By Paul O’Brien
Chemlinked Head Editor- Specialist in China Food Law, Chinese Regulations, Trade Policy, Medical Doctor in Training
Hangzhou: Seamless Supply Chain Digitalization
- Hangzhou has the world’s most digitally integrated supply chain. It combines exceptionally well developed ecommerce, mobile payment, cheap and flexible logistics, traceability and product returns in an environment that is extremely convenient and user friendly for consumers. (even for a 老外)
- There is almost an app for every market gap in Hangzhou all of which are integrated with Alipay or Wechat pay. If someone needs a cleaner ,or someone to cook, take care of my pets, walk dogs, send packages…. pretty much anything that somebody needs can be arranged and paid for with a mobile phone and Alipay or Wechat.
- 95% of shops in Hangzhou and 98% of taxi’s in Hangzhou officially accept Alipay. Person to person payments in restaurants between customers and owners using either Wechat or Alipay is universally accepted.
- From the 16th of August Hangzhou buses now accept mobile payment for fares.
- Hangzhou’s CBEC zone acts as a pilot city for the majority of China’s new crossborder ecommerce policies. Hangzhou develops, implements and assesses and the rest of China follows its lead.
- As well as being the birthplace and home of Alibaba, companies such as Tencent, Jingdong and Baidu are investing heavily in Hangzhou. Baidu has just opened its first office in Hangzhou and Jingdong has invested in a 1.3 billion RMB project to develop ecommerce infrastructure in Hangzhou.
- An Alipay credit rating system run by Zhima credit allows Hangzhou citizens to freely borrow goods such as umbrellas and phone chargers throughout the city based on their Alipay credit rating.
Hangzhou: Blueprinting China’s New Normal Growth
The serene beauty of Hangzhou’s Westlake, its breathtaking blend of ancient and modern architecture and the viridescent beauty of Hangzhou’s numerous manicured gardens seamlessly woven into Hangzhou’s cityscape make it easy to forget you are in one of Asia’s and in my opinion the world’s most innovative and important cities. As home to Jack Ma’s Alibaba (the largest IPO in US stock market history) and host of this year’s G20 summit there is a sense of coming of age for a city already spearheading policies and developing digital supply chain systems that are leading the way for China and the rest of the world.
Hangzhou represents the perfect confluence of new and old China, a sublime juxtaposition of China’s ancient values of beauty, order and form with that of China’s new values of forward thinking, creativity and innovation that are propelling Hangzhou and China to the forefront of a globally connected, electronically integrated world. Hangzhou encapsulates solutions to key challenges as China transitions towards “new normal growth” and swaps out its outdated “made in China” economic model for an upgraded “made for China” paradigm.
Hangzhou is at the epicenter of this sea change and is taking the leading role in China’s ecommerce revolution. It is a place where citizens are electronically connected, enterprises and businessmen are responsible and accountable, supply chains are traceable and goods and services infinitely safer.It is blazing a trail in a new frontier of effortless living quantified in QR codes, connectivity, mobile shopping and payments, messaging services, efficient logistics and an integrated supply chain unmatched throughout the world. Here’s what its like to spend a day in the world’s most digitally integrated supply chain.
A Day in a Cashless Society
23rd of August 2016: Yesterday I decided to spend a day in Hangzhou without any cash or cards….. just my mobile phone and a power bank … this is how it went down…
7:30 AM: Yesterday as i was leaving work I received a message on my phone instructing that goods I purchased from a friend in Beijing ( I purchased the goods on Wechat and paid using Wechat pay) had arrived and were waiting in the electronic lockers at the ground floor of my apartment. I go there and scan the QR code on the electronic display, a locker door pops open and I collect my goods. At the same time a message is sent to both the logistics and the seller that I recieved my goods…..
8:00 AM: My morning ritual usually starts with a coffee and a juice. I pop across to my local Starbucks to pick up my Americano. I could be lazy and actually use my mobile to order, pay and get the coffee delivered to my home but I haven’t fallen that far…yet . I’ve switched out my Starbucks membership card in favor of the mobile app and linked my credit card to the app, i pay using my mobile and it turns out I’ve accumulated enough purchase points to mean that today’s coffee is on the house. Ill spend the next 20 minutes enjoying my coffee and checking out news and other content on official Wechat accounts.
8:20: After my coffee ill usually grab a juice at the new shop next door. The idea behind the juice bar is really innovative. There are no actual shop tellers, just people to make the juice. The storefront is dominated by 2 exceedingly large touch screens with a list of ingredients divided into columns. Customers pick a single ingredient (a total of 4) in each column and then pay for the goods by scanning either the Alipay or Wechat Pay QR code. Standard fare is a variety of fruit and veg with some optional health kicks like wheat grass or enzymes. My juice gets served in a convenient pouch and labelled with a custom nutritional information profile based on the ingredients I selected for my Juice, turns out i’m getting my RDA for Vitamin C and % of my RDA for Vitamin A, a selection of B vitamins and a nice dose of SOD to deal with those pesky free radicals all for a whopping 39 calories, sounds like another win….
8:30: After the juice i pop across the road and jump on the bus to work. I scan a barcode at the front of the bus and the fare is automatically subtracted from my Alipay.
8:45: I arrive at work and I’m feeling peckish. For breakfast I head over to the local VnGO shop. I order a couple of 包子 and a 2 eggs. VnGO now accepts Wechat pay. The teller scans my Wechat Wallet barcode and off i go on my merry way to enjoy my breakfast.
12:00: Break Time rolls around….. I go to the local restaurant and get some eats which i pay for using my Alipay. Sitting at the table i use my mobile to book flights and book some movie tickets to catch the new Bourne at 8:30 tonight. My friend messages me on Wechat, i’ve forgotten to pay for football from the previous evening so i send him a red package to square up. Speaking of football I sign the electronic roster for the Thursday night game using a Wechat integrated app called 活动 to include myself in the game and send the organizer the money in advance using Wechat Pay. He drops me a map location for the game and I save it in my Wechat favorites so I can cycle to the spot on the day using my Wechat maps and GPS.
5:45: As I’m leaving work my mother video calls me on my Wechat, (i’ve set my family up with Wechat so we can chat in a group). I chat to her as I’m waiting for the taxi i ordered using my Wechat (Didi – 滴滴出行）to collect me. I get the taxi back home and when the jouney is complete its automatically deducted from my Wechat balance.
6:30: I’m a little tired after work and not in the mood to cook so i order some food from a restaurant I really like. The restaurant actually don’t have their own in house delivery so i pay and get it delivered using a 3rd party delivery app called Meituan (Alipay integrated). I’m a little impatient but it’s ok… i can check on the status and location of my order in real time so i know the exact location and status of my delivery at any time.
7:30: My cats are being unusually friendly which can only mean they are hungry and i’ve run out of cat food. I actually have a running subscription with a local ecommerce retailer to get automatic delivery of my cat food every second week but one of my cats is a beast and has eaten more food than usual this month. I pop across to the local walmart and purchase some cat food to tide me over until the next delivery comes. I pay for the cat food using my Wechat Pay which is now accepted in all Walmarts throughout China
8:30: I go to the Cinema and collect my tickets by scanning the QR code on the ticket printing machine. I grab some snacks and pay using Alipay….movie was awesome.
11:00: I’m tired, my fingers are burnt out from clicking and my thumb is cramped from fingerprint opening my iphone but i’ve successfully spent a whole day living in a cashless society in the home of the most electronically integrated supply chain in the world……its a brave new world