The rise of the digital economy amid COVID-19

Though the number of in-store customers has been curtailed due to COVID-19, shops at the Haining Leather Center in Hangzhou, eastern Zhejiang Province, have seen orders going up by a staggering number, as they drum up their businesses online.

Haining was among the first retail malls in 2018 to sniff the potential in the digital marketing strategies brought by e-commerce giant Alibaba, and the mall’s timely response to the latest livestreaming craze has provided a lifeline to retailers crippled by the epidemic.

“Up to 80 percent of business owners on this floor, for example, are selling products via livestreaming, and sold items often pile up on the floor for delivery every day,” said Shen Songying, a Haining merchant and a clothing factory owner.

Shen said it was not uncommon for her and other sellers to suffer from mounting excess inventory before.

However, things began to turn around right after digital marketing was introduced to boost sales in the mall. “Based on back-end sales data and customer feedback, I now know exactly what products are in vogue so that my production and sale plans are more customer-targeted,” said Shen, adding that she does not worry about a collapse in sales during the coronavirus period.

While most customers are trapped at home to prevent the spread of coronavirus, the demand for online shopping has soared, making the digital economy a new driving force in the country’s economy.

According to the National Bureau of Statistics, online retail sales of physical commodities in this period nationwide totaled over 1.85 trillion yuan (US$261.8 billion), up 5.9 percent year on year, accounting for 23.6 percent of the total retail sales of consumer goods.

Leading Chinese artificial intelligence company Iflytek Co Ltd said the demand for online education and telemedicine has surged amid the epidemic. The company has offered online education service to over 15 million students and teachers from more than 6,500 schools across China, said Liu Qingfeng, its chairman.

According to Wu Hao, a National Development and Reform Commission official, the epidemic made business owners further realize the great benefits of digital transformation while technologies such as big data, mobile payment and e-commerce have played essential roles in the resumption of work and business.

Traditional industries have also stepped up efforts to follow the trend. Liuguo Chemical Industry in Tongling City, east ern Anhui Province, has used cloud data, internet of things and intelligent algorithms to calculate material usage since 2018 and has stood out among the industry’s phosphorus fertilizer compound producers.

“We now save about 6,000 tons of phosphate rocks per year and increased our economic benefits by 6 million yuan,” said Ma Jian, general manager of Liuguo.

Figures from the China Academy of Information and Communications Technology showed that the value-added output of China’s industrial internet sector will likely reach 3.1 trillion yuan in 2020, accounting for 2.9 percent of gross domestic product.

Meanwhile, policies will be put forward to promote the digital transformation of key industries, and the construction of new digital infrastructure will be sped up to facilitate the development of 5G, data centers and industrial internet, the Ministry of Industry and Information Technology said.