Although the sudden epidemic in 2020 temporarily affected the development pace of some companies, it has organically driven a wave of traditional businesses to gradually accept and adapt to the new scenario, and continuously upgrade their online digital capabilities. Partially, powered by new technologies, Shanghai, which was relatively quiet amidst the booming Internet landscape, suddenly saw the emergence of multiple leading platforms, including e-commerce giant Pinduoduo, whose founder once surpassed Jack Ma and became China’s second richest person, as well as rising giants in different fields such as Bilibili, Weimob, and Xiaohongshu.

Under the general trend, new formats including e-commerce, short video, livestreaming-based product sales, remote office, and online education have emerged one after another. No matter how different these fields are, what is required behind each is solid technical infrastructure.

On May 22 this year, at the third session of the 13th National People’s Congress, Premier Li Keqiang, on behalf of the State Council, delivered a government work report.

Li Keqiang pointed out in the report that the country will promote the upgrading of manufacturing and the development of emerging industries, and substantially increase mid- and long-term loans to the manufacturing industry. The country will also develop the industrial Internet and promote smart manufacturing. Based on the important role played by new business formats such as e-commerce, online shopping, and online services in the fight against the epidemic, it is necessary to continue to introduce support policies, comprehensively promote “Internet +”, and create new advantages in the digital economy.

In reality, the most typical case is the emergence of Pinduoduo. Its founder Huang Zheng once founded an e-commerce agency company and a game company. This time, Pinduoduo has developed rapidly through the social e-commerce model of low-cost group purchase. It took only four years to complete the process from the establishment to the Nasdaq listing. After its listing, Pinduoduo reaped traffic and users with a 10-billion-yuan subsidy program, and took the second place in China’s e-commerce platform. Currently, Pinduoduo has a market value of over US$100 billion, which is comparable to JD.com and more than twice the market value of Baidu.

Also, Bilibili, which has gathered a large wave of young users, also becomes a key player in Shanghai’s new economy. In 2009, Xu Yi, a post-1985, founded Bilibili in Shanghai. Initially, it was just a quadratic element website gathering many young people who love animation or are nerds, as it is outside the mainstream culture circle. Nowadays, Bilibili is gradually “breaking the circle” to reach to the general public, while gaining recognition from the mainstream commercial community. In 2018, Bilibili was listed on Nasdaq in the United States, becoming the world’s first listed company that specializes in quadratic elements. On July 21 (EST), the closing price of Bilibili was US$44.16, with a total market value of US$15.254 billion.

In addition, emerging trends like unmanned factories, industrial Internet, remote office, online finance, online entertainment, online exhibitions, fresh produce e-commerce, “contactless” delivery, online education, and online healthcare have empowered new technology companies to post explosive growth with sizzling data. In recent years, a number of listed companies in the new economy field have emerged in Shanghai, such as Pinduoduo, Bilibili, Ping An Good Doctor, China Reading Group, Zhongan Online, Dada Group, Weimob Group and Yixin Group. These eight are all unicorn companies on their respective tracks, making Shanghai’s Internet landscape present innovative and diverse characteristics. On July 20, the HSI announced the launch of the Hang Seng TECH Index. The new index will track the 30 largest Hong Kong-listed technology companies, including five Shanghai-based new-economy companies, namely Weimob Group, Ping An Good Doctor, China Reading Group, Zhongan Online, and Yixin Group.

Among the unlisted companies, Xiaohongshu, Ximalaya, Dingdong Maicai and other companies are equally outstanding in terms of valuation and influence.

At the recent World Artificial Intelligence Conference in Shanghai, 36 key AI projects were signed, and several autonomous driving technology startups, including Allride.ai and Pony.ai, will settle in Shanghai to help the city accelerate the development of a global smart mobility highland.

An executive with Pony.ai told China Business News, “The presence in Shanghai will bring a new, complex, and diverse autonomous driving test environment and urban traffic scenarios to Pony.ai. It will help improve the generalization capabilities of the technology, strengthen the connection with supporting industries, improve the supply chain system and accelerate the growth of autonomous driving technology from testing and research to large-scale applications.”

Behind re-emergence of the new economy, both traditional industries and emerging technology fields are inseparable from the support of cutting-edge technologies.

On one hand, Shanghai, as the first place for 5G commercial use, has been leading the acceleration of 5G infrastructure construction. 5G is empowering traditional industries to transform and upgrade, cultivating emerging industries, and facilitating the improvement of Shanghai’s industrial structure.

On the other hand, as the underlying SaaS foundation, infrastructure technology providers like Weimob provide strong support to merchants in the new online economy. For example, the impact of the epidemic on catering, retail and other industries is direct, including some traditional offline businesses and offline education institutions, but these institutions have successfully transformed towards online and survived the crisis by leveraging SaaS platform technology.

In May this year, Weimob announced the establishment of a smart catering company to create a “3-in-1” integrated solution (dining, takeaway, and e-commerce) for catering businesses to help them transform towards digital catering.

In the retail industry, Weimob and Mulsanne Group (1817.HK) have carried out in-depth cooperation in stores, brands, marketing, membership, and shopping guides to create a smart retail digital intelligence platform. Sun Taoyong, Chairman and CEO of Weimob Group, stated that digitalization is the new infrastructure for retail companies in the future. The three core capabilities that retail companies need to achieve digital transformation are full-time operation in all domains, private domain asset appreciation, as well as public domain expansion and consolidation.

In addition, QuestMobile data showed that in May 2020, the number of monthly active users with mobile shopping apps increased by 26 million compared with the same period last year, a year-on-year growth rate of 2.7%. Among them, the monthly active users of fresh produce e-commerce apps increased by 21.9% year on year.

Under the influence of the epidemic, online fresh produce e-commerce is booming. Some offline retail stores have leveraged online operations such as mini-program malls or community-based sales. These business models will also endure after the epidemic ends, thus further altering the business model of the retail industry.

In the post-epidemic era, many brick-and-mortar retailers are also thinking about how to use smart retail to divert users accumulated online to stores, so as to further integrate online and offline channels, and further enhance the loyalty of private domain users. Sun Taoyong said that as merchants are paying more attention to private domain traffic, Weimob collaborated with brands to form a joint force to explore more new ways of private domain livestreaming and long-term management of private domain traffic.

At the executive meeting of the Shanghai Municipal Government, the policy document “Shanghai Action Plan for Promoting the Development of Online New Economy (2020-2022)”, which attracted much attention from the industry, was passed in principle. The plan clarified four “100+” action targets. The plan proposes that by the end of 2022, Shanghai will be built into an internationally influential and domestically leading “online new economy” highland.

Among them, the four “100+” refer to gathering “100+” innovative enterprises, with a focus on those mastering core technologies, owning independent intellectual property rights, and having international competitiveness; accelerating the cultivation of over 100 high-growth innovative enterprises, with a focus on supporting 10 innovative leading companies; launching “100+” application scenarios with a focus on user traffic and catalyzing the new online economy; creating “100+” branded products, by promoting the trials of new products, and accelerating the commercialization and industrialization of innovative products; realizing breakthroughs in “100+” key technologies, aiming to allowing technological innovations continue to emerge and to ensure the industry’s core competitiveness is significantly enhanced.

The plan will focus on 12 key sectors including unmanned factories, industrial Internet, remote office, online finance, online entertainment, online exhibitions, fresh produce e-commerce, “contactless” delivery, new mobility, online education, online R&D and design, and online healthcare. For example, in terms of unmanned factories, the city plans to build more than 100 unmanned factories, unmanned production lines, and unmanned workshops to accelerate the intelligent transformation of high-end equipment, automobiles, aerospace, biomedicine, electronic information, steel and chemical industries.

The above fields all require strong technical support, and the importance of underlying technical support is once again emphasized. Many companies at the forefront of retail digitalization have been challenged by the epidemic and are thinking about how to further amplify the value of private domain traffic. Among them, Weimob, as a service provider of smart retail solutions, has already succeeded in exploring the new gameplay of private domain traffic.

Such practice has been verified by specific financial data. In March 2020, Weimob Group announced its 2019 financial report. Results showed that the company’s revenue and net profit increased significantly in 2019, and it achieved profitably in all segments. The annual revenue reached 1.437 billion yuan, a year-on-year increase of 66.1%. Net profit reached 311 million yuan, thus achieving profitability in all ranges.

It is worth noting that the substantial increase in the overall performance of the Weimob Group in 2019 was mainly due to the substantial increase in the revenue of the two core businesses, namely SaaS products and precision marketing. The growth is inseparable from Weimob’s technological empowerment of vertical industries such as e-commerce, retail, catering, local lifestyle, accommodation, and tourism. Under the digital wave, the core capability to fight sudden challenges always exists in the accumulation of their respective core technologies.