E-com­merce wave threat­ens to en­gulf small busi­nesses

China Daily (Canada) - - ONE WEEK FREE SMART EDITION -

mar­ket in the Zhong­guan­cun area, known as China’s sil­i­con val­ley.

“There are more sales staff than cus­tomers around here. Ev­ery­one buys on­line now.”

The floors are dot­ted with shut­tered shops, vic­tims of the rise of In­ter­net-based busi­nesses like Jack Ma’s Alibaba Group Hold­ing Ltd and bil­lion­aire Richard Liu’s JD.com Inc, which started out in Zhong­guan­cun al­most two decades ago.

The on­line revo­lu­tion prom­ises to boost pro­duc­tiv­ity and could cre­ate 46 mil­lion new jobs in China by 2025, many of them higher-skilled, ac­cord­ing to a re­port by New York-based McKin­sey & Co in July. The losers will be as­many as 31 mil­lion tra­di­tional roles, the equiv­a­lent of the en­tire em­ployed pop­u­la­tion in the United King­dom.

While such cre­ative de­struc­tion is a global phe­nom­e­non, its speed and scale in China are un­par­al­leled, said Cao Lei, direc­tor of the China E-Com­merce Re­search Cen­ter, a pri­vate re­search agency based in Hangzhou, the home­town of Alibaba.

“The In­ter­net helps im­prove pro­duc­tiv­ity and ef­fi­ciency, but it can be quite painful for tra­di­tional busi­nesses,” Cao said. “Book­stores fail first, then cloth­ing chains, then con­sumer elec­tron­ics stores, then air-ticket book­ing of­fices, and in the fu­ture, bank branches and other tra­di­tional ser­vices fa­cil­i­ties may fail.”

The shift on­line could con-

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