China may be the world’s fastest-growing cashless society, due in part to the ease of Alipay and WeChat Pay applications, which enable Chinese consumers to easily buy goods and services using only their mobile phones.
This is actually part of a larger trend of the development of the smart city.
According to the Economic Times (2018), “China started piloting national smart city development in 2012 to encourage the use of the latest technology, such as artificial intelligence and Internet of Things, to help the flow of [automobile] traffic, improve law enforcement, and make public buildings more energy efficient. China aims to nurture 100 new smart cities from 2016 to 2020 to lead the country’s urban planning and development.”
One smart city initiative is increased surveillance via the operation of thousands of CCTVs to track anything from vehicles, citizens, and visitors (via facial recognition software). Through AI, they aim to score people on their social behavior. Needless to say, this heightened surveillance and rating of citizens brings its own new benefits and drawbacks.
Indeed, the rate of “smartization” seems to be increasing. Alipay and WeChat already enable cashless transactions, and in this environment, Chinese companies strive to offer more forms of payment to greatly expedite transaction cycles.
According to Professor Guo Bai at CEIBS, mobile payments (in general) and daily peaks appear to be 11 times greater than in the US, along with the logistics of package delivery occurring at a much higher rate. Chinese companies have come to be known for their fast responsiveness to customer requirements. There is also considerably more Venture Capital funding available in China than in any other country.
A unique point in the entrepreneurship and management of Chinese companies seems to be that they are embracing the digitization age and striving for overall supremacy. According to Professor Bai, there are 3 pillars of Value Creation.
Online and offline information related to customers, products, and services can be brought together through shipment tracking, logistics, robotics and AI. This is essential in order to be effective in a competitive digital economy.
The network effect of product and service value increases as more customers are engaged. This means ensuring that a company is positioned to share the product or service value with other customers via a collaborative network.
Customers are more informed than ever, which translates to greater buying power. Digitization results in more efficient, lower cost processes and programs. It is important to embrace digitization and invest in the automation of mundane processes.