Digital era helps old foodmaker in delivery, expansion

For Lu Nan, a 35-year-old Beijing resident, waiting in line for some conventional delicacies has been a holiday tradition.

He never celebrates Spring Festival, Lantern Festival or Mid-Autumn Festival without first picking up some freshly made seasonal delicacies from Daoxiangcun, a time-honored brand that's been a favorite of Beijing residents since it opened in 1895.

They've been such a favorite, in fact, that purchasing them before a holiday has meant waiting in line - sometimes for up to two hours - at one of the company's physical branches in Beijing.

"I've always come to Daoxiangcun since I was a kid," Lu said. "I never go to other shops to buy snacks and cakes. It has become a habit for me. I trust the quality of the brand, and the price is fairly reasonable."

Today, however, Lu no longer has to wait in line. Daoxiangcun, like other time-honored brands, has embraced the digital era, which means that its signature yuanxiao (rice dumpings) are just a few computer clicks away.

In 2014, Daoxiangcun established its flagship stores on Alibaba's e-commerce platform Tmall.com and China's leading online retailer JD. It also teamed up with online food-delivery platforms Baidu Waimai and JD Daojia, a step toward exploring the O2O retail mode of time-honored bakeries.

Last year, Daoxiangcun signed a strategic partnership with JD, and now, as long as consumers make their order before 3 pm, they can get fresh rice dumplings on the same day.

Daoxiangcun's teaming up with e-commerce platforms quickly proved to be a success. According to statistics from JD, last year, consumers ordering Daoxiangcun commodities from its platform expanded by 4.1 times compared with 2016. The sales revenues in 2017 surged rapidly, with a tenfold increase from 2016.

The digital era has also expanded the company's reach far beyond Beijing. Going online means Daoxiangcun can deliver its products nationwide, including small cities.

From JD's data, in 2017, from first to sixth-tier cities, subscribers to Daoxiangcun on its platform grew by five to 10 times, and the growth rates in the fifth and sixth-tier cities were the most obvious, reaching eight times and 10 times respectively.

"The fast-developing e-commerce retail industry in China has injected new growth points into the time-honored brand," said Cheng Wenhua, deputy general manager of Beijing Daoxiangcun Foodstuff Co Ltd.

"Back in 1985, we used old-fashioned scales to weigh the pastry, and consumers lined up outside the store during peak hour.

"Now, with the online platforms, consumers can enjoy the delicacies more easily, and many of the young generation have become our fans. We see tremendous room for development," she said.