Page 358 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
5.4% higher than the same occasion in 2019, coronavirus pandemic. This market is forecast to
indicating the sector is returning to pre-COVID-19 be worth about 104 billion RMB (US$16 billion) in
levels, tax data showed. The sales revenue of the 2021, up 38% from 2020, according to consultancy
sector soared by 358.4% during the Feb. 11 to Feb. China E-commerce Research Centre. Hailed by tech
17 period from the Spring Festival holiday in 2020, companies as a way to cut out the middleman by
which had been hit by the country's rapid and connecting food suppliers directly with consumers,
massive response to prevent and control COVID-19, community group buying operations have all the
according to the value- added tax data released by hallmarks of “blitz scaling” – an aggressive growth
the State Taxation Administration. In the wholesale model that sacrifices profits in the short term to
and retail sectors, sales revenue rose by 27.9% acquire more users. China’s state media, however,
during the holiday from the previous Spring Festival has denounced the group buying industry’s cash
break, the data showed. In the culture, sports and burn strategy as a number of start-ups have either
entertainment sectors, the sales revenue rose by filed for bankruptcy or reduced operations amid
117.1%. Of these, the cultural and art services went the financial hardship caused by their “subsidy
up by 111.6%, entertainment services expanded wars” to seize market share. That commentary
by 128.7%, sports services rose by 77.4%, and the from the Economic Daily, a newspaper directly
tourism and entertainment services climbed 57.4%. under the Central Committee of the Chinese
Consumer spending in large cities has increased Communist Party, followed news that community
remarkably. For example, consumer spending rose group buying provider Nice Tuan, which is backed
by 44.2% in Beijing, 32% in Shanghai and 31.1% by Alibaba, ceased operations in multiple cities
in Guangdong (including Shenzhen) during the in August. On-demand local services provider
holiday, the data showed (Xinhua, China’s Catering Meituan, agriculture-focused e-commerce firm
Sector Bounces Back During Holiday). Pinduoduo and ride-hailing giant Didi Chuxing are
among the Big Tech companies that compete with
Food Delivery various start-ups in the community group buying
market segment (Zhang).
Chinese e-commerce giant Alibaba Group
Holding is doubling down and escalating its Drones
community group buying operations through a
new brand called Taocaicai, as competition in Chinese food delivery behemoth Meituan
this growing retail market segment intensifies announced its partnership with the local government
amid Beijing’s tightened regulation. Consumers of Jinshan district in east China’s Shanghai to build
can access Taocaicai, where they can find more a demonstration center for drone deliveries at
than 1 million products from around the world, the 2021 World Artificial Intelligence Conference
on the homepage of shopping platform Taobao held in the metropolis on July 8. The center will run
Marketplace and the Taobao Deals’ app. It will work pilot operations for an urban logistics network for
closely with Alibaba’s smart logistics operation low altitude unmanned aerial vehicles. It’s the first
Cainiao Network and food delivery service Ele.me, time that the company revealed details of its drone
according to a company statement. A latecomer in delivery network, which will ensure that each drone
China’s community group buying market, Alibaba’s can send an order to a destination within a radius
foray in March 2021 was pursued under a team of three kilometers in 15 minutes. The network is
called MMC. This led to the integration of Alibaba’s expected to be used in various scenarios including
business-to-business platform Lingshoutong, residential communities, shopping malls and office
which connected small family-run retailers and buildings. The goal is that drones and couriers would
gave their businesses a tech upgrade, with the work seamlessly together to deliver orders. Meituan
firm’s community group buying enterprise Hema started to explore drone delivery opportunities in
Jishi. Taocaicai was established from the merger 2017. In early 2021, the company’s drones delivered
of Hema Jishi and Taobao Grocery. Alibaba’s latest meals to customers in Shenzhen, south China’s
move shows that community group buying remains Guangdong province, for the first time. Meituan also
a hot business model in mainland China amid the used drones to deliver needed supplies to residents
358
5.4% higher than the same occasion in 2019, coronavirus pandemic. This market is forecast to
indicating the sector is returning to pre-COVID-19 be worth about 104 billion RMB (US$16 billion) in
levels, tax data showed. The sales revenue of the 2021, up 38% from 2020, according to consultancy
sector soared by 358.4% during the Feb. 11 to Feb. China E-commerce Research Centre. Hailed by tech
17 period from the Spring Festival holiday in 2020, companies as a way to cut out the middleman by
which had been hit by the country's rapid and connecting food suppliers directly with consumers,
massive response to prevent and control COVID-19, community group buying operations have all the
according to the value- added tax data released by hallmarks of “blitz scaling” – an aggressive growth
the State Taxation Administration. In the wholesale model that sacrifices profits in the short term to
and retail sectors, sales revenue rose by 27.9% acquire more users. China’s state media, however,
during the holiday from the previous Spring Festival has denounced the group buying industry’s cash
break, the data showed. In the culture, sports and burn strategy as a number of start-ups have either
entertainment sectors, the sales revenue rose by filed for bankruptcy or reduced operations amid
117.1%. Of these, the cultural and art services went the financial hardship caused by their “subsidy
up by 111.6%, entertainment services expanded wars” to seize market share. That commentary
by 128.7%, sports services rose by 77.4%, and the from the Economic Daily, a newspaper directly
tourism and entertainment services climbed 57.4%. under the Central Committee of the Chinese
Consumer spending in large cities has increased Communist Party, followed news that community
remarkably. For example, consumer spending rose group buying provider Nice Tuan, which is backed
by 44.2% in Beijing, 32% in Shanghai and 31.1% by Alibaba, ceased operations in multiple cities
in Guangdong (including Shenzhen) during the in August. On-demand local services provider
holiday, the data showed (Xinhua, China’s Catering Meituan, agriculture-focused e-commerce firm
Sector Bounces Back During Holiday). Pinduoduo and ride-hailing giant Didi Chuxing are
among the Big Tech companies that compete with
Food Delivery various start-ups in the community group buying
market segment (Zhang).
Chinese e-commerce giant Alibaba Group
Holding is doubling down and escalating its Drones
community group buying operations through a
new brand called Taocaicai, as competition in Chinese food delivery behemoth Meituan
this growing retail market segment intensifies announced its partnership with the local government
amid Beijing’s tightened regulation. Consumers of Jinshan district in east China’s Shanghai to build
can access Taocaicai, where they can find more a demonstration center for drone deliveries at
than 1 million products from around the world, the 2021 World Artificial Intelligence Conference
on the homepage of shopping platform Taobao held in the metropolis on July 8. The center will run
Marketplace and the Taobao Deals’ app. It will work pilot operations for an urban logistics network for
closely with Alibaba’s smart logistics operation low altitude unmanned aerial vehicles. It’s the first
Cainiao Network and food delivery service Ele.me, time that the company revealed details of its drone
according to a company statement. A latecomer in delivery network, which will ensure that each drone
China’s community group buying market, Alibaba’s can send an order to a destination within a radius
foray in March 2021 was pursued under a team of three kilometers in 15 minutes. The network is
called MMC. This led to the integration of Alibaba’s expected to be used in various scenarios including
business-to-business platform Lingshoutong, residential communities, shopping malls and office
which connected small family-run retailers and buildings. The goal is that drones and couriers would
gave their businesses a tech upgrade, with the work seamlessly together to deliver orders. Meituan
firm’s community group buying enterprise Hema started to explore drone delivery opportunities in
Jishi. Taocaicai was established from the merger 2017. In early 2021, the company’s drones delivered
of Hema Jishi and Taobao Grocery. Alibaba’s latest meals to customers in Shenzhen, south China’s
move shows that community group buying remains Guangdong province, for the first time. Meituan also
a hot business model in mainland China amid the used drones to deliver needed supplies to residents
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