Chinese internet users expect seamless ecommerce delivery, or else!

Business & Technology

Hive Box, China’s largest smart locker company, faces a consumer backlash after its failed attempt to raise prices amid COVID-19-induced spikes in demand for its services.

Credit: SupChina illustration by Derek Zheng

Hive Box, China’s largest smart locker company, offers its users a secure way to receive ecommerce deliveries, at convenient public places, when they are at work or away from home. This has become an essential service, especially in the wake of COVID-19, as more and more Chinese consumers rely on shopping online for everyday necessities.

But the company has been facing a boycott from customers after it put an end to a service that allowed casual users — as opposed to paying members — to store their ecommerce purchases for free. On April 4, in a move to increase membership sales, Hive Box announced that non-member customers could leave their deliveries in a Hive Box locker free of charge for the first 12 hours but after that, a fee of 0.5 yuan ($0.07) would be charged for every 12 hours. To avoid these fees, users can pay 5 yuan ($0.70) a month to become a Hive Box member.

The introduction of service fees follows Hive Box’s acquisition of its biggest smart locker rival. Hive Box itself is owned by China’s second-largest courier company, SF Expressstartup, and by last year had grown into “the world’s largest parcel machine operation company,” with more than 170,000 locker units in over 110 Chinese cities.

Last Friday, the company apologized, but that has done little to stop the online anger at the company, which is facing threats offline, too. Last week, the government agency that regulates China’s logistics industry launched an inquiry into the case and arranged a meeting (in Chinese) with senior executives from Hive Box, ordering them to “undertake social responsibilities, come up with a solution, adjust its pricing, and respond to reasonable requests from customers.” Meanwhile, more than 100 management committees of residential compounds in Shanghai have suspended their agreements with Hive Box.

What’s the business lesson?

Chinese consumers expect seamless ecommerce ordering, payment, and delivery as basic rights. Woe to companies that interfere with online shoppers’ convenience!