China’s Digital Market: How it Combats the Economic Consequences of the Coronavirus

China’s Digital Market: How it Combats the Economic Consequences of the Coronavirus

May 5, 2020 Comments Off on China’s Digital Market: How it Combats the Economic Consequences of the Coronavirus By The Incorp China Team

Even before the surge of Coronavirus cases and the world going into lock down, the digital market in China has been on the rise, and more dynamically than most nations around the world. Such systematic progression is rooted in the country’s core business model as well as the business environment created by China’s rapid growth.

Using their business environment as an example, we can more readily anticipate business trends and opportunities that will arise in this age of digital business.

From the beginning of the outbreak to the present, China has been unknowingly prepared for the change from physical work environments to the shift into a predominantly remote working business model. The growth of technology-based companies such as Tencent, Alibaba, and Huawei, as well as the integration of apps such as WeChat and Weibo into their daily life has put the Chinese economy ahead of the curve in the shift towards a digital business framework. The convenience afforded by the systems in place allow more remote services to be provided to the everyday consumer. This addresses the issue of public quarantine that’s present in most countries in the world.

In most regions of the world, retail and physical services providers have suffered economic losses. Countries are seeing record loss in sales and activity. These detrimental short-term effects could ripple out into long lasting issues if proper action is not taken. We can look at how the majority of the china market operates to see how business as a whole can come out of this pandemic stronger and more resilient than ever.

Looking at China’s business models we see that compared to the rest of the world, they rely mostly on remote access work sites as well as a more digital work environment. This is not only seen in service provider industries but also providers of physical goods. In many places in China  customers can have services brought right to your door with a simple press of a button. Following this, restaurant models even allow for customers to enter public establishments and sit alone, order from their mobile devices, and have food brought out to them automatically, without human interaction. These business models allow for the everyday person to go about daily routines without jeopardizing the safety of others. This example aside, China shows how their digital economy can be a success and comeback story for the rest of the world.

To fully grasp the effects of China’s digital market, this following diagram provided by McKinsey&Company.

Analysing the graph, it becomes apparent that China has capitalized heavily on the digital market since the popularization of smartphones globally. They have a vast share of their economic activity coming from mobile transactions as opposed to other forms of transactions. Finally, it is quite visible that they are gaining on the US economy in terms of start-up activity, and these estimates are guaranteed to have grown over the past few years.

The key takeaway here is that the rest of the world has much to learn about integrating technology and shifting their business into a more digital format. Another way to take advantage of China’s digital market and to come out on top after this pandemic is to capitalize on the network. China’s digital market runs on its own servers, and plays by its own set of rules.

China has something colloquially known as “The Great Firewall of China” which in essence allows for government controlled access of the internet available in China. As such, companies like Google have limited to no access, not allowing their indexes to be accessed by those living in china. To set up an online presence in China and be indexed by companies such as Baidu requires what is known as an Internet Content Provider License, or an ICP license. These licenses have become in such high demand as more and more companies attempt to break into the highly profitable Chinese market. Incorp China, has specialized experience in engaging with Alibaba, Tencent and other digital service providers involved in the Chinese digital market. This experience will help streamline the acquisition of ICP licenses. If you have any inquiries, feel free to contact us more about the subject.

Let us help you break through The Great Firewall of China and get inside their digital market.

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