Asharq Al-awsat English https://aawsat.com/english Middle-east and International News and Opinion from Asharq Al-awsat Newspaper http://feedly.com/icon.svg

How Useful Is Big Tech in a Covid Lockdown, Really?

How Useful Is Big Tech in a Covid Lockdown, Really?

Wednesday, 11 May, 2022 - 05:15

China’s consumer-tech companies are riding an endless train of trouble. Just as the government seems to be easing its regulatory crackdown, consumer fatigue — even disinterest — is setting in.


At an April meeting of the Politburo, the top government policymaking body, Beijing vowed to support the healthy growth of platform companies, a statement interpreted by many analysts as the end of the government’s year-long campaign to rein in big tech across a wide range of issues, from antitrust to data security. Beijing’s crackdown cost tech companies as much as $2 trillion of market value, the equivalent of 11% of China’s gross domestic product, estimates Goldman Sachs Group Inc.


But a potentially bigger threat looms: Citywide lockdowns are forcing consumers to seek alternatives and question how useful Big Tech really is.


For years, e-commerce was the crown jewel of Chinese tech industry, with online shopping accounting for a much bigger share of retail sales than in the US. Companies such as Alibaba Group Holding Ltd., JD.com Inc. and Meituan invested heavily to build distribution and logistics networks, going as far as sourcing fresh produce directly from farmers and recruiting armies of migrant workers for speedy deliveries.


The Shanghai lockdown, which started on April 1, disrupted the entire business model, helping send Hong Kong’s Hang Seng Tech Index down 31% this year, more than double the benchmark Hang Seng Index. The price of hiring riders has soared, and a large number of delivery workers are stuck at home. As for those who can work, many can’t go back to their families at the end of the day because the government wants to minimize traffic in and out of residential areas. As a result, e-commerce companies have to offer free accommodation or risk their riders going homeless.


Last month, internet companies dispatched about 20,000 riders to fill 2.5 million grocery orders a day to the city of 25 million, according to the Shanghai government. While this number looked sizable, that’s only about one-third of pre-lockdown levels, according to CLSA estimates.


So instead of e-commerce, Shanghai residents have turned to analog strategies — their social skills and the kindness of their neighbors — to meet basic needs. Community buying, in which residents at the same address band together to make bulk purchases of groceries in a single order from suppliers and restaurants, has become very popular. Neighborhood volunteers take it upon themselves to contact merchants and couriers, drop off each order door-to-door, and check on the elderly who don’t know how to use smartphones.


Meanwhile, WeChat, operated by Tencent Holdings Ltd., is no longer serving as the digital town square where users remain endlessly engaged. The social media super-app has been quick to censor criticism and skepticism of President Xi Jinping’s Covid-zero policy, deleting plenty of content — from a six-minute video that documented the pleas of Shanghai residents, to photo blogs of old people dragged to makeshift quarantine centers, and even articles on China’s cybersecurity law and censorship regulations.


Nowadays, when one tries to open a link, “unable to view this activity” seems to be the norm. Increasingly, people use code words to describe sensitive topics such as Covid-zero and emigration out of China, and many who used to be chatty on WeChat have gone silent. Some migrated to Telegram. WeChat has become a digital contact list — and nothing more. It ruined user experience, many of us feel.


Before the pandemic, tech companies made life easy. Bubble tea could be delivered to your office within 15 minutes, and WeChat messages lit up all day along. Now, Covid lockdowns have left many of us with that sour aftertaste. We remember the futile attempts to place online grocery orders at 6 a.m., and the spite that wells up when social media is censored.


So when millions of Chinese re-emerge from their lockdowns — whenever that is — many might find they’ve broken their addiction, preferring real face time with humans instead of the virtual kind. Sometimes, to connect with others, you have to disconnect from the phone. But what does that mean for the business models of Big Tech, which is all about hooking users to their screens?


Bloomberg


Other opinion articles

Editor Picks

Multimedia