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Online Business on Cloud Nine

2020-04-23 14:42:00 Source:China Today Author:JIANG HAOFENG
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SHOWING his confirmation letter for attendance, Kamran Vossoughi, president and chairman of Michelin China, gave a gratified smile on the screen during a video conference. Heading the French multinational tire manufacturer in China, Vossoughi said his company is confident that the third China International Import Expo (CIIE) will be a successful event and that the future of the Chinese economy is bright.

“Real gold is not afraid of fire,” said Vossoughi.

Vossoughi is one of over 300 million people in China who are running businesses or handling the daily work routines from home amid national efforts to combat the novel coronavirus epidemic, according to statistics by the Guangzhou-based market analysis company iiMedia Research.

Over the last two months or more, in contrast with the quieter streets and business venues, online education and gaming among other Internet-based businesses have been burgeoning, and cloud-driven recruitment, business negotiations, and medical services have also been unfolding in full swing.

While keeping daily life and business going amid the epidemic, the cloud computing technology is also spawning new business models and lifestyles that are expected to generate a significant influence on the post-epidemic era.

                  

High Traffic on the Cloud

A Shanghai businessman surnamed Gao found an opportunity during the epidemic to expand his go game training business. Before the epidemic, he sold one offline class at RMB 130 (US $18.32) for one lesson but now has cut it to RMB 75 (US $10.57) for an online equivalent. “My profit margin increases anyway,” Gao said, attributing the growth to the fact that parents are demanding more classes every week for their children who are confined at home amid the epidemic.

Before the epidemic broke out, children usually took one class per week, but now they usually have three, Gao said. The soaring demands have also made Gao’s life busier. While managing a way to attract children’s attention during the online class, he spent a lot of time checking their homework and answering questions raised via mobile messaging apps after the class.

Like Gao’s company, online training businesses, together with others engaged in stay-at-home economic activities including online gaming and online office services, witnessed an explosion amid the epidemic, as people stay at home to stop the spread of the epidemic, iiMedia Research said in a recently released report. In sharp contrast, the health crisis took a heavy toll on tourism, catering, hospitality, and transportation among other sectors due to plummeting demands, the market research company said.

“The blow caused by the sudden outbreak of the novel coronavirus is rippling through the Chinese economy and society,” noted Zhang Deyong, a researcher at the National Academy of Economic Strategy with the Chinese Academy of Social Sciences. To contain the epidemic, movements of people, goods, and vehicles have been restricted, inevitably affecting the normal order of people’s lives and industrial production.

However, despite this challenge, demands in some sectors have continued to balloon. As busy as subways and other means of public transport frequently seen during normal work days in metropolises like Beijing and Shanghai are online conference “rooms” on messaging and social media apps, which were rolled out by Chinese tech giants like Tencent Holdings Ltd. and Alibaba Group.

On February 3, the first work day after the 10-day Spring Festival holiday, Alibaba’s office app logged close to 200 million users from more than 10 million companies in China as they resumed work on the “cloud,” the tech giant said, noting the figure surged several times that of the same period during the previous year. Operators of the office app had to add 10,000 cloud servers in just two hours to support the exploding traffic, the fastest server expansion recorded in the history of Alibaba Cloud service.

Tencent never lagged behind in the tech race. Apart from online meeting services, it also launched functions of online health counseling on its corporate version of the WeChat app. The corporate version is capable of supporting video meetings attended by 300 users simultaneously, the company said.

                  

Logistics Support

Statistics released by the China State Railway Group Co., Ltd. (China Railway) in early March showed that the goods transported by China’s railway system in February totaled 310 million tons, rising by 13.32 million tons year on year, representing an increase of 4.5 percent, the highest in history. On average, 171,000 train carriages were loaded every day, an increase of 4,945 carriages year on year. From February 17 to the end of the month, the system transported more than 11 million tons of goods every day. The momentum continued in March.

“Luggage and freight carriages of passenger trains as well as freight trains have been utilized to transport anti-virus supplies to Hubei Province,” said Zhao Jun, director of the freight department with China Railway. As of February 29, a total of 203,000 tons of such supplies had been shipped in 10,154 batches, Zhao said.

Statistically, the shipments to Hubei Province only accounted for a small portion of the total amount of goods transported by the railway system in February. Zhao said that the railway freight in China is steadily dominated by bulk commodities.

The huge shipment volume of the railway system provides compelling evidence that China’s economy is running stably in general, insiders said, adding that given the big potential and robust momentum of the Chinese economy, the epidemic fallout will remain only for a short time and is controllable on the whole.

The fundamentals of the economy stay bullish, similar to how it did in 2003 during the Severe Acute Respiratory Syndrome (SARS) epidemic, said insiders. Back then, the growth rate of goods transported by railway reached 8.12 percent in May during the peak period of the SARS epidemic. The yearly growth rate logged 6.41 percent in 2003.

Stable transportation ensures normal production and circulation of goods across the country. Peer-to-peer logistics service improves the efficiency in the circulation of goods and meets the ballooning demands for deliveries of fresh produce to support people’s daily life. “The amount of orders for fresh food to be delivered is seven times higher than it was before the Spring Festival,” said Hu Panru, a logistics manager in Beijing from China’s online retailer Suning.com. Hu said the delivery company had to recruit a large number of employees instantly to deal with the soaring demands.

Empowering Stay-at-Home Economy

The stay-at-home economy which has been fueled during the epidemic is expected to be a new norm when social life resumes after the epidemic, insiders said.

In Shanghai, a high-traffic farmers’ market in Jiading District opened as late as March 8 after the Spring Festival holiday which ended on February 3. The reason is that vendors were required by local authorities to conduct self-isolation for two weeks after they came back from their hometowns.

A fresh product store under the brand chain named Qiandama across the road was open throughout the holiday. Residents from the neighborhood ordered eggs, fresh fish, meat, vegetables, and other food through its mobile app, and could have the goods delivered to their doorstep. “After the epidemic broke out, our store started to sell vegetables among others and saw a surging business volume. Many men in their 30s and 40s [who rarely shop during normal week days] joined the legion of grocery goers. They prefer to order via the app,” said a cashier at the retail store.

Gao Xiang is the co-founder of Youfan, an Internet startup that makes and delivers takeout food for office workers in Guangzhou, Shanghai, and Beijing. According to him, it is just the beginning of the era for the stay-at-home economy. From February 15 to late that month, the company saw a daily increase of more than 10,000 orders. He found more white-collar workers in Guangzhou, capital of Guangdong Province, opted for delivery food after they returned to work.

In response to the surging demands, Youfan installed intelligent lockers in office buildings. Delivery couriers drop the food in the lockers with the temperature inside staying around 60 degrees Celsius, which then starts a 30-minute disinfection process. A notification will be sent to the mobile phone of the purchaser, who then goes and takes the food from the locker by scanning a code. The whole process is conducted by contactless delivery, guaranteeing the health and convenience of both the purchaser and deliverer.

In Shanghai, five-starred Shangri-La Hotel joined the forces to provide food delivery services at affordable prices, hoping to garner profits from the bourgeoning market.

Vossoughi lauded the idea of carrying out business negotiations with cloud technology during the third CIIE. The solution shows the wisdom and good will of the organizers and will generate a far-reaching influence, he said. In the future, be it at home, on a high-speed train, or in a scenic spot, business can be conducted just like Vossoughi did for his confirmation of attendance as long as people have a “cloud” over their head.

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JIANG HAOFENG is a reporter with the Shanghai-based Xinmin Weekly.

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