Introduction
The emergence of the Coronavirus in 2019 and its rampant spread in 2022 affected the development of the delivery service. The disease outbreak coincided with lockdowns, during which people spent most of their time at home. The suspension of most activities gave a thriving indicator for an online business that applies e-commerce perspectives. In this sense, delivery services improved within households.
However, the supply chain was affected by the slow manufacturing rate in China’s industries. The country boasts a stable delivery service industry, which extends beyond consumables to multiple errands. Before the pandemic, China delivered an average of 50 billion packages, accounting for more than half of the global package volume (Yu, 2020). The booming growth was attributed to automatic sorting lines, vehicles equipped with refrigeration, and the low cost of labor and fuel, among other factors.
The development of delivery services has been felt at a high rate in China. Delivery applications showed a 77% growth in non-food orders during the pandemic, with more than 5 million face masks being sought online through mobile delivery applications (Lin et al., 2021). In the early stages of the disease, there was an increasing demand for medical supplies to be delivered both within and abroad.
The widespread use of the internet and the diverse demands of buyers have given the delivery service significant popularity, thereby fostering growth in the country. Delivery service in China ranges from food, kitchenware, fitness equipment, electronics, stationery, and medical supplies (Lin et al., 2021). Therefore, the transaction amounts reached significant levels despite instability in economies of scale.
The Development of Delivery Service in China
Food Deliveries
Despite occasions that showed adverse effects of the Coronavirus, the delivery services grew significantly. Chinese delivery channels have more than 420 million users, and over 6.9 million delivery workers are associated with the transforming industry (Yu, 2020). In China, almost everything is deliverable, which gave an advantage when people stayed at home, as they could request items and have them delivered to their doorsteps. The industry has been promising since 2015, when transactions related to the delivery industry increased by 2.4 times compared to before (Yu, 2020).
The delivery industry was projected to reach approximately 603.5 billion yuan, equivalent to about 85 billion USD, in 2019 (Yu, 2020). The industry’s success in China is attributed to its competitive prices, timely delivery, and extensive product range. For example, food delivery could take only a few minutes from the time a customer requests it to the minute they are handed over their product.
There is a collaboration with logistical companies that can transport the food within regions. Additionally, the delivery fee costs only about 1-5 yuan, indicating that the delivery service could expand further from its current level (Yu, 2020). Despite China being hit by the pandemic, the delivery industry indicated fair growth compared to others during the same period. China is a beneficiary of modern technology, and the role of innovative technology is to create a transformed world by bringing convenience and changing lives every day. It forecasts that delivery service development could grow beyond the current perceptions, even when the pandemic has passed.
The increased delivery services due to the pandemic ranged by service type in China. Textor (2020) states, “About 54 percent of respondents said they increased the usage of restaurant delivery services during the COVID-19 outbreak, while 18 percent of the respondents started to try this service.” That means demand increased during the period because people were limited by the measures to combat the growing spread of the Coronavirus. For instance, restaurant delivery increased by 18% during the lockdown, while grocery and meal kit deliveries rose by 25% and 28%, respectively, during the same period (Textor, 2020).
The study was based on respondents who participated in a McKinsey survey. After restaurants and dining points started opening gradually, the shift did not affect the number of people ordering food. 60% of Chinese continued to rely on that, which meant stable development in the delivery service (Textor, 2020). Meituan Waimai is the most popular food delivery application (Textor, 2020). Access to the internet is the leading facilitator of this business, as people have increasingly focused on getting everything online.
Millions of users in China experienced a period of restricted movement. Others were careful not to interact with the public, fearing that it would spread the disease. Lin et al. (2021) investigated the sustainability of supply chains during the COVID-19 pandemic, focusing on food delivery in China. Their study found that the online food delivery service (OFDS) was disrupted briefly when the pandemic started.
After a short while, many people realized it could contain pressure that was scaling rapidly from a food perspective. The consumer perception of OFDS changed, and many began opting for it, which aids this report in determining the industry’s development. The formation of delivery networks proved essential during the crisis, where consumers had to accept the drag on the food supply.
Technological development drastically changed this matter, increasing resilience in how customers perceive food and other services. As shown in Figure 1, the number of food delivery app users increased significantly in 2019 and 2020, surpassing previous years’ levels (Lin et al., 2021). Leading food delivery applications generated a total revenue of $ 7 billion in 2020 (Lin et al., 2021).
As seen in Figure 2, revenue in 2019 and 2020 was approximately 40 billion USD and 50 million USD, respectively, from app revenue (Lin et al., 2021). Many users have shifted from making offline food requests to online ones, boosting the industry’s development. Thus, the development of delivery services grew rapidly as a result of consumer trends.
China’s massive e-commerce platforms played a crucial role in establishing a stable delivery industry during the pandemic. Before the Coronavirus, Amazon had invested billions in fulfilling its promise of delivery to customers, with a pledge of two days or less. JD.com boasted of delivering its orders within less than 24 hours, with only 10% of orders not being delivered on Time (George-Parkin, 2020). The fulfillment of the desire to offer timely delivery was catalyzed by increasing demand for toilet paper, groceries, and medical supplies.
“During the lockdown in Hubei province, the epicenter of the Covid-19 pandemic, Freshippo dealt with the surge in demand by chartering buses for deliveries, tearing open gift boxes full of fruit to sell the contents piece by piece” (George-Parkin, 2020, para. 9). That means the delivery service industry had a potential to give higher returns compared to other industries. Post-COVID-19, the digital perception of delivery would continue, and the acceleration boosted the industry.
Healthcare Delivery Services
Due to COVID-19, China experienced a ‘big’ demand for medical devices domestically and abroad. China exported more than 99.41 billion USD in medical equipment to respective countries (Nan, 2022). These devices included ventilators, oxygen generators, syringes, and masks. For instance, Vincent Medical, in collaboration with other partners such as Royal Philips, expanded its export base, indicating that the delivery of medical supplies increased during that period. In this case, it is essential to note that countries without industrial capacity to produce drugs would obtain supplies through delivery services.
The implementation of the Regional Comprehensive Economic Partnership has led to an increase in inquiries about medical products in China during the COVID-19 pandemic (Nan, 2022). For example, Indonesia, with a population of more than 260 million, was one of the countries that ordered medical supplies from China (Nan, 2022). Thus, healthcare delivery was not limited to the country but also extended beyond its borders.
Chinese platforms providing medical services experienced a change in how people adopted telehealth utilization during the pandemic. Digital health has been on the rise, and a steady increase in requested services has been observed. The proliferation of online tech has led to consumerism trends. China’s online medical services were stipulated to reach 59 million users by the end of 2020.
By 2026, the industry is expected to grow more than 20 times, reaching a market size of $28 billion (Lee & Zafra, 2020). The demand for healthcare in the country, in terms of exploring diagnostic and prescriptive ties, meant it would expand its service delivery in clinical roles. 61% of Chinese consumers are adopters of new technology in medical provision, compared to a global average of 38% (Lee & Zafra, 2020). The trend would lead to stable developmental elements that boost the healthcare provision.
The reason for the increased demand for medical services during the pandemic was that many people were willing to share personal details for healthcare purposes. “China’s largest healthcare platform, Ping An Good Doctor, for example, saw newly registered users grow ten times from early Jan to mid-February, with their average daily consultations reaching nine times as many normal users” (Lee and Zafra, 2020 para. 6). That means amidst the pandemic constraints, digital health has become a frequent measure that supplements the other healthcare provision models. Therefore, digital health plays a significant role in the development of delivery services, even in the current day, when the disease is being fought to be gradually eradicated.
The technology infrastructure has played a key role in revolutionizing the delivery of medical care services in China. The launch of the world’s strongest 5G networks in 2019 significantly enhanced the capability to coordinate digital health. The delivery services in health are felt when it comes to remote consultation, which virtually connects medical experts, physicians, and nurses to their clients.
As shown in Figure 3, virtual consultations between specialists and patients have led to significant investment in developing healthcare delivery services. China has been clear about boosting the internet and medical health, which is why the industry boasts exemplary functionality in addressing non-chronic issues. Therefore, China’s extension of telehealth signified a transformed medical delivery service that forms part of the main points in this paper.
Delivery services significantly impacted China’s e-commerce landscape during the Coronavirus pandemic. Other delivery services have experience in grocery, kitchenware, and home fitness equipment. During this period, artificial intelligence (AI) plays a key role, as it enables remarkable resilience that tailors services to fit customers’ concerns (Campbell, 2020). Other countries began to admire how China leveraged AI to combat the pandemic and deliver services. In this case, the development is evident where connectivity and logistical networks are prioritized, resulting in a significant leap forward.
Human delivery is also key because not everyone would take consumables to a place filled with danger. For instance, a driver named Gao took a phone charger to a patient in a hospital where infections were rampant (Campbell, 2020). It reveals that the mindset is often overlooked. Another delivery personnel, Li Fengjie, had to walk approximately 30 miles to make deliveries because all public transportation had been halted (Campbell, 2020).
In this case, the developed delivery of services required physical zeal, which is characteristic of the Chinese people. Kitchenware was often ordered as many people wanted to have enough appliances that could be useful in handling the social measures put in place to limit the spread of the virus (Campbell, 2020). All these delivery services emerged at a time when the pandemic was at its peak, and people recognized their potential, which changed the trends and further developed the industry.
Drawbacks Experienced in Delivery Service Development
Despite numerous notes on how the pandemic enabled delivery services to thrive, various drawbacks hindered the industry’s development. The disruption impacted customer service, which means China, among the countries affected by the Coronavirus, had to experience the same (Kharpal, 2020). The pandemic’s continuity threatened the entire matter by increasing absenteeism among agents and support staff due to quarantines and restrictions on movement during certain hours.
Due to the anticipated uncertain work conditions, peer pressure and demand for performance created, which led to anxiety as businesses were not sustainable (Tobin et al., 2022). Many customers experienced a lack of information, which prompted some delivery personnel to face harsh times trying to justify their safe practices. Among many effects, delivery services were hit by staff infections, and some were fatally infected, resulting in a significant blow.
The development of delivery services was impacted by measures implemented to combat the pandemic. Alibaba projected that 15% of delivery areas were affected by the COVID-19 controls. The chief executive officer (CEO) Daniel Zhang says that “The resurgence of Covid has affected one area after another, resulting in abnormal or suspended logistic service in different places…this hurt merchant operations and consumer logistics experience” (Cheng, 2022 para. 3).
That means the ability to deliver packages for the company was altered hence, fragging the sales for the e-commerce giant in China. Douyin platform, which is significant for online shopping, claimed that sales have surged to undisclosed figures due to the effect of COVID-19. The ongoing COVID-19 controls have affected the overall delivery economy, with sales falling significantly for certain types of services, such as clothing and fashion.
Online delivery support staff have suffered as gig workers, sometimes sleeping on the street to avoid lockdowns. The country has been implementing the ‘Zero-Covid’ policy, which appears to pose a threat to delivery workers due to the interaction measures put in place (Tobin et al., 2022). The policy appears to affect blue-collar workers, as their income depends on the rate of effort they put in over time. Hence, there is a risk that online services will be frozen in that aspect.
During Shenzhen’s lockdown, for instance, all public transportation was halted. This means that delivery services were affected as riders had to navigate how to transport their items to the client with that restriction (Tobin et al., 2022). Therefore, despite many milestones being reached for delivery services, the development often crosses fingers due to the uncertainty surrounding the Coronavirus in China.
Conclusion
The COVID-19 outbreak provided a significant boost to delivery services in China. Many people have turned to ordering items due to protocols set by the Chinese government to control the spread of the Coronavirus. As a result, online delivery tools were downloaded, and many users started adopting technology to get their goods. Sales increased over previous levels for delivery services related to food, medicine, kitchenware, groceries, and fitness equipment.
China offered delivery both within and overseas due to the high demand for various deliverables, including ventilators and masks, among others. OFDS accumulated approximately $ 50 billion in 2020, a significant increase compared to pre-pandemic levels. The industry estimated a total revenue of approximately 603 billion yuan by the end of 2020, which would be feasible given that 60% of people were willing to use online delivery platforms, regardless of the pandemic disruption.
Telehealth, the online delivery of medical services, continued to grow as many Chinese were willing to share details about their health issues. Fifty-nine million people in China have adopted online delivery of medical services, which is expected to give the industry a significant boost by 2026. Despite the growth in delivery services, various adverse effects pose risks to the industry. First, many support staff in delivery platforms lack containment measures, forcing them to refrain from doing business, which is a significant blow to the industry.
Others suffer from an infection with the Coronavirus. As a result, their tasks are left undone, which affects the supply of basic commodities. Many government policies in China, such as Zero-COVID, make certain delivery areas off-limits. Alibaba reports that in October and November 2022, 15% of Chinese delivery areas were affected by the single-stay policy aimed at curbing the spread of the pandemic.
Many delivery support staff fear transacting with clients, as it can contribute to their health consequences. Additionally, many workers have faced tough times during the pandemic as they are forced to walk long distances when public transport is halted or sleep in the streets because they fear that some cities in China may be locked down. However, when comparing the effects, the development of delivery services has been stable in China since the start of the Coronavirus pandemic. China is improving by the day in its efforts to combat the disease, and the delivery service industry is expected to thrive despite the disruptions caused by COVID-19.
Reference List
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