Digitalization is having a much different impact on everyday life in China than in the West. The big names here are Alibaba and Tencent – for everything from communication and meals to payments and transportation.
In Germany, you can hardly get around WhatsApp, Facebook or Instagram when it comes to digital communications: Facebook has 31 million active users in Germany, and an astounding 94 percent of people between the ages of 12 and 19 communicate via WhatsApp. But what does this have to do with China? Nothing. And the reason is pretty simple: These digital heavyweights are pretty much pipsqueaks in China. The big names here are Alibaba and Tencent – for everything from communication and meals to payments and transportation.
The Chinese also like to pick up their smartphones when they get out of bed in the morning to greet their friends. They also use a green icon like the one for WhatsApp. But the similarity stops there: The Chinese use a service called “WeChat”, or “Weixin” in Chinese. When you first look at the logo, you think it is indeed the Chinese version of the U.S. provider. But, after just a few clicks, you notice the difference: The app made by the Chinese company Tencent can do much more. WeChat combines a messenger service, social media, online shopping and payment to create a completely integrated mobile ecosystem.
Thanks in large part to WeChat, China is the country with the largest percentage of mobile online retailing. The approximately 938 million users also use it to organize their daily lives. Companies can present themselves here with their own account, sell products and contact their customers. After climbing out of bed and sending good-morning greetings to their friends, many users then go online to shop for things like shoes or even that day’s breakfast.
WeChat combines a messenger service, social media, online shopping and payment to create a completely integrated mobile ecosystem.
Eating plays a very important role in China. As a result, hungry Chinese can quickly find their next meal in many other places than WeChat. The selection of food-delivery companies is simply huge. One real favorite is a start-up that went into business at Shanghai Jiao Tong University in 2008: “Ele.me.” Today “Ele.me” is China’s largest meal-delivery service with more than 3 million couriers in 1,400 cities and a gigantic fleet of motorcycles. A total of 130 million people order meals from “Ele.me,” which means: “Are you hungry?”
Last week, the e-commerce giant Alibaba acquired “Ele.me” for the equivalent of $9.5 billion. Together with the restaurant service Koubei, this spectacular deal is part of Alibaba's new strategy of “online to offline.” Of course, the rival Tencent has its own food delivery services, too: “Meituan.”
“Ele.me” – “Are you hungry?”
The meal has been selected and should be right around the corner by now thanks to the huge fleets of motorcycles that these services use. It is now time to pay. In China, hardly anyone has paper money in his or her pocket. Here, too, the huge competitors Alibaba and Tencent go head to head with their own payment services: Alipay and WeChat(-pay). Both Alipay and WeChat are accepted by nearly all stores, supermarkets and filling stations. You can even pay digitally at a small noodle stand located on the outskirts of town. A total of 772 million Chinese use the Internet, usually on their smartphones. And they all pay with them. Alibaba and Tencent organize more than 90 percent of non-cash payment transactions in China. The Chinese shelled out the equivalent of $13 trillion from their digital wallets last year. 54 percent of this total was transacted on Alibaba’s Alipay and 38 percent on Tencent’s WeChat.
You can even pay digitally at a small noodle stand located on the outskirts of town.
The meal has now been ordered and paid for. The food is at the front door hardly before the customer has had time to get dressed. The small fee of 30 cents to 50 cents is part of the overall price.
For those who actually want to venture out into the real world after eating, the smartphone is once again their device of choice. For short trips, they can turn to the apps offered by the two largest bicycle rental companies: Mobike and Ofo. Millions of their silver-orange (Mobike) or bright yellow (ofo) bikes crowd Chinese sidewalks. The rental process is simple: Registered users begin by scanning the QR code of the particular bicycle. They then receive a combination for the lock. Seconds later, they are on their way. The first hour is usually free of charge. Afterward, a fee of just a few cents is charged. And that is not including the specials that are regularly offered.
Luxury limousine, minivan or an electric vehicle?
Chinese who do not want to climb onto a bike or have to travel long distances can turn to Didi Chuxing, the world’s largest ride-sharing service – the company’s value approaches $56 billion. Eighty percent of trips in China are handled by Didi. Even the U.S. competitor Uber raised the white flag and pulled out of the Chinese market. The reason can be found in the huge array of choices that Didi Chuxing offers: Which vehicle would you like? If you are talking about an evening dinner with your wife or girlfriend, then you may be interested in the luxury limousine operated by a driver clad in a suit and tie. Then again, you may be heading to the airport with your family and a heavy load of luggage. In such cases, a minivan is probably what you need. If you are dedicated to the environment, you can order an electric vehicle. The options offered by Didi Chuxing are designed to meet just about every need. By the way, Didi Chuxing is the only company in which China's huge rivals – Alibaba, Tencent and Baidu – have made a joint investment.