Digital technology is a powerful enabler for China’s economic growth.

In our Hosting in China series, we discuss if you need to host in China, the network and data center landscape in China, and how to choose a data center in China.

With the digital revolution in China, industries are experiencing a massive shift in revenue as well as profit pools across the entire value chain. China is now the biggest e-commerce market in the world.  In 2016, China had online sales of $672 billion, double the amount of U.S. online sales.  Goldman Sachs forecasts that Chinese e-commerce sales will growth to $1.7 trillion by 2020.

The world’s attention turns to China as everyone seeks to learn the secrets of its economic success.  Let’s dive in and explore the digital trends accelerating China’s growth:

Social drives e-commerce

China’s economic growth coincides with the advent of the information age. Most consumers are web savvy and can access online review sites or use social media recommendations to make consumption decisions.

Just to illustrate, the number of WeChat users shopping from the platform has increased over the years  to about 30 percent in 2016. More and more WeChat stores are also opening up to capture this audience.  Some analysts speculate that WeChat is on a path to become one of the most powerful apps in the world.

In the near future, we can expect to see more business conducted directly from social platforms through the help of messenger platforms, AI platforms, and IoT speakers to enhance customer experience and offer a spontaneous customer service.

Mobile commerce is king

With well over 95% of internet users in China (about 730 million people ) going online through their mobile phones, mobile shopping is truly king.  Mobile commerce will continually grow in China and possibly be the main way consumers purchase online.

Digital payments

The development of mobile commerce in China has triggered the transition from cash to cashless payment systems. Mobile services such as WeChat or Alipay make it really easy for Chinese users to purchase both offline and online.

Innovators in China are also continually developing better ways to facilitate the use of smartphones in making payments for products and services. For instance, Sino Corp partnered with Alibaba (e-commerce giant) to launch Sina Weibo, a payment option that would enable quick payments through scanning a QR code.

Other innovations like mobile apps, mobile POS, and e-credit cards also provide smartphone users with more options when paying for products and services.

We anticipate Chinese mobile payment system merchants will continue with their aggressive expansion as they invest and acquire financial assets in and outside of China in their endeavor to global domination. Soon or later Alipay may just be the alternative to your Mastercard.

Online and offline are merging

Currently, online players in China are committed to driving this business model. The integration of offline and online (O2O) retail elements include logistics, products and services, marketing, big data and so on.

A good example of this initiative is Hema Supermarket where Alibaba thrives within an O2O landscape.  Hema is a physical store with fresh foods. To shop, customers are required to download an app through which goods can be purchased. Consequently, the consumer’s profile is saved and stored online. The customer can then enjoy deliveries to his doorstep if s/he lives nearby.

Moving forward, Alibaba and other e-commerce giants will focus on grocery stores in China, since these shops are great places ready consumers can be tapped to drive further growth of payment platforms as well as e-commerce.

Smart Automation

China has quickly emerged as a global leader in automation. It is estimated that China will achieve a sales increase of about 15-20% per year between 2018 to 2020 from the industrial robot market.

By embracing automation that is powered by artificial intelligence, augmented reality and robotics, the country has fundamentally made a significant change in the way most businesses operate. With efficient and cost-effective operations, enterprises can forge a more productive relationship between staff and machines.

Final word

There is always a story behind the success of a country; and for China, digital trends such as social platforms, widespread use of smartphones, frictionless digital payments, merging of online and offline business models, and automation are powerful forces behind the accelerated growth in China. With a greater population ready to embrace technology changes and China being the home one of the world’s major e-commerce industry players, it’s natural that it has developed faster than most countries.

To take advantage of China’s explosive digital growth, contact Zenlayer today.

To get an in-depth understanding of hosting in China, please see our Hosting in China blog series.