The e-Commerce Vision of Life in China – and the Reality


Via Reuters

If the Western internet might, as some have claimed, have been developed by pornography, the Chinese internet has been led by e-commerce – the desire to make money. Modern Chinese innovation and way of life are perhaps best exemplified by the giants of e-commerce, the BAT trinity of Baidu, Alibaba and Tencent, as the American era was exemplified by the motor car and the suburban lifestyle it enabled.

What is intriguing about the e-commerce apps so popular in China is they aspire to a sort of frictionless life, where needs are instantly met by suppliers, and where goods and services are delivered without fuss or difficulty. Laudable aims, but it’s interesting how they aim to remove difficulties in life in China that really could be managed or removed if consumers had greater say. The apps represent a sort of great leap forward for consumer satisfaction, bounding over the logistical and behavioural issues that make every day life such a hassle.

Let’s take the bank apps for instance. Alipay is great, far in advance of the app I have from my UK bank, with its simple and convenient ability to transfer money, pay for an Uber cab, order take-out food, get online movies and games, pay for Tmall or Taobao purchases, lottery or air tickets, or even give via digital “red envelopes”. And yet compare that to the grinding difficulty of achieving anything in the actual bank branches – where, if you lose your bank card, it’s somehow less trouble to close your account, open a new one and change your salary direct debit than to issue a new card. Or so the Bank of China seemed to think when it happened to me. As for transferring money – well, if you asked me about losing a kidney or trying to send money back home, I’d have to have a proper think.

There are a number of healthcare apps similarly aiming to bring together practitioners and patients in a simple and convenient transaction. Alibaba, Baidu and Tencent have been particularly active in this field, acquiring startups and technology in what they’re clearly betting will be a strong economic growth area. Quyiyuan, for example, aims to provide appointment scheduling, diagnosis checking, and making payments. Chunyu Doctor allows users to connect with professional doctors, to seek diagnoses on potential diseases and symptoms for free. But – again – it’s little wonder that people are seeking better ways to operate access to healthcare. Why do so few hospitals allow you to phone or go online to make an appointment? Why is it necessary to queue up to buy a ticket at 6am? (Even more grating is the meibanfa shrug of the shoulders by both hospitals and police towards the touting problem, both declaring it’s not their responsibility).

Taxi apps similarly – why, before Didi Chuxing and Uber was it necessary to stand at the roadside, arm outstretched like a slot machine lever? Even worse was the way you stood hoping that a cab came along before someone brazenly stood a few metres in front of you to claim it first. And god forbid you want a cab in some popular resort or nightlife area, where gougers would be out in force. No doubt cab-driving isn’t an easy way to make a living, but there had to be a better way to operate than that. And so Uber and Didi Chuxing have proved, with the apps claiming 1 million and 4 million rides a day in China, respectively, across 200 cities. Which is nice, but you wonder why the existing cab companies were happy to stagnate into redundancy.

Beyond that, apps are transforming education, dating, job hunting, property, and wealth management – to just take a few examples. They like to describe themselves as disruptors, obviating the need for flabby layers of bureaucracy by directly connecting consumers and suppliers (for a slight fee). Certainly, in China, one can see their appeal: existing supply chains are often lumberingly inefficient, or just absent. (Western supermarkets have found China tough going precisely because they rely on efficient, just-in-time supply chains). That inefficiency grinds away, making every transaction needlessly difficult, clogging up time, and increasing consumer frustration. The frictionless world the apps create is one that leads directly to the consumer society that the Chinese economy needs to and promises to bring about. The apps herald an era of everything being instantly available and consumer satisfaction being the driving force for the economy. This could be a real revolution in how China operates, transferring power from producers to consumers. Already, there have been reports of conflicts between regular cabbies and Uber drivers. The shakedown of existing, comfortable supply patterns will discomfit some. But for the majority, it promises a more open, accountable and efficient future. It will be fascinating to see how these methods take hold, and to what degree they are allowed to, on the broader economy.

Published in Business Tianjin