Digital redefines Sino-Japanese ties
2018-10-29 09:38:25 China Daily Li Yan
E-commerce and mobile payments are transforming socio-economic sphere
New-age business models powered by technology and innovation are heralding a new era in Sino-Japanese economic cooperation, in the process helping the two nations to be pragmatic and not allow their bitterness-laced past to influence the present and potential benefits of a shared future.
Driving this practical approach are 21st-century Chinese enterprises engaged in cross-border e-commerce, mobile payments and sharing economy-related businesses.
Emerging fields such as artificial intelligence, new materials and other cutting-edge technologies will likely further bridge Sino-Japanese businesses, spawning unprecedented benefits for consumers in both countries, and creating big opportunities for many industries across continents, experts said.
Evidence of this trend comes from Chinese e-commerce players that are stepping up efforts to expand their presence in Japan.
Alibaba Group Holding Ltd said Japan is one of its most important markets. So far, 1,370 Japanese brands have found consumers on Tmall Global, Alibaba's business-to-consumer or B2C platform for international brands and retailers.
These Japanese brands cover food, cosmetics, home appliances, maternal and child products, fashion and personal care.
Japanese merchants on Tmall Global notched up a 122-percent year-on-year rise in sales in the fiscal year to Marchend, according to Alibaba.
Its New Retail strategy, Alibaba said, combines online and offline platforms to transform the retail experience for consumers. This makes hot products hotter as Chinese consumers gain access to top-quality Japanese products.
In fact, rising demand for such products among Chinese consumers led JD to establish its Japanese subsidiary in August 2017. JD is another prominent Chinese e-commerce player with additional presence in logistics, delivery and intelligent retail. Its unit in Japan now helps JD to do business directly with local manufacturers.
In September, JD Worldwide, JD's cross-border e-commerce platform, announced the opening of a procurement center in Tokyo. It is the first such center of JD around the world.
JD Worldwide has attracted Japanese department store chain Isetan Mitsukoshi Holdings Ltd to open an online flagship store. Moreover, it has signed strategic cooperation agreements with Japanese cosmetics company Kao Corp, and coffee and beverage maker AGF.
Zhu Dan, general manager of the Japan-South Korea sales and marketing center of JD Mall, the online marketplace of JD, said sales of Japanese products on the platform are estimated to double within a year.
Liu Qiangdong, founder and CEO of JD, said heightened popularity of Japanese products on e-commerce platforms reflects changing consumption patterns in China.
Moreover, as household incomes increase, a growing number of Chinese consumers are attaching great importance to brands, quality and product safety.
In May 2016, JD began cross-border e-commerce operations targeting Chinese consumers in cooperation with an affiliate of Japanese delivery firm Yamato Holdings Co Ltd. In addition, it signed an agreement with Mitsubishi Chemical Corporation in June 2017 to adopt the latter's plant factory system and technological tie-ups in the areas of vegetable cultivation and hygiene control.
To further develop its business in Japan, JD began striving to increase the number of Japanese products delivered to Chinese consumers. It also started to further bolster its online shopping sales by investing in Japanese small and medium-sized enterprises.
Official data showed bilateral trade between China and Japan rose to $300 billion in 2017 from $236 billion in 2007. Japanese investment in China rebounded at a faster pace, and Chinese investment in new economic models in Japan such as cross-border e-commerce, mobile payment, and sharing economy is also increasing.
The number of mainland tourists visiting Japan in 2017 reached 7.3 million, up 15 percent year-on-year.
In the field of mobile payments, Chinese players are accelerating efforts for cooperation with Japanese partners to build a cashless environment for tourists.
Alipay, a mobile and online payments platform operated by Ant Financial Services Group, an affiliate of Alibaba, announced in September that it would collaborate with Japanese partners to strengthen cashless experience across the country for tourists before the 2020 Olympic Games begin in Tokyo.
"We look forward to working with a wide range of Japanese partners to achieve this ambition, and in doing so contribute in some way to driving the local economy of areas across Japan," said Eric Jing, executive chairman and CEO of Ant Financial.
According to Alipay data, Chinese visitors' spends through mobile payments are growing rapidly in Japan.
From July to August this year, a Chinese tourist in Japan used Alipay to spend nearly 3,900 yuan ($562) per trip on average, up 52 percent year-on-year, boosting total transaction volume by 165 percent.
Alipay's collaborations with regional Japanese banks such as Hida Credit Union and Kyoto Shinkin Bank have allowed it to make its payment services available at tourist spots and shops in major cities.
The company said it is seeking to further expand its merchant network through tieups with more small and micro-sized merchants and by cooperating with local mobile payment platforms such as Line Pay and Paypay.
Alipay was launched in Japan in December 2015 to provide services to Chinese visitors at local merchants. It is currently available in all 47 prefectures across Japan. It is also available at a wide range of tourism-related outlets like airport shops, department stores, restaurants and popular attractions.
Alibaba's success in Japan has inspired other Chinese players to follow suit.
WeChat Pay, which is owned by tech giant Tencent Holdings Ltd, became an official mobile payment partner for Japan's Fuji-Q Highland in July.
Most of the stores in the park can use WeChat Pay. Visitors can also use WeChat to buy tickets at a discount, explore the map and check how long queues are at ticket counters and entrances.
Zheng Hongmin, marketing director of Tencent's WeChat Pay international business, said the payment tool division of Tencent collaborates with companies in the retail and catering industries. "But now, we want to bring convenience to Chinese tourists in more aspects like entertainment."
WeChat Pay entered Japan in 2016, and has expanded fast. In June 2017, the number of transactions via WeChat Pay in Japan increased 16 times compared with January 2017.
"The new technological revolution has greatly expanded the fields of cooperation between China and Japan, and the prospects for the cooperation between the two sides are promising," said Ma Mingjie, director-general of the research department of innovation development at the Development Research Center of the State Council.
Ma explained that in the process of pushing forward digital transformation, China and Japan not only attach importance to using new technologies to promote economic transformation and industrial upgrade but also pay attention to using new technologies to serve social development and enhance public service capacity.
China and Japan also see a lot of cooperation opportunities in the booming sharing economy sector.
Chinese bike-sharing platforms such as Mobike Technology Co and Ofo Inc are accelerating their forays into the Japanese market.
In June 2017, Mobike launched a bicycle-sharing service in Fukuoka, marking its Japan debut.
So far, Mobike has offered its services at Nara, Mount Fuji and Kanagawa, and is aiming to provide services in more large and medium-sized cities and at tourist attractions.
In December 2017, Mobike announced it inked a strategic partnership with Line Corp, the company behind Japan's most popular mobile messaging platform Line.
The deal will give Line the largest minority stake - it will be no more than 20 percent - in Mobike Japan.
Mobike's competitor Ofo announced a new partnership agreement with Japanese technology firm SoftBank Commerce & Service Corp to expand its bicycle-sharing services in Japan last year.
Ofo said Japan was a key market for its expansion across the Asia-Pacific region. It aims to improve local transportation ecosystems, Ofo said. "We strive to further improve the convenience and cost-effectiveness that cycling can bring to people in Japan," said Lawrence Cao, head of Ofo's Asia-Pacific business.
Tujia, a Chinese online platform for booking shared accommodation, is chasing the rapidly growing number of outbound Chinese tourists who fancy visiting Japan. It is ramping up efforts to expand its presence in the Land of the Rising Sun.
Tujia set up a small team in Japan in 2016, with a plan to boost its presence to take advantage of the 2020 Olympics in Tokyo. Last year, it teamed up with Rakuten Lifull Stay, an e-commerce company in Japan, to expand Japan's homestay market.
Jiang Zengwei, chairman of the China Council for the Promotion of International Trade, said by cooperating with Chinese firms, Japanese enterprises can give full play to their advantages in high-end manufacturing, intelligent manufacturing and biotechnology.
They can also strengthen technological exchanges and personnel training, so as to boost the optimization of China's industrial structure, and add new impetus to innovation and development, he said.
