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Economy

China Focus: Digital economy helps offset coronavirus impact

February 10, 2020


Abstract : When some industries in China have been put into temporary stagnation due to the sudden coronavirus epidemic outbreak, the country's booming digital economy, however, is playing an increasingly important role in hedging economic risks and uncertainty.

A deliveryman delivers takeaways to the dining hall of a hospital in Wuhan, central China's Hubei Province, Jan. 31, 2020. (Xinhua/Cai Yang)

SHANGHAI, Feb. 7 (Xinhua) -- When some industries in China have been put into temporary stagnation due to the sudden coronavirus epidemic outbreak, the country's booming digital economy, however, is playing an increasingly important role in hedging economic risks and uncertainty.

As an effective measure to prevent crowds and control the spread of the virus, many Chinese are avoiding going outdoors, driving more vigorous development of the thriving fresh food e-commerce and food delivery.

Shanghai resident Qi Yongjun placed an order Thursday on Ele.me, a food delivery app, for fresh vegetables, eggs, pastries and dairy products.

"The prices are the same as usual, but maybe due to a large number of orders, it took longer, about two hours, to be delivered. But it's understandable since we are in a special time," Qi said.

The number and amount of orders on many Chinese online fresh food platforms have soared since the Spring Festival, which fell on Jan. 25 this year.

The online fresh food platform of e-commerce giant JD.com said its sales grew by 215 percent year-on-year from Jan. 24 to Feb. 2, with more than 15,000 tonnes of fresh products sold nationwide.

Zhang Yu, manager of a warehouse of Dingdong Maicai, a fresh vegetable e-commerce platform, said amount of each order has nearly doubled to over 100 yuan (about 14.3 U.S. dollars), compared to only 60 or 70 yuan in the past.

Facing a substantial increase in business volume, some delivery platforms have adopted measures to cope with the issue of being short-handed.

Freshhippo, an online and brick-and-mortar supermarket chain backed by China's e-commerce giant Alibaba, has worked with well-known Chinese catering companies with more than 500 employees from restaurants including Yunhaiyao joining Freshhippo's stores and delivery services.

The move a is win-win cooperation, according to Hu Qiugen, general manager of operations management of Freshhippo.

"The need for online delivery is far higher than usual, requiring more labor, while many catering companies have suspended operations, creating a more available workforce," Hu said. "The two sides are working together to get through difficulties."

"As long as services such as express delivery and logistics are back to normal, the decline in offline sales caused by the epidemic may be largely offset by the increase in online shopping," said Rui Meng, a professor at China Europe International Business School.

Also, the popularity of telecommuting apps to facilitate those working from home amid the epidemic has prompted the development of China's digital economy.

Downloads of telecommuting apps such as DingTalk and WeChat Work ranked high in the Apple App Store.

More than 10 million companies and organizations have been using Alibaba's mobile office tool DingTalk since the end of the Spring Festival holiday, according to the company.

Ping An Insurance, a financial giant, said nearly 10,000 of its staff across the country used audio and video teleconferencing systems during the Spring Festival holiday.

On Thursday, the Shanghai municipal government issued a letter for all enterprises in the city, encouraging them to take measures such as flexible working hours and telecommuting amid the coronavirus outbreak.

"We believe the epidemic will push telecommuting to a new inflection point, with more people realizing that working efficiency is more important than where to work," said Zhang Zhouping, senior analyst of the E-Commerce Research Center.

"China's digital economy has been a stabilizer amid the virus outbreak, hedging economic risks. Provided that we give play to the respective advantages of corporate, social and government mechanisms, we will definitely see 'spring comes after winter,'" Rui Meng said.

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Keyword: China economy coronavirus

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