The Startup Journal IX: How the “Internet Plus” strategy affects Chinese people a year after its launch
Last week I joined one billion Chinese traveling across the country to be with our families and celebrate the most important holiday for us, Lunar New Year. In my hometown of Xi’an in central China, I witnessed how the national “Internet Plus” policy has made an impact on ordinary families.
Living in Beijing, the country’s capital, one may take it for granted when a national policy takes place and changes our lives. Last March, China’s premier Li Keqiang announced the “Internet Plus” policy to connect all businesses through the internet and to boost big data, computing clouds and innovation. Since then, millions of apps have mushroomed and on-demand services are dominating every aspect of Chinese life.
I’m one of millions of Beijingers who have gotten used to a convenient life facilitated by a smartphone and various apps. I order clothing and shoes on Tmall, China’s largest e-commerce platform run by Alibaba. Dealers in most Chinese cities can guarantee delivery within three days. A bridesmaid’s dress I ordered on Tmall saved me after an international order on J. Crew failed to come through.
Timesaving is the primary reason I use apps. I order electronics and cosmetics on JD.com, the second largest e-commerce platform in China, because they offer overnight delivery, often for free if the purchase reaches a certain amount. I’ve become a fan of an app called BeeQuick, which delivers fresh fruit to my home in half an hour. I purchased a 10 dollar yearly service for food delivery app Daojia because I can’t resist the warm dim sum and crispy pan-fried dumplings they can deliver to my apartment within an hour.
My belief that I was blessed with such a convenient life because I live in Beijing was proven to be wrong. After I landed in the airport in my hometown and had trouble getting a taxi, my sister advised me to use Uber instead of Didi, which is my favorite ride-hailing app in Beijing and the largest service in China. Apparently, Uber offered big discounts for both drivers and passengers for two weeks during the Lunar New Year holiday, luring many private car owners into becoming Uber drivers in Xi’an.
Almost every app offers discounts. When my sister and I took my niece shopping, I was surprised to find out that you can even use Meituan, the largest group-buying app, to buy ice cream for a eight-year old. We also used apps to book movie tickets and reserve a karaoke session for my family. The experience was superb, because you get your favorite seats and you never need to wait. You’d be foolish not to take advantage of these discounts, my sister said to me.
I realized I had no privilege over those who live in my hometown or perhaps any other Chinese city. Smartphones and apps are everywhere and I’m happy to see how they have made our lives so easy. About 128 million Chinese are using mobile internet, a recent report suggests. Uber claimed that ride-hailing orders in Western China’s Chengdu have become the highest in the world. More than 3.5 million people, one fourth of the city’s total population, are using Uber less than one year after the service entered the city.
However, the real challenge is how internet companies can stay profitable. Analysts have warned that the cash burning wars and endless discounts can kill on-demand services and sharing economy businesses. But if companies are smart enough to keep offering deals at low profit, they can still achieve profitable revenue due to high demand. Look at Alibaba! Its Q3 report at the end of December showed USD 5.3 billion in revenue and a 32% YOY increase, thanks to the seven million sellers on Taobao and the profit from tens of thousands of Tmall sellers adding up from 760 million types of products going to Chinese homes.
Traditions are hard to change, but they can evolve. Chinese won’t miss out on swamping their friends with red envelopes during Lunar New Year. For the superstitious, numbers such as “6”, “8” and “9” will always bring fortune and luck.
WeChat, China’s largest social network with 580 million daily active users, invented virtual red envelopes two years ago. This year, it released a function to give out small amounts of “red envelopes” with lucky numbers: “2.66” stands for blessings in the new year; “8.88” means fortune will find you; “9.99” stands for long-lasting luck.
On Lunar New Year’s Eve, Wechat users sent 8.08 billion “virtual red envelopes” at the speed of 400,000 per second. As for me, I’ve stopped counting how many I’ve given out and how many I’ve received.
This is perhaps the most money given out through an online game in a day. And it gives you happy surprises. When I received a red envelope for RMB 5.20, it made me smile. This number in Chinese sounds like “I love you.”
（All photos from Baidu Images)
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Originally published on AllChinaTech.com.
Wu Nan | @wunanhere | February 15, 2016 06:07 pm
