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Bryan Car CEO RooLife Group

Bryan Carr
CEO, RooLife Group

COVID-19: Catalysing Technological Innovation in a Shifting Landscape

The global pandemic is changing the ways we view and use technology. Temperature monitoring is fast-becoming standard practice for many businesses. Office-collaboration software is now vital commercial infrastructure. Meanwhile, growing demand for contactless services is fast-tracking innovations in drones, robots and supply chains. In December 2019, no one could have forecast that these technologies would be so vitally critical by the end of Q1. Amazon is even building in-house virus-testing facilities.

When COVID initially hit China, technology companies had to adapt fast to support the changing health and lifestyle needs of their newly house-bound users. Given China’s head-start on the recovery, their use of various technologies forms a valuable reference point for the western world. It many respects, China’s tech giants are emerging as natural leaders in the fight against COVID19.

However, for western businesses, it is important to recognise how different China’s digital landscape is. The industry has developed almost in parallel to the west. Where we use search engines and social media sites, China uses eCommerce platforms and super-apps. Over the past decade, the differences have grown as innovations continually compound on vastly different foundations. The implication here is that your China business requires a vastly different IT strategy. For most companies, this entails partnering with a locally grounded expert.

Accelerating East-West Technological Convergence?

All of this said, it could be argued that COVID19 is seeing to the convergence our vastly different industries. Last week, Facebook invested $5.7 billion into Indian giant Reliance Industries; with the aim of developing a super-app comparable to WeChat. Three days after securing the investment, the online shopping portal is already in testing. Meanwhile, Google is investing $550 million into JD.com to collaborate on the development of joint-retail solutions.

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Technology & Society

🛒 eCommerce

Last Wednesday, JD joined the growing number of internet giants enabling mini-program functionality. Since WeChat’s launch of Mini-programs in January 2017, they have become an integral component of China’s eCommerce and omnichannel retail environments. As we explored in our Retail and eCommerce exposé: China’s internet giants are primarily supporting SMEs through the current downturn by supporting them to set up mini-programs.

The move will provide Pinduoduo’s 585.2 million users with a much greater variety of competitively priced international brands. Gome is one of China’s largest electronic retailers.

Shoppers in China can now access many of their favourite malls and stores via Virtual Reality. In the context of a rising homebody economy, we will likely see major VR innovations over the coming months.

Livestreaming in China is forecast to hit USD$129 billion in 2020, up from $61 billion in 2019. In China, Taobao/Tmall is leading the charge. Driven largely by necessity, it appears that commercial livestreaming is now also taking off in the west.

In Australia, consumer demand for eCommerce is skyrocketing. While the growth has been stinted by supply chain blockages, major players are finally making headway. Coles and Woolworths are finally relaunching their online and delivery options. Meanwhile, eBay is expanding payment-management services to Australia. The move aims to remove payment ‘friction’; which is one of the key principles of China’s ‘New Retail’ movement.

As global demand for eCommerce skyrockets, we’re seeing a rise in industry innovation. For example, you can now list your products on Google Shopping for free. Instagram is adding gift-cards, eCommerce ordering functionality and fundraising tools. Amazon is currently testing video calls to verify third-party sellers. Meanwhile, Bytedance’s Tik-Tok is testing a ‘Small gestures’ eCommerce function.

Amazon is in hot water amidst employee claims that the giant is leveraging data from independent sellers to develop and launch competing products.

The list of eCommerce companies using drones to cut delivery costs and minimise human contact is growing. Businesses like JD, Tmall, Alphabet (Google), Amazon, SF Holdings and even Dominos Pizza are now utilising drones. According to Gartner, nearly 25,000 eCommerce-enterprise drones will be deployed in 2020.

💻 Remote-Work Collaboration

The Alibaba-Cloud based conferencing product supports 1080p video, ‘beautification’ functions and allows up to 500 people to join a conference. The move comes as a rising number of Chinese work-collaboration softwares launch ‘global’ versions.

ByteDance have released a ‘lite’ version of Feishu, only two months after the original platform was released. The company is also reportedly developing their own version of Google’s G-Suite. Last month, it was speculated that Bytedance may now be worth $100 billion.

Facebook’s Messenger Rooms now support chat-rooms of up to 50 people. However, Zoom is far from in trouble. Despite bans from China and Google, the company is reporting a 151% YOY rise in active users in March; outnumbering Microsoft Teams three fold.

🎮 Gaming

The world’s largest gaming company has partnered with the world’s largest telecommunications equipment maker. Their cloud-based joint project will significantly lower gamers’ hardware requirements.

In China, the explosive growth of ‘Animal Crossing’ recently has drawn strong media attention. On top of being removed from China’s major online marketplaces, it is now proving to be a melting pot for branding and eCommerce activity. Using games for marketing and branding is now commonplace for businesses in China.

Gaming already struck a whopping $120 billion sales record in 2019. Tencent’s PUBG mobile game claims World’s Highest Grossing Game in March. China accounted for 61% of its total revenue.

Facebook Gaming is taking aim at YouTube and Twitch by launching its’ own ‘game streaming’ platform. This will include a ‘Go Live’ feature to be launched later in the year.

🏥 Health

In China, drones are being deployed for quarantine surveillance, public broadcasts, temperature checks and spraying disinfectants. Importantly, they are also proving vital in the delivery of medical supplies and groceries. Meanwhile, autonomous robots are being deployed in hospitals to perform many of the same functions.

If you search for testing on Tmall or Taobao, you’re navigated to a dedicated booking page to arrange a nearby test.  A test will set you back 180 RMB.

This week, the Australian government launched its own COVID19 trace app. There is scepticism in Australia that the minimum 40% population-use threshold may not be achieved. This is largely due to data and privacy concerns of the general public, as well as push-back from digital rights activists. Much of the concern rests in Amazon Web Service (AWS) Key Management System. In a rare display of concern over personal data, some Chinese citizens are expressing similar concerns.

Flashing your health rating (via Alipay/WeChat mini programs) is now a pre-requisite for entering any commercial or public premises in China. In other words, you quite simply cannot leave your phone at home. For Chinese students returning to school, Tencent is also rolling out a specialised QR-code system. Meanwhile, municipal governments across China are leveraging fitness trackers to monitor the health of COVID survivors.

Similarly, the Australian government is rolling out a WhatsApp chat feature to support COVID19 queries.

With the masses fearful of visiting hospitals and doctors, many doctors are facing hard times. Across the world, countries are developing telehealth systems. Australia is also rolling out an electronic prescriptions system; to be launched in May.

A Reddit-like Forum is Being Hailed for its Role in Helping to Reduce the COVID19 spread in Taiwan. Similarly, Alibaba’s Dingtalk platform is freely available globally for ‘medical heroes’.

Mark Zuckerberg is leveraging his ‘superpowers’ to launch a Country-by-Country map of the pandemic. Similarly, Apple and Google have put aside their differences to jointly-combat the spread of COVID through contact-tracing.

"Since experiencing symptoms is a precursor to going to the hospital or becoming more seriously ill, these maps could be an important tool for governments and public health officials to make decisions on how to allocate scarce resources like ventilators and PPE, and eventually when it's safe to start reopening society."
Mark Zuckerberg giving presentation
Mark Zuckerberg
Founder, Facebook

📱 Other Tech Bites

President Xi Jinping has renewed China’s commitment to becoming a world-leader in 5G technologies. In China, 5G networks will comprise 90% of the US$180 billion investment forecast for 2020-25. By contrast, Australia’s recent 70% boost in NBN activity is causing congestion slowing internet speeds across the country.

The Australian government is forcing Google and Facebook to pay Australian media outlets to use their content. The move aims to level the competitive playing field in Australia, where the giants comprise two thirds of total online advertising spend. When Spain introduced comparable copyright legislation in 2014, Google simply closed their Spanish News services.

It took Wuhan residents all of nine minutes to claim $4.2 million in WeChat Coupons. Similar initiatives are taking off in the West. In America, 7-Eleven is providing prepaid cards to help ‘unbanked’ consumers access stimulus funds.

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Developments in Industry 4.0

🖥️ Artificial Intelligence and Machine Learning

Police and security guards across China are now wearing smart glasses to combat COVID19 spread. In spite of various controversies, out of necessity, COVID19 is accelerating our pursuit of thermal imaging, computer vision and biometrics.

The system will be able to create accurate simulations to optimise supply-chain synergies.

In 2015, China unveiled ambitious plans to become a global leader in AI technologies by 2030. Over the past five years, they have sought to achieve this through directly investing and supporting the industry growth as a means to promote industry competition. It appears the strategy is working.

Alibaba’s home-city Hangzhou recently transformed from one of China’s most congested cities to number 57 on the list. How? Alibaba’s City Brain: an AI-powered monitoring and GPS tracking system. The system which cuts commutes by on average 15-20% is now live in at least 23 cities across Asia.

The US has passed a law devoted exclusively to setting boundaries for the use of facial recognition technology. It’s important to recognise that the debate over privacy and personal data is vastly different between the east and west. Last year, San Francisco banned facial recognition technology. At the same time, Alipay added ‘beauty’ filters to their broad network of facial payment machines.

The move is helping the company to sort through the 19,000 applications for temporary call-centre positions.

☁️ Cloud Technologies

As the global workforce becomes increasingly disperse and globalised, Cloud technologies take on greater significance.

Over the coming three years, Alibaba will invest ¥200 billion into its cloud infrastructure. This follows a sharp rise in demand for business softwares resulting from the global pandemic.

The University of Sydney has its’ sights set on saving Australia’s endangered species using AWS services. The Amazon platform will be used to accelerate genomics research.

🚗 Automotive & Transport

A rising number of Chinese automotive sellers are switching to livestreaming and direct-sales via eCommerce. Increasingly, Tesla, BYD and Nio are switching to direct-sell models via eCommerce platforms.

COVID19 is forcing Didi (China’s Uber) to rethink many aspects of its business model. Over the coming months, they will launch a C2C car-rental service; supporting both short and long-term rentals.

Ordinary people in Changsha will shortly be able to ride in the fully autonomous Apollo Robotaxi.

🏭 Smart Manufacturing

Last week, we explored the rise of C2M ‘group buying’ models in China. With Pinduoduo outperforming Taobao by monthly active users, Alibaba are adapting. Last month, we saw Alibaba launch their own C2M platform. Following this, they unveiled plans to ‘groom’ 100 manufacturers in Zhejiang province to support their new model.

A network of over 1000 3D Printers in Washington – many owned by teenagers – are being leveraged to print medical gear for medical workers.

🤖 Robots

Human-to human disease transmissions are a double-edged sword: blocking supply chains and hindering retail operations. It’s no wonder global retailers are accelerating their adoption of robots to automate operations.

Wuhan-based firm Yangtze Memory Technologies announced recently that they have developed a 128-layer NAND flash memory chip in-house. Mass-production is set to commence sometime in the next 18 months.

The Monash University-led ‘Securing Antarctica’s Environmental Future’ (SAEF) Project will integrate robotics and machine learning to forecast environmental changes.

💴 Blockchain and Cryptocurrencies

Pilot schemes are approved for four cities across China. This comes as Facebook scales back their Libra Cryptocurrency project to manage regulatory hurdles. Starbucks, Subway and McDonalds are among the 19 businesses participating in the pilot program.

Alibaba is further cementing their role in China’s payment infrastructure. Many Chinese bank employees are already setting up their ‘digital wallets’. They can expect to receive half of their monthly transport subsidies in the national digital currency as early as May. The move comes as Bank of China recently announced that the digital Renminbi will not result in inflation.

The ‘Wanbao’ Blockchain zone in Loudi is the first designated blockchain zone in China. Several weeks ago, a government-backed alliance dubbed the ‘Chongqing Swiftchain’ was launched. The alliance already includes over 100 companies.

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