Companies

Distribution sector: healthy and growing but needs more e-commerce

By Zhao Lei (China Daily)
Updated: 2010-12-13 13:50

Exhibit of eFuture at the China Chain Store and Franchise Association's annual conference, in Nanjing, in November. [Photo / Provided To China Daily]

China's distribution and e-commerce businesses are poised to meet the challenges and take advantage of the opportunities expected under the 12th Five-Year Plan (2011-2015), according to a prominent IT expert.

This and other remarks on the next Five-Year Plan come from Yang Dehong, deputy chief of the China Chain Store and Franchise Association's IT applications committee, who spoke with China Daily recently.

The plan, which is to be officially announced early next year, is a blueprint of China's economic and social development in this decade.

"We people working in the distribution and e-commerce sectors are following the 12th Five-Year Plan developments closely," said Yang, who is also president of Nasdaq-traded eFuture Information Technology Inc, a leading software and service provider in China.

"The plan's proposal lays out strategies for expanding domestic consumer demand in rural areas and elsewhere, and therefore creates huge opportunities for the distribution business," he explained.

"The business has thrived in fairly developed cities and now can embrace markets in previously underdeveloped regions, which have seen a remarkable surge in demand for logistics services."

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China has more than 20 million retail outlets, including some very well-known companies, such as the electrical appliance giant Gome and supermarket chain Wumart, which are doing very well, Yang said.

"A majority of these big names are eFuture's clients and have been looking for ways to extend their reach to small and medium-sized cities and towns.

"The principal challenge we face now is how to maintain service quality for our clients. So, we plan to set up offices in places where clients have an established presence and to strengthen the training of our partners."

Yang said that while China's distribution business has seen some significant progress in recent years, it is still too early to call it a real success.