District emerging as a new hub for online economy
The COVID-19 pandemic has reshaped people's way of life and many of the world's industries. People work from home, shop online and even travel in cyberspace with the aid of artificial intelligence and 5G networks.
Modern manufacturing, finance and entertainment industries have become deeply woven into a giant invisible net that has formed the new "online industry" in China.
Songjiang is emerging as a new hub for this online economy, with the district recently announcing it will establish a Digital Business and E-commerce Alliance through a series of preferential policies for small- and medium-sized Internet-based enterprises.
The 5808 Livestream Center is a new hub for young digital companies, providing them with shared facilities, such as livestream studios, product showrooms, training classrooms and multi-media workshops.
Shanghai Duoyi Furniture Co Ltd, one of the district's pioneer businesses, operates its livestream studio 12 hours a day to pull in more sales.
The company, which registered in Xinqiao Town 12 years ago, has expanded into one of China's biggest wood furniture makers and designers. Its signature brand "Yuanshi Muyu" has more than 10 million followers on its Tmall flagship store on Taobao, China's largest online shopping platform.
Over the past two years, Duoyi has set up sales channels on many more digital platforms, such as JD.com, VIP Shop, Douyin and Bilibili.
"We've hired livestreamers, directors and digital operation specialists for different platforms," said Shi Lin, Duoyi PR director. "Each new channel has had a 20 percent rise in sales every year."
At the same time, the company is opening offline stores across the country to give customers a more physical shopping experience.
During this year's 618 shopping festival, the sales of Yuanshi Muyu products exceeded, within four hours, the total of last year's Double 11 festival sales, eventually banking a 62 percent increase.
The Songjiang-grown beauty brand Lin Qingxuan shifted to digital sales just in time during the initial pandemic outbreak in early 2020.
In the citywide lockdown in Shanghai in April and May this year, the brand's sales unexpectedly rose by 12 percent and 15.9 percent respectively, thanks to online retailing.
Snacks brand LYFEN also carved out its national foodie map on digital platforms, operating almost 100 livestream shows on Douyin and Kuaishou during the 618 festival.
Set up in 2017 in Yongfeng Community, Shanghai Chaojiu Network Technology Co Ltd was one of the earliest digital adopter companies to pick up on the online shopping trend.
It has opened many livestream studios on Tmall, JD.com and Pinduoduo, and its several "hottest-hits" items have generated sales volumes in the millions.
"Warehousing, sorting and distribution are important to the e-commerce industry chain," said the director Chen Qibu. "We promise fast delivery to ensure that purchased products will be sent out at the first opportunity to improve the shopping experience of our customers."
Company data reveals that, since 2020, the entire e-commerce industry has expanded, but the growth rate has slowed by 20 to 30 percent compared with previous years. With many big and international brands starting their own digital sales channels, companies like Chaojiu sensed a crisis and sought alternatives.
It opened new stores on Douyin and WeChat Video to start livestream business and last year released a new dark chocolate brand which achieved 800,000 orders in the Douyin online shop in just three months.
Sales of the new brand hit 30 million yuan (US$4.2 million) on all of Chaojiu's digital channels. It would have been a miracle for the company to achieve a daily sales volume of more than 150,000 orders without an offline store.
"With insight gained into consumers' needs through big data analysis, we've created new growth points through powerful marketing," Chen said.
Many small- and medium-sized enterprises, however, might not be as capable as Duoyi and Chaojiu to run online operations by themselves.
The good news is Songjiang is building a string of incubation bases to foster such e-commerce start-ups to support the new online economy.
The 5808 Livestream Center in Dongjing Town is a new hub for young digital companies, providing them with shared facilities, such as livestream studios, product showrooms, training classrooms and multi-media workshops.
The upstream and downstream companies, including broadcast agencies and multi-channel network institutions that produce livestreamers and key opinion leaders, are also settling into the base.
Shanghai Fenglei Network Technology Co Ltd works as an intermediary to match the needs of brands with relevant livestreamers, enabling the parties to find each other at low cost. So far, Fenglei represents more than 7,000 brands which have 100,000 stock keeping units (SKU) and is cooperating with about 30,000 livestreamers.
A showroom of Shanghai Duoyi Furniture Co Ltd for its online shops
Shanghai Haishan Culture Media Co Ltd is a KOL incubator with nearly 10,000 livestreamers.
"Currently, they are giving talent shows online to get traffic and attract followers," said Liu Minglang, general manager of the 5808 center, recently approved as one of Shanghai's first batch of livestream and e-commerce bases.
"Next, we will start livestreaming to sell products, mainly made in Songjiang," Liu said.
Songjiang achieved 108 billion yuan worth of online retail sales last year, up 16.1 percent year on year and ranking the sixth in the city. The growth continues to be stable despite the affects of this year's pandemic lockdowns, evidence of the vitality of the new online economy.
"It has great potential, and is sure to become a strong economic engine in the post-Covid era," said Chen Chao, director of Songjiang Economic Commission.
The newly established Digital Business and E-commerce Alliance is aimed at promoting the online new economy, and sharing resources with companies in the industry.
The government has also vowed that e-commerce enterprises which settle in Songjiang and meet relevant requirements could enjoy an initial start-up grant worth from 1 to 2 million yuan.
Companies or institutions that make tangible contributions can be eligible for a one-time subsidy of up to 200,000 yuan, and an additional bonus ranging from 400,000 yuan to 800,000 yuan.
