Text// Tianyu Duge
Under the wave of the Internet economy, e-commerce has expanded rapidly with its marginal cost of nearly zero and has become an important channel for modern consumption. At the same time, traditional brick-and-mortar stores are facing increasing pressure, from rent to labor, from competition to management, all of which reflect a kind of survival anxiety. But is this seemingly zero-sum game really that simple? Today, Tianyu Duge will delve into the economic interactions between e-commerce and brick-and-mortar stores, revealing their true impact on employment, costs, and economic vitality.
The rise of e-commerce has indeed provided a large number of employment opportunities for the express delivery industry. With the popularity of online shopping, courier services have become an important bridge between consumers and merchants. The number of couriers, warehouse managers, customer service and other positions has increased, injecting new vitality into the labor market. This does not mean that physical stores cannot "raise" courier services. In fact, many brick-and-mortar stores are also actively embracing online sales, and through the O2O (Online to Offline) model, combining offline experience with online convenience, it can also create express delivery demand.
Next, let's look at the current state of brick-and-mortar stores. The number of brick-and-mortar stores has indeed increased compared to 20 years ago, but the growth has been uneven. On the one hand, there is an increasing number of large shopping malls and chain brand stores, while on the other hand, small, independent stores are struggling to survive due to high rents and high competition. The rise in rents has undoubtedly exacerbated the operating pressure of physical stores. In the face of high rents, even more profitable goods can become unprofitable due to the erosion of rent, utilities and other expenses.
It would be unfair to blame e-commerce solely for the plight of brick-and-mortar stores. In fact, the development of e-commerce has also provided new opportunities for physical stores. Many brick-and-mortar stores have broadened their sales channels by cooperating with e-commerce platforms to achieve complementary online and offline sales. In addition, the competition of e-commerce forces brick-and-mortar stores to improve their service quality and operational efficiency, which is beneficial to the development of the entire industry.
Is e-commerce really saving the economy today? The answer to this question is not a simple yes or no. E-commerce does provide consumers with more choices and a broader market for merchants, but it also brings problems such as price wars and counterfeit and shoddy goods. While brick-and-mortar stores face challenges, they provide instant experiences, personalized service, and social features that e-commerce can't replace. Therefore, e-commerce and physical stores should complement each other, rather than opponents in a zero-sum game.
We have to face up to the biggest constraint facing brick-and-mortar stores – rent. High rents not only limit the development of brick-and-mortar stores, but can also lead to a vicious circle in the economy. To solve this problem, it takes a concerted effort between governments, businesses, and landlords. The government can protect the development of small and medium-sized enterprises by formulating reasonable policies to regulate the rent market, businesses need to constantly innovate their business models to improve their competitiveness, and landlords should also realize that only the healthy development of physical stores can bring long-term profits.
The low-price strategy of e-commerce can indeed attract a large number of consumers and achieve the goal of "running volume". The model of earning one dollar per order is not uncommon on e-commerce platforms. But that doesn't mean e-commerce is less expensive to operate than a brick-and-mortar store. In fact, e-commerce goods warehouse rent, labor costs, traffic promotion fees, express delivery fees and other expenses are not available in physical stores. In particular, the two-way return policy has increased the cost burden of e-commerce. This does not include the decline in profit margins due to price wars and the increased difficulty in regulating counterfeit goods.
On the other hand, although it seems that more sales and service staff are needed on the surface, in fact, a 500-square-meter clothing store may only need one store manager and five store employees to run well. In contrast, an e-commerce store of the same size needs more people to complete the work of operation, art, photography, warehouse management and customer service. If calculated according to the average salary of 5,000 yuan per person, the labor cost of e-commerce stores is almost twice that of physical stores.
This doesn't mean that brick-and-mortar stores don't have an advantage. The instant experience, personalized service, and social space capabilities offered by brick-and-mortar stores are irreplaceable by e-commerce. This is why even with the rapid development of e-commerce, there are still a large number of consumers who choose to shop in physical stores.
The emergence of e-commerce undoubtedly provides a solution to this problem. By selling online, merchants can avoid high rents and reduce operating costs, allowing them to offer more competitive prices. At the same time, e-commerce has also expanded employment opportunities and enabled people to make the best use of their duties. For example, the emergence of couriers, warehouse managers, customer service and other positions is due to the development of e-commerce.
What we can't ignore is that the development of e-commerce has also brought some problems. One of the most serious is the proliferation of counterfeit goods. Due to the difficulty of supervision, some unscrupulous merchants use e-commerce platforms to sell counterfeit and shoddy goods, which seriously damages the rights and interests of consumers.
E-commerce does bring challenges to traditional brick-and-mortar stores, but it also provides opportunities for transformation. The development of the market should go with the flow, rather than blindly rejecting new things. What we need is a multi-faceted, mutually beneficial and win-win market environment, where e-commerce and brick-and-mortar stores can show their strengths and jointly promote economic prosperity and social progress.