The Internet of Buying Things

New business models emerging through the development of Internet and artificial intelligence technologies are becoming major drivers of consumption in China, playing an increasingly important role in boosting economic and social development. According to the National Bureau of Statistics, China’s online retail sales of physical goods grew 11.6 percent year on year in the first quarter of 2024, having maintained double-digit growth for several years in a row.

According to Douyin, the Chinese version of TikTok, the platform hosted 200 million short videos and 9 million live broadcasts per month in 2023, leading to an annual sale of 10 billion items. At present, there are more than 3.6 million vloggers engaged in livestream marketing on Douyin and more than 10 million registered businesses.

The Chinese Government encourages new types of consumption, and promotes the deep integration of online and offline consumption through innovation-driven and integrated development.

China’s new business models have developed rapidly since the outbreak of COVID-19. Online education, working from home, and online shopping and ordering of food were widely encouraged in order to support pandemic prevention and control measures. These new forms of business not only played an important role in COVID-19 prevention and control, but also met people’s daily needs, ensuring steady recovery of domestic consumption and the economy. That’s why they continued to develop after the optimization of pandemic prevention and control measures.

New models are promoting the digital transformation of traditional industries and boosting the upgrading of the industrial structure. Through technology innovation and application, these new models are forming new ways to create value, bringing new vitality into economic development.

New business models prioritize innovation, under which enterprises and individuals are encouraged to enhance their competitiveness through technological innovation, management innovation and business model innovation. They align with China’s efforts to promote high-quality economic development, which is characterized by innovation, coordination, greenness, openness and inclusiveness. New business models have changed people’s lifestyles, increasing convenience and quality of life. The wide use of e-commerce and online shopping, for instance, enables consumers to shop anytime and anywhere.

More convenience and choices for consumers, however, are only part of the story. They create new growth poles and job opportunities for enterprises and individuals. E-commerce, online ride-hailing services, food delivery, express delivery, livestream marketing and other new business forms have not only directly provided jobs, but also stimulated the growth of related services, such as logistics, warehousing and payment.

To fuel the development of these new business models, China has strengthened the construction of its information network infrastructure, such as 5G telecommunication networks, data centers and the industrial Internet. The construction of this infrastructure provides strong technological support for new business models.

The government has also introduced a package of supportive policies, including reducing the cost of running online businesses for self-employed people, providing diversified employment opportunities and exploring ways of adapting social security policies to support new forms of employment. In the meantime, the government is innovating its methods of management and oversight to meet the development needs of new business models.

China’s new business models are not only having a big impact at home, but are also gradually expanding into the international market. For example, the development of cross-border e-commerce has made it easier for Chinese products to enter the global market and, at the same time, has attracted high-quality goods from all over the world to enter the Chinese market.