China’s Silicon Valley issues new policies to cultivate its own e-commerce giant, boost local online retail industry
- While Shenzhen is home to tech giants Tencent and Huawei, the city lacks its own e-commerce champion to compete with Alibaba, JD.com and Pinduoduo
- There are currently more than 553,000 e-commerce-related companies registered in Shenzhen, the most of any city in the country
Shenzhen, southern China’s tech hub, wants to give a boost to the e-commerce industry through a new set of rules, as it seeks to cultivate its own online shopping giant.
The city will provide funding and support to e-commerce companies and related businesses to “accelerate the development of large-scale e-commerce platforms” and “vigorously promote the application of e-commerce”, according to rules published by the Commerce Bureau of Shenzhen Municipality.
Firms that meet eligibility requirements will be able to apply for a range of financial incentives, including cash rewards for obtaining financing from venture capital or public listing, subsidies for office rentals, discounted loans, support for tech and hardware expenses, and cash handouts of up to 10 million yuan (US$1.5 million) based on the e-commerce platforms’ contribution to the city’s retail sales.
To be eligible, companies need to have received investments totalling more than 200 million yuan from two or more venture capital funds in the last three years, or must have achieved annual retail sales of over 1 billion yuan with an average growth rate of more than 30 per cent over the past three years.
If companies do not qualify based on these financial criteria, they can still be eligible if they are named in the “outstanding e-commerce enterprise” lists published by the Ministry of Industry and Information Technology (MIIT) or by the Ministry of Science and Technology (MIST).