Hubei, we’ve seen markets arrange deliveries without relying on apps like Meituan. Grocery shopping has held up just fine, and it’s fed a lot more people than Meituan and Eleme.
What delivery triumphalists are forgetting is that the market for online grocery shopping isn’t a fixed number of people who want groceries—it’s part of a much bigger market for meals. Every time you eat a meal, you choose between cooking it yourself or getting it from a restaurant, and just about every restaurant in China was closed for all of February and a lot of March.
China is a country with a lot of restaurants. Eating out is cheap, tasty, and popular, and ordering delivery is nearly as cheap and also popular. When people got locked in their homes, that meant nearly every meal they would normally have bought from a restaurant instead had to be cooked at home. This is, simply put, a lot of meals, probably running into many billions.
App-based grocery delivery certainly got a piece of this action—but these apps were filling buckets in a storm, and offline groceries were right there alongside them. In my efforts to compare app-based groceries to offline vegetable markets, I’ve seen the markets hold up at least as well. Even in Hubei, when people couldn’t go to the markets, local authorities arranged deliveries. Keeping offline groceries stocked was no easy task, and the Wall Street Journal has done a great look at the challenges involved.
As China edges back to normalcy, it looks like pre-outbreak food habits are returning: every week, people are willing to sit closer to each other to get a favorite bowl of noodles, and restaurants grow more crowded.
Doubting tech triumphalism
It’s been particularly obvious to me that stories about the death of food outlets are detached from reality because I’ve been eating all through the last few months. But there’s a moral to this story: tech has got to prove its worth in the data, just like anything else.
I expect what’s really at the root of the ill-founded stories I keep reading isn’t bad statistics—it’s the fact the story is so damn plausible to the kind of people who write market analysis. They tend to be young, urban, and not very fond of grocery shopping. A lot of them don’t know how to buy a potato in their Shanghai neighborhood without using an app.
But the fact that you’d rather have a man in a yellow helmet bring you your food isn’t a solid basis for predicting the behavior of a billion people. No matter how much sense a tech story makes, it ain’t true til it can be proved.