Page 316 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
under control. Retail sales growth slowed to 2.5% months-long probe into its business operations.
from 2020, much lower than the 7% estimate in Antitrust measures are a worldwide trend and
a Bloomberg survey of economists, as consumers the ultimate purpose is to leverage legal tools
cut back on spending during the summer holiday to restore fair and effective competition in the
break. China introduced tougher new curbs on market. It's not targeting the e-commerce sector
travel to squash an outbreak of the delta variant per se but the monopolistic behaviors in general.
from late July 2021, leading restaurant & catering Anti-monopoly supervision over these tech giants
sales to contract 4.5% in August from a year didn't cause them to lose core competence,
ago after climbing 14.3% in the previous month. but helped them to stimulate innovation and
While China quickly brought the outbreak under entrepreneurship and, at the same time, restore
control, a new virus cluster developed in southern market confidence. With enhanced regulation
China that, suggesting consumers will continue to of the market, experts forecast new models
remain cautious (Bloomberg). will take shape and chart the future course of
e-commerce. Hyperlocal retail — location-based
Background omnichannel sales of goods —may become
brands' new battleground to win and retain
E-commerce was a term largely unheard of two customers over the next decade. Residents
decades ago, but today it is one of the pillars of of cities in different tiers with varying levels
the Chinese economy. The Chinese e-commerce of socioeconomic development have varying
market is forecast to enjoy a compounded preferences in hyperlocal retail channels. While
annual growth rate of 12.4% between 2021 and people in Beijing and Shanghai favor on-demand
2024 to reach US$3 trillion. The initial thrust of service like the one-hour delivery offered by
e-commerce takeoff was to make up for China's the likes of Alibaba's Freshippo, those in lower-
relatively underdeveloped retail infrastructure tier cities see community group-buying as a
compared with the West. It turns out, however, more desirable choice, because it promises
that the sector is turbocharging retail growth lower prices, thanks to the bulk purchases of
with such robustness that it has effectively merchandise by a group of people (He).
catapulted the country to the world's top retail
market. The decade of 2001 to 2010 witnessed China’s technological advances have helped
the rapid transition of retail from traditional retail sales in other ways as well. As of the
mom-and-pop stores to hypermarket chains, beginning of 2021, China is home to over
whereas the massive digitalization leapfrog from 73,000 enterprises involved in unmanned
2011 to 2020 was characterized by merchants economy. Among them, 33% are wholesale and
and brands flocking to establish virtual stores. retail companies, 28.8% are research and tech
Mention e-commerce and one cannot afford service companies, and 3.6% are manufacturing
to miss Alibaba Group Holding Ltd, whose companies. New technologies represented
innovative array of gameplays is definitely by 5G, AI, the industrial internet and the
rewriting China's, and even the world's, retail Internet of Things have given a strong boost
playbook. Alibaba's Taobao started out as an to the development of unmanned economy,
obscure site in 2003, aiming to facilitate cross- making economic activities and living smarter.
border trade among bulk merchants. Its aim Unmanned economy enjoys broad development
was to connect a horde of individual business prospects as it meets consumers’ individual
owners with the vast number of Chinese needs, improves efficiency and reduces costs. For
customers looking for cost-effective deals. Any example, unmanned shelves, similar to vending
sector enjoying skyrocketing growth could hit a machines, have been put into use in office
rough patch, and e-commerce is no exception. buildings in many cities. Consumers can use
Malpractices like abusing monopolistic positions their smartphones to scan a QR code on a shelf
to crowd out new players are now under scrutiny, to pay for goods. During China’s fight against the
with the country's antitrust regulators imposing COVID-19 epidemic, new contactless services,
a record fine on Alibaba in April 2021 following a such as unmanned retailing and delivery, have
played their role (PDO).
316
under control. Retail sales growth slowed to 2.5% months-long probe into its business operations.
from 2020, much lower than the 7% estimate in Antitrust measures are a worldwide trend and
a Bloomberg survey of economists, as consumers the ultimate purpose is to leverage legal tools
cut back on spending during the summer holiday to restore fair and effective competition in the
break. China introduced tougher new curbs on market. It's not targeting the e-commerce sector
travel to squash an outbreak of the delta variant per se but the monopolistic behaviors in general.
from late July 2021, leading restaurant & catering Anti-monopoly supervision over these tech giants
sales to contract 4.5% in August from a year didn't cause them to lose core competence,
ago after climbing 14.3% in the previous month. but helped them to stimulate innovation and
While China quickly brought the outbreak under entrepreneurship and, at the same time, restore
control, a new virus cluster developed in southern market confidence. With enhanced regulation
China that, suggesting consumers will continue to of the market, experts forecast new models
remain cautious (Bloomberg). will take shape and chart the future course of
e-commerce. Hyperlocal retail — location-based
Background omnichannel sales of goods —may become
brands' new battleground to win and retain
E-commerce was a term largely unheard of two customers over the next decade. Residents
decades ago, but today it is one of the pillars of of cities in different tiers with varying levels
the Chinese economy. The Chinese e-commerce of socioeconomic development have varying
market is forecast to enjoy a compounded preferences in hyperlocal retail channels. While
annual growth rate of 12.4% between 2021 and people in Beijing and Shanghai favor on-demand
2024 to reach US$3 trillion. The initial thrust of service like the one-hour delivery offered by
e-commerce takeoff was to make up for China's the likes of Alibaba's Freshippo, those in lower-
relatively underdeveloped retail infrastructure tier cities see community group-buying as a
compared with the West. It turns out, however, more desirable choice, because it promises
that the sector is turbocharging retail growth lower prices, thanks to the bulk purchases of
with such robustness that it has effectively merchandise by a group of people (He).
catapulted the country to the world's top retail
market. The decade of 2001 to 2010 witnessed China’s technological advances have helped
the rapid transition of retail from traditional retail sales in other ways as well. As of the
mom-and-pop stores to hypermarket chains, beginning of 2021, China is home to over
whereas the massive digitalization leapfrog from 73,000 enterprises involved in unmanned
2011 to 2020 was characterized by merchants economy. Among them, 33% are wholesale and
and brands flocking to establish virtual stores. retail companies, 28.8% are research and tech
Mention e-commerce and one cannot afford service companies, and 3.6% are manufacturing
to miss Alibaba Group Holding Ltd, whose companies. New technologies represented
innovative array of gameplays is definitely by 5G, AI, the industrial internet and the
rewriting China's, and even the world's, retail Internet of Things have given a strong boost
playbook. Alibaba's Taobao started out as an to the development of unmanned economy,
obscure site in 2003, aiming to facilitate cross- making economic activities and living smarter.
border trade among bulk merchants. Its aim Unmanned economy enjoys broad development
was to connect a horde of individual business prospects as it meets consumers’ individual
owners with the vast number of Chinese needs, improves efficiency and reduces costs. For
customers looking for cost-effective deals. Any example, unmanned shelves, similar to vending
sector enjoying skyrocketing growth could hit a machines, have been put into use in office
rough patch, and e-commerce is no exception. buildings in many cities. Consumers can use
Malpractices like abusing monopolistic positions their smartphones to scan a QR code on a shelf
to crowd out new players are now under scrutiny, to pay for goods. During China’s fight against the
with the country's antitrust regulators imposing COVID-19 epidemic, new contactless services,
a record fine on Alibaba in April 2021 following a such as unmanned retailing and delivery, have
played their role (PDO).
316
