The View | How China’s e-commerce playbook can help emerging economies transform

Emerging markets, like China’s, have the advantage of a sizeable young population that is highly adaptable, if not already at home in the mobile digital era. Better yet, by learning from US tech leaders, emerging markets will have the best of both worlds

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A man in Colombo, Sri Lanka, uses his mobile phone. Beijing is actively exporting its internet successes, empowering businesses to transact online through the same tools developed in China. Photo: Reuters

Published: 4:30pm, 13 Mar 2019Updated: 10:43pm, 13 Mar 2019

After decades of being regarded as “the world’s factory”, it’s no exaggeration to say that China has reinvented itself to become a global tech leader. It is already home to over half the world’s artificial-intelligence (AI) unicorns and has produced internet titans like Baidu, Alibaba and Tencent – also known as the BAT.

As the nation slips into its new role of being a leading innovator, especially in areas like e-commerce and mobile, it offers important lessons and reflections for other emerging economies.

To begin to understand China’s meteoric rise is to also realise the crucial role that the internet has played in all of this. This is hardly surprising when considering the internet’s potential to bring radical change across all industries and sectors. It impacts people’s lives in every way and paves the way for exciting developments in industries like robotics, AI and health care.

Similarly, internet commercialisation has also been a linchpin of economic growth, with more than 40 per cent of the world’s e-commerce transactions taking place in China in 2017, up from only 1 per cent a decade ago. By 2022, China’s e-commerce market is forecast to reach US$1.8 trillion. The effect this will have cannot be understated.

At the most fundamental level, e-commerce hits right at the core of an economy, creating myriad opportunities for small- and medium-sized businesses and changing the face of retailing, logistics and supply chains. All of this catalyses the growth of the economy significantly.

Alibaba, owner of the South China Morning Post, is perhaps the best-known example of this. It has revolutionised the way small businesses in China sell, and has positioned itself as one of the most sophisticated and lucrative retail online platforms in the world. E-commerce platforms like JD.com have also had a transformative impact. And the platforms WeChat and Alipay have a virtual duopoly in the online payments sector in China, making transacting online easy for businesses and consumers alike.

But what makes China’s new-found superiority in e-commerce a model that other emerging nations can follow and draw inspiration from?

To begin with, the fact that China’s business infrastructure was initially not as developed as the West’s actually proved to be an asset. Because of this, technology and e-commerce firms have been able to leapfrog certain developments, to the dismay of their Western counterparts, creating an infrastructure that is more ready to embrace the future. Other emerging nations share this “direct to mobile digital” consumer characteristic, skipping over the desktop and laptop generations of internet connectivity.