China is leading the “New Retail revolution” (also called NewGen Retail), a concept first introduced by Alibaba to describe how its stores Hema Xiansheng use technology to provide a more convenient and holistic customer experience and gain operational efficiency. To give an example of the scale of the New Retail, there are over 65 Hema Xiansheng stores in China and Alibaba plans to open 2000 new stores in the next 3-5 years.

All the Chinese tech giant, from Alibaba to Tencent and JC.com, are involved in transforming the retail industry online and more and more offline.  China’s embrace of New Retail  is driven by its mobile payment adoption (thanks to Alipay and WeChat pay), cheap labor costs for inexpensive delivery, ubiquity of QR codes and the government’s active push of growth through digital transformation.  China has also led the “O2O (online-to-offline) revolution”, making everything accessible from your app, from the laundry service to the doctors consultation.

Most of these NewGen Retail stores can be experienced in Shanghai and Beijing.

As the country is pushing to restructure its economy and develop a growth model based on quality rather than quantity, the government has invested heavily in the infrastructure to build innovation hubs and technology parks. The most significant is Zhongguancun, in Beijing, with headquarters of Chinese tech giants Xiaomi, Meituan-Dianping, Didi-Kuaidi, Weibo, YouKu, global IT companies (Microsoft, IBM, Sony Ericsson, …) as well as incubators, accelerators and startups. There are over 60 unicorns in the city! Zhongguancun is indeed the place where entrepreneurs, engineering talent from the two top Chinese universities and VC funds come together, and the place often compared to the Silicon Valley.

Because of the Great Firewall, the country has created its very own software ecosystem focused exclusively on the Chinese market, which is completely different from ecosystems found elsewhere in the world. Startups have first executed as copycats but with the speed of change and the scale of tech adoption in China, a huge market of 800 million internet users (August 2018) and 98% of them using mobile phones, these copycats have outperformed their original models. They’ve transformed into very unique companies with features that now inspire Facebook and Google. Chatbots have existed on WeChat for years, the New Retail Revolution has started in China, and live streaming commerce, i.e. buying items seen on the screen during live videos, is another consumer trend that inspires the rest of the world.

With a focus on science, technology and engineering, China is outpacing the US in R&D in deep learning and deep neural networks.  The huge volume of user data generated by its mobile savvy population allows its AI programs to engage efficiently with the user. The country is aiming to expand its AI products market to $15 billion, with a focus on the development of driverless cars and robotics.  The objective is to improve the quality of Chinese-made goods whilst upgrading the country’s factories with smart machines. Baidu, headquartered in Beijing, is  commended for its AI capabilities in the global scene alongside Google, Microsoft and IBM.  Beijing aims to make scientific development account for 60% of economic growth by 2020.