Pinduoduo's Policy Smarts covers how the e-commerce upstart's focus on rural consumers has enabled it to ride on the poverty alleviation theme supported by the central government. note egaagreement that Pinduoduo signed with the Yunnan Provincial People's Government Poverty Alleviation and Development Office to partner in eradicating poverty in the province. Specifically, Pinduoduo would assist poverty-stricken households to cultivate commercially desirable agricultural products for sale on its e-commerce platform that would ostensibly reach a wider market and consequently better pricing and profits for the farmers.
On Friday, the local media reported that the Hebei provincial government and Alibaba Group (BABA) signed an agreement to cooperate in areas facilitating the acceleration of the development of the digital economy in the province during the 2019 China International Digital Economic Expo held in Shijiazhuang. Subsequently, various departments of the provincial government, high schools, and enterprises in Hebei signed specific agreements with the umbrella of companies under Alibaba in a move dubbed the "1+7" cooperation agreement, where the "1" referred to the provincial government and "7" the side agreements signed.
The scope of the cooperation included a financial services platform for the small and medium enterprises, an online industrial innovation center, an all-in-one digital map service for the tourism sector, a demonstration county for the "Intelligent Agriculture" industry, Hebei University's "Smart High School", and the upgrading of the "Hebei Digital Data Commercialization" platform. While details are scant, the names of the projects suggest the leveraging of Alibaba's wealth of data and developments in artificial intelligence to revolutionize the various sectors.
A day earlier, the Chongqing municipal government, Alibaba, and Ant Financial also signed a comprehensive strategic cooperation agreement. According to the agreement, Alibaba will build a regional headquarters based in Chongqing to help the municipal achieve its digital and intelligent transformation goals. The enhanced agreement follows the initial one signed on January 11, 2018, which had already shown results to a varying extent.
While the phrasing used in the Chongqing-Alibaba agreement was different from Hebei, the concepts are actually similar. For instance, the idea is for Alibaba to provide its expertise in helping Chongqing grow its digital economy, build "intelligent" cities, upgrade the manufacturing sector, talent training, and "revitalization" of the rural areas, where the latter typically refers to the adoption of data analytics and possibly artificial intelligence in farming.
In several articles on Alibaba, it is common to come across comments expressing fears of a government clampdown on Alibaba, for fear of it getting out of control, possible displeasure with co-founder Jack Ma, or non-compliance with regulations. Such government-level cooperation agreements would go some way to alleviate the concerns.
After Pinduoduo and Alibaba, another internet titan, Tencent Holdings (OTCPK:TCEHY)(OTCPK:TCTZF) is not going to be left out. The social media and gaming giant signed an agreement with the Hebei provincial government during the same event mentioned earlier held last Friday. According to the agreement, the two sides will tap on Hebei's strengths in policies, talent availability, planning, and industrial resources to leverage the core technology and financial capital strengths of Tencent specifically on the areas of mobile Internet, cloud computing, big data, and artificial intelligence.
While there might seem to have an overlap in the cooperation areas agreed by Hebei with the two tech giants, the development areas help reveal the unique strengths of Alibaba and Tencent. For instance, Tencent will work on enabling and promoting the usage of the ubiquitous and all-powerful messaging app WeChat and mini-apps within the chat app for government services, reducing the need for residents to go to the physical government offices to get things done.
The Hebei government is also very interested in developing its e-sports industry with the help of Tencent, hoping to tap on the emerging field to enhance its cultural and tourism appeal. Specifically, the two parties listed Tencent's League of Legends Pro League and the Honor of Kings Pro League for consideration to be hosted in Shijiazhuang, the capital city of Hebei, and one of the core cities designated under the Chinese government's JingJinJi Plan targeting the areas near Beijing for high-key developments.
There are, of course, still certain fields, such as big data, cloud computing, and artificial intelligence where there are overlaps and it would be interesting to see how the provincial governments manage the relationships between the two tech giants.