For a long time, China had been called the world’s factory for manufacturing and assembly – which seems to be unrelated to creativity.

However, Chinese information technology has grown at an amazing speed in recent decades and has taken over industries like mobile payment, ecommerce, express service and online investment products.

What should you know about China’s booming technology?

China is in first place for 'new retail' 

New retail is a term coined by Jack Ma of Alibaba and describes "the integration of online, offline, logistics and data across a single value chain." Customer profiles will be more accurate and individualized than they ever were, in order to provide highly personalized purchasing advice or options. 

A good example is Hema supermarket, Alibaba’s own futuristic offline grocery store, which is a benchmark of new retail. First of all, Hema choose their sites by analyzing the number of active users of Alipay and their purchasing power, which was quite different from traditional site selecting processes.

Hema also establishes customer information through Wi-Fi probe and RFID, obtaining customers’ age, gender, shopping preference and shopping frequency. And this information will be reflected to the offline store operating system and purchasing team, who will have a better understanding of customer demands and replenishment frequency. 

Big data is used in procurement and commodity placement. Wheras traditional supermarkets place the commodities by category, Hema arranges them by scenario in order to generate linkage sales and target consumer demand. For example, based on statistics, customers are inclined pick wanton, noodles, dumpling and porridge in one breakfast purchase. Hema therefore arranges these commodities at one place to establish related commodity system. For dinner, on the other hand, customers are inclined to buy semi-finished vegetable and finished keeping, so Hema adjusts the procurement time and structure based on customer preference. 

Alibaba’s 'new retail' is not the only concept pushing Chinese retail into the future. Tencent, for example, has also been active in the new retail battle. On November 8th, 2017, Tencent officially announced its “Smart+” strategy with the “Tencent Cloud” platform establishing a smart ecosystem covering retail, finance, logistics, marketing, communication, etc. in a decentralized way. It also collaborates with JD and VIP in strategic partnerships in order to compete against Alibaba. 

Tencent aims to empower retailers with the latest big data, cloud computing and AI technology. At the same time, existing WeChat functions such as official accounts, mini programs and WeChat Pay already support retail merchants. For instance, with the help of WeChat Pay and big data analysis, merchants can better understand their target consumers, and customize messages and promotions quite precisely. With mini programs, merchants can merge shopping experiences and output services of online and offline retail in a seamless manner.

JD, a Tencent partner and the second largest ecommerce platform in China, raised a new concept named 'unbounded retail' in October 2017. Similar to the 'new retail' concept, 'unbounded retail' with a database that unifies consumer insights and experiences. For example, coupons released by JD can be used in the brand’s online JD store, WeChat stores, as well as offline stores.

Consumers’ memberships and corresponding discounts can also be converted freely online or offline. This creates a seamless consuming experience in diverse channels, and help brands connect with target consumers in a more effective way.

China leads the world in mobile payment

Probably the most important thing you must know is that China leads the world in mobile payment, and it has been a pervasive payment method in Chinese daily life. Today, WeChat Pay and Alibaba’s Alipay occupy over 90% share of China’s mobile payments.

Driven by the two mobile payment giants, China is gradually transforming from a heavily cash-based society to a largely cashless one. The transaction volume of mobile payment in China reached 90 trillion USD in 2016, which was nearly 80 times higher than the U.S. (1.12 trillion USD). 

The Chinese population uses mobile payment to purchase all kinds of tickets (movies, trains, flights), utility bills, to complete offline payments, transfer from banks or to friends, to give virtual red packets and so on. Brands can also set up set up their own WeChat Pay account or Alipay account, allowing customers to pay vendors via their wallet by scanning a QR code or showing their unique payment code. This is quick and simple for customers and vendors, which has evidently revolutionized the payment habits of Chinese consumers. 

Recently, mobile payment was tested in new areas and has become an increasingly important payment method in China. For example, with the upcoming Spring Festival travel rush, 38 ticket windows at the Xi'an railway station apply WeChat payment. Citizens can scan bus codes with WeChat Pay or Alipay to take buses in 11 cities in China, such as Guangzhou, Qingdao, Hefei, etc.

Moreover, it is worth mentioning that HSBC officially cooperates with WeChat Pay. This relationship not only provides customers of HSBC with another payment option, but also broadens the channel of WeChat Pay service. Besides HSBC, WeChat Pay is also available for online purchases with overseas cards like Visa, Master card and JCB. 

VR and AR are popularly used in Chinese business 

The prospect of VR and AR is intriguing. In China, more and more brands use VR and AR technology in marketing campaigns in order to improve user experience and attract customers.

Tmall pop-up stores – selling product categories such as fashion, cosmetics, household – have used advanced RFID (radio-frequency identification) and AR technology to allow customers access to product information via “Cloud Shelf”, “try on” products with the virtual mirror, and pay with Alipay directly by scanning the QR code. 

Yili, a Chinese dairy product brand, applied AR to their brand's promotion. Yili encouraged customers to scan the product with the Baidu app and watch a AR video about safety education. Its competitor Mengniu also provides consumers with VR videos to vividly experience the process of milk production. 

China stays ahead in the sharing economy

The sharing economy has become a vital part of life in China. Chinese people share bikes, parking lots, umbrellas, portable chargers, etc. Car owners can easily find a sharing parking space with their smartphones and can share their idle parking spaces with others to earn rent.

Bike sharing is widely exposed to customers thanks to the perfect combination of intelligent locks with smartphones and social media. After downloading the app or opening the app from the WeChat mini program, users can sweep the QR-code on the bike with their smartphones to unlock the bike. Each bike has GPS for users to locate and easily find other bikes nearby. After each ride, users can park the bike in any parking area without docks, lock the bike and pay the rent with WeChat Pay or Alipay. This bike sharing practice allows for a convenient and environmentally friendly lifestyle.

By December 2017, the total amount of bike sharing domestic users has reached 221 million, with growth at 108.1%. Ofo and Mobike are the two largest bike sharing companies in China and achieve a large part of the market share. They have covered 160 cities in China. As of 2017, Ofo is valued at $3 billion and has over 26.8 million monthly active users. Mobike is valued at $3 billion and has over 24.4 million monthly active users.

This bike-sharing concept also entered 21 overseas countries like Singapore, the United States and Japan. Bike sharing is becoming fashionable as part of a sustainable lifestyle in the future, and the sharing economy is definitely presenting in more diverse forms.

China is rapidly developing AI

China is rapidly developing in AI (artificial intelligence). AI is set to reshape various existing industries and has triggered a new round of IT equipment investment. 

In Shenzhen China, there are an increasing number of companies focused on AI. Tencent not only focuses on internet-related services, but it also established an AI lab officially in Apr 2016. Its research area includes computer vision, speech recognition, natural language processing and machine learning.  

DJI, well known by the public for its UAV (unmanned aerial vehicle), also works with computer vision, to allow for UAV control and automatic pathfinding. For example, the new Phantom 4 is able to predict obstacles in a real environment and follow an object. 

UBTECH, a company focusing on AI and humanoid robots, developed and showcased robot Alpha on Chinese Spring Festival gala in 2016. The company's humanoid service robots assist with science and technology education. These new technologies prove that China is going to be a powerful force in future AI development.

Econsultancy subscribers can download our guides to Baidu and WeChat.

Ashley Galina Dudarenok

Published 1 March, 2018 by Ashley Galina Dudarenok

Ashley Galina Dudarenok is a China marketing expert, best selling author and keynote speaker, and founder of ChoZan & Alarice. You can get a copy of her book "Unlocking the World’s Largest E-Market: A Guide to Selling on Chinese Social Media” on Amazon, watch her vlog on YouTube or sign up for her newsletter at

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