China's New E-Commerce Middlemen

Chinese tech companies look to partner with local leaders who help coordinate neighborhood purchases

- By Coco Liu

While managing her convenience store in the central Chinese city of Changsha, Chen Shishun always has an eye on her phone. In part, she’s just talking on WeChat and sharing photos with her improbably large network of friends and neighbors. But Chen also monitors grocery apps for bulk deals on fruits and vegetables, then gathers orders from people she knows and has the food delivered to her store.

The role of neighborhood e-commerce middleman, or tuan zhang, has become an increasingly vital one in Chinese cities since the first Covid-19 lockdowns. Chen, the kind of local merchant who does things like help customers carry purchases home, took charge of placing online grocery orders for the neighborhood when it was locked down this February. Word of her services spread quickly, and she now has almost a thousand people seeking to take advantage of steep discounts and cheaper shipping fees she gets by placing big orders—on the busiest days, she and an assistant handle 800—and centralizing deliveries.

There are hundreds of thousands of such operations across China. People form community buying groups based on shared neighborhoods, districts, or even apartment blocks. While some version of this has existed since rural farmers banded together to buy seeds and fertilizer, it’s been supercharged by smartphones and a growing e-commerce market.