Life services set to benefit from digital platforms

HelloRF

Digital platforms will play a critical role in encouraging new life services, and a number of innovative business models are set to take shape in the city, according to industry executives and city officials.

Life services cover a wide range of industries that are different from those selling physical goods, and most common service providers include restaurants, tea houses and coffee shops as well as beauty salons, automobile dealerships and etc. 

Zhou Lan, deputy director of the Shanghai Commerce Commission, said the city aims to create demonstration projects that integrate life services with digital platforms to cater to city residents' needs. 

"We encourage digital platforms to come up with new formats to help the development of innovative life services," Zhou said at the China Life Services Chain Brands Summit on Tuesday. 

Influential online platforms have transformed commercial services and helped enhance the digital operation level of life service industries to better cater to consumer demand, she noted. 

For example, a series of new measures were unveiled last year to support small breakfast vendors with new business formats that fully leverage digital capabilities and target pick-up-and-go breakfast for office workers and commuters in the city.

Wang Lei, vice president and head of Alibaba's Lifestyle Services Unit, said he sees big potential in the online transaction size of brick-and-mortar services as online platforms help link with various kinds of lifestyle services. However, he said, digital platforms need to enhance their operational capabilities to help serve more merchants and a wider range of customers, including the elderly. 

Digitalization efforts helped offline service providers enhance operational efficiency, but industry executives also point to the drawbacks of lifestyle service operators.

The proportion of chain stores among top life service providers has remained relatively low due to lack of talent and relatively high operation costs. 

Life services chain stores have been encouraged to fully use digital capabilities to tackle challenges such as loss of physical store shoppers due to subsidies and discounts offered by Internet giants, according to China Chain Store & Franchise Association chairman Pei Liang.  

He also called for a fair and open playing field and more incentives for chain store operators that strictly follow industry regulations.