While 2018’s Singles Day was yet another tremendous success, a disturbing report by the Financial Times tarnishes the record. It appears that 2nd biggest Chinese online store JD.com has used compelled student labor to fulfill the enormous spike in orders. Logistics students stated that their school blackmailed them into accepting long, low-paid shifts during the Singles Day week.
This report sheds light on the other side of the coin for shopping holidays. Most companies and infrastructure must already support strong growth all year long. Concentrated shopping frenzies seem to apply an excessive additional amount of stress. That some companies be willing to break the law to face the rush is regrettable and questions the sustainability of e-commerce shopping sprees.
Read the FT article (paid)
IKEA announced that it would be cutting 7,500 jobs worldwide by 2020 to account for a significant shift towards e-commerce. Over the same period, the DIY furniture company said it planned to hire 11,500 more employees to face its digital needs.
IKEA is merely acknowledging a few trends that contradict its current model. Over the last year, store visitors increased by 3 percent while website visits were up by 10 percent. As fewer and fewer people own cars in mature economies, IKEA has also been opening smaller city center shops.
More details in this Straits Times article
South Korea is probably the world’s most mature e-commerce market to still elude Amazon. The largest e-commerce retailer in South Korea is Coupang, founded in 2010. Last week, it announced a second round of funding with SoftBank, after an initial series of $1 billion in 2015.
The initial funding helped the company build its last-mile infrastructure. This round should provide the financial means to expand its offer of shopping and delivery services. In a country where smartphones are deeply embedded in daily lives, the company boasts that half of the population of South Korea has installed its mobile app.