NBR: The DangDang.com Craze
(bos - whats next? Hello Kitty? Har har har)
(Kastel.. pay courier.. not exactly but like Jobbers?)
SUSIE GHARIB: As Internet access spreads across China, online activities like cyber-dating and gaming are becoming popular. But Internet shopping is just starting to catch on among consumers. From Beijing, Celia Hatton looked at one online retailer that's leading the way in business to consumer shopping.
CELIA HATTON, NIGHTLY BUSINESS REPORT CORRESPONDENT: The staff can barely keep up with demand at this warehouse in South Beijing. Online orders for books, CDs and movies are flowing in from all over the country as Internet users catch on to DangDang.com, Mainland China's version of Amazon.com. Peggy Yu launched DangDang during the dot-com boom in 1999, using U.S. companies like Amazon as an example. Since then, the business has grown steadily, bringing in profits for the first time last year.
PEGGY YU, CO-PRESIDENT, DANGDANG.COM: We survived the bubble and we are still in business and growing strong.
HATTON: But DangDang's road to success hasn't been entirely smooth. China lacks a national courier service, making it difficult to deliver items. Customers here also prefer to examine products in person before buying. And when they do make a purchase, it's usually with cash. The company has overcome these obstacles with a unique business model which takes advantage of readily available resources. Orders are picked up from the central warehouse here in Beijing and are delivered to customers using bicycle couriers companies located across China. Customers have the option of giving cash payments directly to the bike couriers, who then wire the money back to DangDang headquarters. At DangDang's call center, however, it's clear that some consumers still haven't quite got the hang of online shopping. The staff here speak with hundreds of worried callers each day.
YU: About 45 percent of the phone calls and e-mails we receive at the customer service department are questions such as: How do I really shop online? What do you mean by shopping cart? Order submission, did you really get my order?
HATTON: People between the ages of 23 and 38 make up DangDang's core customer base, but critics argue that most people on Mainland China have no real reason to change the way they shop.
LONG JUNSHENG, PROFESSOR: They have time, they just don't have any money, so they (UNINTELLIGIBLE) of small shops and compare price to get a deal.
HATTON: In a country undergoing massive change, few can argue that online shopping doesn't have great potential for the future. More than 80 million people in China now use the Internet; second only to the United States. Maybe it's fitting then that the name DangDang was chosen partly because it sounds like a cash register ringing in sales. Celia Hatton, NIGHTLY BUSINESS REPORT, Beijing.
GHARIB: Well, Paul, if it takes off, just those bicycle couriers are going to be pedaling everywhere.
KANGAS: They will be. That's true.
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