Shanghai, Alibaba in digital deal

Internet giant's advanced tech to aid modernization in the metropolis

Shanghai will deepen its digitalization push as it builds itself into a global digital city, through a strategic deal with internet giant Alibaba Group Holding Ltd announced on Thursday.

The move aims to catapult the municipality to the forefront of economic opening-up, and deepen coordinated development across the Yangtze River Delta region, which includes neighboring Jiangsu, Zhejiang and Anhui provinces.

Shanghai's Party chief Li Qiang said the city will fully support Alibaba's industrial deployment and the promotion of innovative business scenarios in areas such as internet finance, new retail and smart city tech.

According to Alibaba Chairman Jack Ma, the company will introduce a growing number of new businesses, technologies, products and models to Shanghai.

Under the agreement, Alibaba and its financial arm Ant Financial Services Group pledged to raise their investment in the city. The efforts involve accelerating the construction of Alibaba's Hongqiao center - home to Shanghai's key transportation hub that connects numerous cities in the region - and the Shanghai headquarters of payment tool Alipay and wealth management platform Ant Fortune.

Alibaba vowed to enhance the city's service industry, which accounted for nearly 70 percent of its economic output last year. The company will provide its proprietary cloud computing, big data and internet of things capabilities, and bolster the development of new retail, smart logistics and environmental governance in the Yangtze River Delta region through digital means.

Shanghai's goal of becoming an international financial center will depend on technologies such as blockchain, mobile payments, credit scoring and financial risk controls provided by Ant Financial.

The partners will explore best practices in the building and administration of smart cities by expanding civil services-related mobile applications.

On the retail front, Alibaba promised to continue combining its online and offline resources by employing a suite of technologies such as artificial intelligence to benefit both consumers and merchants, and to increase Shanghai's allure as a leading shopping destination.

Alibaba said it will invite 200 top overseas brands to the China International Import Expo scheduled for November. It will leverage its consumer platform to help international merchants connect with Chinese shoppers.

It also plans to expand its Hema Fresh supermarket chain. The brand made its debut in Shanghai two years ago, with the prototype store merging digital and physical shopping experiences by adopting technologies to maximize operation efficiency.

Tang Huihao, deputy director of the Shanghai Statistics Bureau, identified "the new economy featuring the application of internet technologies" as a crucial factor driving economic growth.

Shanghai's total retail sales of consumer goods grew 7.7 percent in the first six months year-on-year, which Tang attributed to the proliferation of Alipay's mobile payment solution and Ele.me, an on-demand food delivery platform owned by Alibaba. Ele.me's daily transaction volume has topped 100 million yuan ($14.7 million).