Things began to take a downturn last year. Despite the hype and money, these companies struggled to make a profit as people went back to shopping in person. They were caught in China's fight against antitrust behavior. The value of the industry was questioned by the Chinese government.
As a result, the once promising startups and big tech companies decided to cut back on their expansion plans. Two successful tech companies that bet on online grocery as their new growth driver decided to shut down those services. There are at least two more online grocery businesses that have closed in the last year.
The industry is getting a second chance. Millions of people are once again using these apps and relying on them on a daily basis as Beijing and other Chinese cities face imminent lockdowns. In the beginning of April, the app rose to third place in the free app chart in China.
Most people, like Song, need to figure out a way to buy their own groceries, even if they receive one-off free grocery packages from their employers or local governments. Some residents formed neighborhood groups through messaging apps, collecting everyone's order and bulk-buying directly from nearby farms or food factories.
Song realized that she didn't get to make her own choices when she bought groceries with all her neighbors. Three-fourths of the people in her neighborhood are seniors or families with children. While her neighbors are placing family-size orders for things like five pounds of pork, such purchases would take her forever to consume.
The grocery apps are the only other option for her. Every day, she has to refresh Hema, Dingdong, and Maicai to get a slot.
Even placing an order on those apps is hard with the supply chain being disrupted. Like Black Friday shoppers waiting to bust the store doors open, residents of Shanghai are rushing to buy as much as they can before the stocks run out. It can be difficult.
Li, a consultant in Shanghai who wishes to stay anonymous, got up early every morning for a week to try out half a dozen different apps. She didn't get one successful order, while her mother got three. There was a time when Li put a lot of groceries in the cart, but when she got to the payment stage, the only thing left was a bag of candy.
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