【COVID-19】面对疫情，上海新经济抢眼   2020-07-10

 

After the resumption of work and production, Shanghai’s economy has recovered quickly with strong vitality as shown by economic data, which might be a little unexpected. One of the most dynamic and eye-catching aspects is the online new economy. The development of Shanghai online new economy has unique advantages in three aspects, namely scale, ecosystem, and culture.

Market demand and supply capacity both have advantages in terms of scale

First, market demand and supply capacity both have advantages in terms of scale. Market demand refers to the purchasing power, that is, the money in the pockets of ordinary people. One indicator of the purchasing power of Shanghai’s online and offline markets is that Shanghai has a high proportion of middle-income residents. According to the 2016 report on People’s Livelihood, Opinions and Conditions in Shanghai (income & consumption part) released by the Institute of Sociology of Shanghai Academy of Social Sciences, 84.20 percent of households in Shanghai have reached the “well-off” status or above. According to the survey, people with annual personal income of 50,000 yuan or less accounted for 29.70%, those with 51,000 to 70,000 yuan accounted for 30.60%, those with 71,000 to 100,000 yuan accounted for 25.30%, and those with more than 100,000 yuan accounted for 14.40%. This means that 70% of citizens had an annual income of 51,000 to 100,000 yuan, indicating that most residents had a middle-income level or above. That was the situation four years ago, and the current situation should only be better. Consumption is a function of income, and such a scale of middle-income and above groups explains the demand side of Shanghai’s online new economy.

Meanwhile, in the face of the epidemic, the online consultation and telemedicine sectors in Shanghai have seen extremely fast growth in demand. Since the beginning of this year, Ali Health has had more than 2.8 million visitors who had access to online free medical consultations. Online education and digital entertainment were back in the spotlight, with Bilibili forecasting 118% revenue growth in the first quarter and 32% first-quarter growth for Ximalaya. Online demand for fresh produce was also strong. Dingdong Maicai had 4 million orders in the seven-day Spring Festival. Huawei’s telecommuting business grew 80 percent, serving 300,000 people in 40,000 companies and organizations in Shanghai.

According to the 2018 and 2019 white papers on the development and employment of China’s digital economy released by the China Academy of Information and Communications Technology, there were only three regions where digital economy accounted for more than 40 percent of GDP in 2017: Beijing, Shanghai and Guangdong. In 2018, the digital economy in Beijing and Shanghai already played a dominant role, with digital economy accounting for more than 50 percent of GDP. According to the Statistical Communiqué of Shanghai on 2019 National Economic and Social Development, the added value of the information industry reached 409.460 billion yuan in 2019, an increase of 10.1 percent over the previous year. Of this amount, the added value of the information service industry reached 286.312 billion yuan, up by 15%. Shanghai became the first city nationwide to realize inter-provincial 5G video communications. Within 2019, 16,672 5G macro stations and 14,614 5G indoor stations were completed, covering all key central urban areas and suburban areas. The city leveraged demonstration applications to drive the integrated development of 5G industry chain, business chain and innovation chain, while promoting 234 5G application projects in 10 fields, including intelligent manufacturing, healthcare and smart education. These projects and data represent the supply side of Shanghai’s online new economy now and for a period to come.

Innovation and industry ecosystems improve the success rate of online new economy

Second, ecosystem advantages provide support for innovation, industries, markets and talent. By leveraging the ecosystem concepts from nature to foster entrepreneurship, innovation and industry growth, the aim is to emphasize that they are also within the “rainforest” paradigm with self-regulating functions. This paradigm is characterized by diversity, openness, self-organization and dynamics. In the innovation or industry ecosystems, many “species” coexist, which may produce new “species”— new scientific and technological innovations, new products and services, and new industries and business forms. The online new economy is a new species. Shanghai’s innovation and industry ecosystems have increased the success rate of this new “species”. It has created a precious and superior condition for fast growth of the online new economy in Shanghai.

Ecosystem advantages are mainly embodied in the development of online new economy, by providing a variety of supportive measures. As a leading city in the innovation and development of industrial Internet in China, Shanghai has taken industrial Internet as an important strategic option since 2017 to make full use of the “Shanghai Manufacturing” brand, facilitate high-quality industry development, and contribute to the construction of a manufacturing power, with a series of initiatives and practice. Of the top 100 Internet companies in China, 19 are based in Shanghai, ranked 2nd in the country. Shanghai now has two of China’s top 10 Internet companies by market capitalization, with Pinduoduo in the top four. In recent years, the emerging cultural industry based on digital technology has been rising rapidly in Shanghai. The cultural industry is characterized by diverse contents, mobility, intelligence, and deep integration. And creation and production of cultural contents become one of the core competitiveness of industry development.

Shanghai’s market systems, represented by the financial market systems, have made great progress in recent years. Shanghai has become one of the cities worldwide with a complete set of financial markets in the world. Shanghai’s financial markets have been further opened up to the outside world, and its international influence has been on the rise. Shanghai gives full play to its advantages of complete financial infrastructure, agglomeration of financial institutions, numerous high-tech enterprises and diversified scene applications, as it is actively making use of fintech to carry out innovations in online financial services.

Talent and start-up companies are both the main bodies of innovation and industry ecosystems, and their quantity and quality determine the overall quality of the entire ecosystems. Shanghai has not only a huge talent pool, but also a large number of graduates who stay or come to work in Shanghai every year. In particular, Shanghai is one of China’s cities that are most appealing to overseas talent.

The May 5 Shopping Festival shows the characteristics and effects of Shanghai style culture

Third, Shanghai-style culture provides cultural support for the development of online new economy. The online new economy not only is closely related to the digital economy, but also comes with the addition of many cultural and fashion elements. The characteristics of Shanghai’s culture — innovation, openness and diversity — provide momentum for the development of the new online economy and create an inclusive and relaxing environment. These are the rare advantages of Shanghai.

The launch of May 5 Shopping Festival is another innovation in Shanghai in recent years on the basis of creating a source of new retail and consumption. Pinduoduo helps offline stores to create online private traffic. Ele.me helps more local time-honored brands and high-end food and fresh produce enterprises to develop new digital operation scenes. All of them are taking practical actions to promote the integrated development of online and offline channels. These innovations brought about by the May 5 Shopping Festival will certainly activate the new drivers of Shanghai’s economic development and boost Shanghai’s online new economy to a higher level.

The “May 5 Shopping Festival · Quality Life Livestreaming Week” series activities have inspired citizens’ imagination and demand for quality of life through themed livestreaming, shop visits and promotional activities by incorporating different fashion elements. The “Quality Life Livestreaming Week” leveraged cultural consumption to drive shopping, and fully demonstrated the characteristics and effects of the Shanghai-style culture. As Shanghai’s per capita disposable income continues to rise, the city’s consumption scene will undergo profound changes in many ways. The post-epidemic trend will be characterized by transformation and upgrading of lifestyles in terms of experience, demand, culture, and value, on top of the growing high-end brands in goods and services, functional demand for products and services, and the pursuit of cost-effectiveness. The online new economy embedded with cultural elements will play an important role in this transformation and promotion.

Author: Chen Xian (Professor of Antai School of Economics and Management, Shanghai Jiao Tong University, Professor of China Institute for Urban Governance)

Reprinted from: Shanghai Observer

https://web.shobserver.com/wxShare/html/255436.htm

 

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