As much as I’ve enjoyed my regular trips to Beijing, Shanghai, and Shenzhen this year, the real highlights of my travels to China have been visits to some of the country’s so-called Tier 2 and Tier 3 cities, including Hangzhou, Nanjing, Ningbo, Huia’an, and Huzhou.
To say that I was impressed with the progress that these lesser-known hinterland cities are making in developing modern infrastructures and building new industries would be a gross understatement. No matter whether it’s electric vehicles, renewable energy, biotech, New Retail, or New Manufacturing, they are leading the way in driving innovation on a massive scale that is already starting to impact global markets.
Thanks to the rise of Alibaba, not to mention its stunning scenery and rich history and culture, Hangzhou is probably the best-known city outside the Big Three. The growing global influence of the area was brought home to me when I attended Empower Digital China in September this year and saw the steps that Alibaba is taking to leverage cloud, IoT, AI, and blockchain technologies to drive the proliferation of new products, processes and services through its New Retail and New Manufacturing initiatives.
The results of the New Retail initiative are already being seen in the explosive growth of automated stores and O2O (online-to-offline) services throughout China. Now that these ideas and business models have already been proven in the brutally competitive domestic market, there’s no doubt that they will proliferate at a rapid rate on the global stage. While cashierless stores may still be a novelty in many countries, it won’t be long before they become an integral part of the retail landscape.
The development of highly-automated processes for New Manufacturing will be much more complex and expensive than for New Retail, but by leveraging its close relationships with China’s industrial base Alibaba is well positioned to accelerate this trend on a massive scale.
Thanks in large part to the rapid growth of Alibaba and the ecosystem that the company has spawned, Hangzhou is well on its way to becoming a leading innovation hub not just for China but also global markets. It’s going to be fascinating to watch how it handles its next stage of development.