Digital plan for epidemic recovery covers all industries
Shanghai recently issued its plan to promote development of the online economy, focusing on 12 key aspects such as unmanned factories, industrial Internet, remote work, online finance and digital entertainment.
Under the plan, the new way of doing business is described as “online, intelligent and interactive.” It utilizes new technologies, such as artificial intelligence, 5G, the Internet, big data and blockchain, combining them with traditional sectors such as manufacturing, business finance, culture, education and health care.
The COVID-19 outbreak, which disrupted production and lifestyles, has fueled the development of the online economy. Shanghai authorities now want to harness those gains as a driver of the economic recovery after the pandemic.
“The online economy has accelerating growth, a surprising benefit amid a disaster,” said Wu Jincheng, director of the Shanghai Commission of Economy and Informatization. “It will result in some deep changes.”
Those changes are already underway.
Dingdong, a three-year-old online grocery-shopping platform based in Shanghai’s pilot free trade zone, reported that revenue hit a record 1.2 billion yuan (US$169 million) in February, when the city was experiencing its darkest days of the epidemic.
Many people came to rely on Dingdong to deliver food to their homes. With success under its belt, the company is now expanding into more cities and going beyond just grocery deliveries to give people advice on how to prepare meals at home.
The city’s new plan aims to encourage and promote Dingdong and similar businesses emerging from the crisis.
Its goals for this year are summarized as “100-plus.” They seek to mobilize more than 100 innovative companies with core technologies, intellectual property rights and international competitiveness. They seek 100 applications that can be turned into commercial products.
They seek to develop no less than 100 new brand products, and they seek to achieve breakthroughs in the development of at least 100 key technologies.
A number of platforms for research and development will be established to boost technological innovation in the fields of artificial intelligence, 5G, the Internet, big data and blockchain.
One specific target is to build no less than 100 unmanned factories, unmanned production lines, and unmanned workshops focused on advanced manufacturing models, such as “flexible” manufacturing and cloud manufacturing.
Meanwhile, 20 industrial Internet platforms with national influence will be set up.
Development of online culture and entertainment, such as short videos, livestreaming, online gaming and eSports, is also a highlight in the city’s plan.
According to the plan, other key areas to be boosted include telecommuting, online finance, online exhibitions, fresh food retail sales on e-commerce platforms, contactless delivery, intelligent-connected vehicles, online education, online research and development and online health care.
To ensure practical implementation of the plan’s policies, Shanghai aims to further improve public services, increase regulation monitoring, fine-tune the professional evaluation system for new types of talent such as freelancers, and construct “ecological parks” for the online economy, according to the city’s Commission of Economy and Informatization.
Shanghai’s digital entertainment companies and online retailers are stepping up efforts as demand for virtual forms of shopping and leisure activities increases.
Video and audio platforms are fostering partnerships with other players to carve out new opportunities for growth.
An audio travel guide for Shanghai’s historic sightseeing spots and cultural relics has been unveiled following a partnership between audio book platform Ximalaya and AutoNavi.
Ximalaya is also working with local neighborhoods to set up audio-book libraries in cities like Shanghai and Hangzhou as part of public cultural services.
Bilibili, which used to mostly stream user-generated content, is working with 300 colleges and educational institutions to air online courses. Livestreaming and video formats have been widely used by schools and students during the coronavirus epidemic.
Animation co-production works, overseas licensed content and eSports livestreaming have also produced new revenue streams for Bilibili.
The platform has also attracted gaming firms, manga studios, makers of accessory products and design studios in new business synergies.
E-commerce giants are strengthening their foothold as well. Alibaba's fresh food and grocery site Freshippo is setting up a farm-products processing and dispatch center in Pudong to foster a closer partnership with farming cooperatives and ensure supply of fresh agricultural products.
Online orders at Freshippo and other online food delivery sites surged amid the coronavirus outbreak, and the experience of securing safe and stable meat and produce supplies will continue to channel the company’s focus into the future.
Other online food companies are working with existing vendors to sell pre-packaged meals fit for online delivery.
JD.com’s partners include some 150 eateries that used to offer only dine-in services. One of them, Cheng Huang Miao, an eatery specializing in Shanghai-style dim sum, has developed a frozen food selection that went on sale on JD in early April.
Other smaller regional players, like Miss Fresh, are enhancing delivery capacity to turn new customers into frequent buyers.
JD-backed delivery platform Dada plans to bring livestreaming shows to Shanghai’s TV shopping platforms to promote products and services.
Online health care, literature and education
Online health care, literature and education came to the fore during the COVID-19 outbreak, with Chinese firms exploring new business models and opportunities.
In the race to understand, contain and treat the coronavirus, technology firms like Yitu, SenseTime, Shanghai-l isted Neusoft and HK-listed Ping An Good Doctor have contributed technologies through online medical channels.
The spotlight they cast includes intelligent medical equipment, online consultations, diagnosis by artificial intelligence and treatment by robots.
Daily registered users at Shanghai-based Ping An Good Doctor, which offers online diagnostic services, soared nine-fold during the epidemic.
Its artificial intelligence system, which stores knowledge of about 3,000 diseases and has some 670 million pieces of consultation data, has been certified by the World Organization of Family Doctors, the world’s largest family physician organization.
It’s the first such certification for a Chinese artificial intelligence medical system, the company said.
Online reading and cultural firms have also launched free services and content to consumers forced to stay at home during the epidemic. The participants include museums, libraries, HK-listed China Literature and China Mobile’s Migu services.
In the first quarter, more than 330,000 people tried their hand at authoring online literature.
More than 520,000 new works were published by Shanghaibased China Literature, including 13,000 works from Hubei, the province most severely hit by the virus and strict lockdown.
China Mobile’s Migu services, which provided the popular online broadcasting of the daily progress on the construction of two “pop-up” hospitals in Wuhan, now offer real-time panoramic views of Mount Everest with 5G and virtual reality technologies.
Online education was another surging demand during the
epidemic. Firms like Tencent and SMG provided network and broadcasting resources to establish “on-air classrooms” in Shanghai.
Intelligent and connected vehicles
Shanghai’s new plan to promote the development of digital economy encompasses what is called the “smart mobility sector,” including commercial application of intelligent and connected vehicles.
The plan seeks to expand after-sales automotive services, encourage the development of car-sharing services, explore new modes of transport like robo-taxis and accelerate the creation of a “smart mobility service chain.”
“Shanghai will consider a pilot project to allow intelligent and connected vehicles to do road tests on highways and encourage research and development in the sector,” the Shanghai Commission of Economy and Informatization said. “The city will seek to expand the openness of the auto industry through sharing of road test data.”
The city will also promote itself as a center for projects related to intelligent and connected cars as part of a broader plan to become a world-class automotive center.
Shanghai will conduct pilot projects related to the production and use of high-precision navigation electronic mapping and a reduction in the complexity of driverless vehicles.
It will encourage gas stations to develop new non-contact sales models for refueling and will accelerate the integration of navigation and other service technologies that optimize travel routes through digitalized traffic control and information on traffic conditions.
It will focus on online car-hailing operations to provide users with stable transportation capacity and better service. The city aims to have 1 million car-hailing vehicles within five years.
From 2021 to 2025, the plan calls for the city to build “mobility ecology” and industry chains in fields such as smart charging facilities, repair and maintenance, usage-based insurance and financial leasing.
Banks, financial technology
The COVID-19 pandemic, far from delivering a hit to the online economy, has actually led to significant growth of digital businesses. The number of online payment transactions increased by 47 percent from a year earlier during the period, according to China UnionPay.
Banks, financial technology companies and insurers are riding the crest of this wave by transforming their business models with new technologies.
Shanghai Pudong Development Bank recently launched what it calls the Sweet Orange application, moving its traditional mortgage business online. Customers can conduct house-hunting, file online mortgage applications and enjoy related services like property valuations via their mobile phones.
To better meet the financial needs of small businesses during the COVID-19 crisis, Shanghai Huarui Bank offered short-term revolving loan products for small e-commerce operators, allowing flexible re-payment plans.
With big data, the bank can calculate the value of such small companies and grant them floating-loan quotas in tandem with their logistics platforms, giving real-time access to storage, logistics and sales data.
Shanghai Shuhe Information Technology, a financial technology firm focusing on consumer credit, is a pioneer in promoting digital finance. Leveraging artificial intelligence technology and data analytics, it assists banks, insurers and consumer finance companies to serve the diverse needs of emerging prime borrowers, who are generally young, well-educated and underserved by traditional financial institutions.
China’s online finance has matured a lot in the last 15 years, but the industry still has big growth potential, the company said.
The Shanghai government’s new online-development policy will help tap that potential and continue the explosive growth of contactless financial services triggered by the pandemic, it added.
The insurance sector also is embracing new technologies to deliver better customer services. China Continent Insurance unveiled contactless online claims for car owners, allowing policyholders to use the insurer’s mobile application. On-site applications can be handled through audio and video technology within five minutes, delivering compensation within one hour.
The number of cases handled online almost doubled during the pandemic, China Continent said.
With just one click on their mobile phones, car owners can renew their vehicle insurance contracts, Ping An P&C Insurance’s Shanghai branch said. The company had more than 67 percent of its policies approved online after the pandemic.
Using big data and artificial intelligence, ZhongAn Online P&C Insurance said its intelligent customer service robot, named ZhongAn Spirits, has served nearly 500,000 users online since the outbreak of the epidemic.
Advanced manufacturing, cloud manufacturing and shared manufacturing
Factories operated by robots are among the 12 key sectors of the Shanghai government’s plan to promote development of the digital economy.
The plan proposes to build more than 100 “unmanned” factories, production lines and workshops in Shanghai, focusing on new manufacturing modes such as advanced manufacturing, cloud manufacturing and shared manufacturing.
The business model already existed before the COVID-19 pandemic, but its importance and potential starkly came into focus during a period when workers were in short supply.
Unmanned factories don’t mean the entire elimination of human workers, but rather the use of robots in dangerous, repetitive, dirty or risky jobs, freeing humans to focus on more creative, rewarding and decision-making tasks.
Swedish robotics and electronic equipment company ABB, a giant in industrial automation, said in a written interview that the factory of the future will be highly automated and operate in a way that taps the advantages of both humans and robots.
Smart manufacturing is the purpose of building so-called unmanned factories, said Xiao Weirong, head of B&RChina, an arm of the Austrian-based B&RIndustrial Automation, but such factories cannot operate without human input.
“The coexistence of humans and machines is the basis for industrial automation,” He explained. “Smart manufacturing means humans and machines cooperating harmoniously.”
In plain words, that means humans doing things suitable for humans and machines doing things suitable for machines.
For example, at ABB’s robotics factory in the Shanghai suburb of Kangqiao is one of the world’s largest, most advanced factories, where robots make robots.
It still has a workforce of humans involved in some manufacturing elements, research and development, and technical support.
Not only will the factory need people, but those people will have work that is more challenging and less tedious and strenuous.