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China is No Longer a Technology Copycat or Underdog

Chinese net giant Tencent’s booth at the Global Mobile Internet Conference in Beijing in April 2017. (Photo courtesy Shutterstock)

I was born and raised in a small town in Southern China, but I’ve achieved two milestones in my life: my first contact with the Internet, and studying abroad in the U.S.

In 1999, I got access to the Internet for the first time. I was 13. At that time few Chinese families had access. Back then we would go to Internet cafés if we needed to use the Internet. I only found out later that 1999 marked the beginning of the Chinese Internet era, because that is when the “BAT” companies—China’s three Internet giants, namely Baidu, Alibaba, and Tencent—were all founded.

In the ten years that followed, I used all types of online services. Most were created by Americans, like Yahoo, Google, Facebook, and Twitter, while a few were Chinese. Some companies collapsed while others became giants.

After completing my undergraduate studies in China in 2009, I decided to go to the States, the center of the Internet. I got accepted to the graduate school of University of Florida where I majored in Information Systems. There I read the book The Facebook Effect by David Kirkpatrick. It was simply exciting to learn how Facebook was developed and to understand how Mark Zuckerberg was able to change the world with Facebook at such a young age.

At the same time, Chinese internet companies were also growing. However, at that time, most Chinese companies were just copying American products and services. For instance, Baidu was a copycat of Google, Xiaonei was one of Facebook, and Alibaba was one of eBay.

After graduating from UF, I drove along Highway 10 all the way from Florida to California, looking forward to working in a company like Facebook. However, eventually I realizEd that my ability in programming wasn’t sufficient to get me a job offer from a mainstream Silicon Valley tech company . I had to look for another way.

Fortunately, I am a competent blogger. I have been writing blogs since I was 19, and have served as a contributing writer for several Chinese media sites. I received a welcome phone call from the editor-in-chief of China Entrepreneur Magazine, who offered me a position in China. So I went back to Beijing and became a tech reporter.

That was in 2012. China’s mobile internet had just emerged, and was suddenly crowded with developers of mobile apps. I spoke with different entrepreneurs every day, and gradually came to realize that Chinese companies were no longer copycats; they were becoming innovative enterprises. They created lots of products for mobile payment, e-commerce, and O2O (Online to offline), etc.

At that same time, more and more American companies were looking to break into the Chinese market. Tesla  was one of them. Back in 2013, I got an opportunity to interview Elon Musk. I was only able to contact him by guessing his email address at first. In my email to Elon which requested a personal interview, I said, “when some of the most admirable Chinese companies were still underdogs, we were the ones that put them under the spotlight. And now it is your turn.”

Throughout the next few years, I shuffled between China and the States. I quickly realized the two countries are on two distinct roads in the Internet domain. And many in Silicon Valley shared my opinion. When I interviewed various entrepreneurs and investors in Silicon Valley, they always had many questions about China.

Thus, the idea of starting a media website came to me, and I was inspired to create Pandaily. We translate Chinese news articles and reviews into English, so the folks at Silicon Valley and around the world can get a better picture of innovation in China.

So what are the major differences between China and the US?

  • First, there are market differences. The States has very mature and comprehensive infrastructures. In the Bay Area, for instance, you can easily find Costco, Walmart, Target, and all kinds of shops in every town. You can easily drive to a supermarket close by, buy a weekly supply of essentials in bulk, and drive back home with the goods at your convenience. This is not the case in China at all. Not every Chinese family owns a car. And since most people rely on public transport to get around, it isn’t exactly easy to shop for essentials. Thus, China gave birth to the very well-developed e-commerce and sharing economy that we know today.
  • Next, as the second largest economy in the world, China’s massive market success allowed domestic companies to develop and grow independently. China is much more unified than Europe in terms of language and culture. As a result, most Chinese Internet companies are more willing to focus on domestic markets and not foreign ones.
  • Finally, the Chinese government is ready to embrace new technologies. If you have ever been to China, you may have noticed that 4G Internet coverage includes most rural areas. Furthermore, China’s high speed rail can travel at as fast as 350km/hour. And what’s even more impressive is that shared bicycle systems can be found everywhere in cities. They really are ubiquitous.

In the last few years, I have heard lots of complaints from American businesspeople about the Chinese government and its protectionism, along with the Great Fire Wall which hindered their entry into the Chinese market. They told me that while these protections have incubated Chinese Internet industries, without this sort of safety net underneath them, those companies would not have become able to compete with companies in Silicon Valley.

Shared bicycles from a raft of competing services block a pathway in Beijing in July 2017. (photo zhangjin_net / Shutterstock.com)

I do not want to comment on these remarks, nor do I find it meaningful, since we cannot travel back in time. And no one can deny that Chinese Internet companies today are strong and powerful. They are now the fundamental core in transforming the Chinese society. Alibaba and Tencent are two major tycoons constantly transforming China in various fields such as banking, food delivery, retail, and entertainment. There are many innovations in China worth studying and learning for Silicon Valley.

We can also say without exaggerating that Chinese cities are entering an era of a cashless society. When I go out there, all I need to bring is my cellphone, and I’m set. Apple’s CEO Tim Cook has often said he wondered why Apple Pay hasn’t yet broken into the Chinese market. Perhaps he would understand better if he saw for himself how Alipay and Wechat Pay are just much more user-friendly than Apple Pay. Anyone with a smart phone with an internet connection can pay just by scanning QR Codes, without any additional devices or chips. And the cost of printing a QR Code is virtually nothing.

Furthermore, for Chinese tech companies, the usage cycles of various products are much shorter. One interesting phenomenon that I’ve noticed in Silicon Valley is that often product managers are older than those in China. The reason, I suppose, is that in Silicon Valley, mobile Internet evolved from the Internet, and the Internet evolved from the IT industry. Whereas in China, most companies start off with mobile internet, which allowed the younger Chinese generation to use smart phones at a very young age. Consequently, all product managers had to start from scratch and learn from the beginning. Thus, it is no wonder that product managers in China tend to be younger.

If we want to see whether Chinese or US companies are more competitivbe, we can only measure their strengths objectively by how they compete in the emerging markets. For example, in India and South East Asia, where the population is measured in billions, people are relatively young and full of vitality. On the app store in those countries, you will find that among the top 100 apps, close to half are from China. The entrepreneurs there are more willing to learn from China’s proven experience, rather than that of the Silicon Valley. In the competitions in messaging between WeChat and WhatsApp, and in devices between Xiaomi and Apple, we will see who emerges on top in this exciting competition.

When I first set foot in the US in 2009, it was the center of technology across the globe. But now, I think China is becoming another center. The US has always been a nation of learning. Some of the greatest American companies, like Starbucks and Nike, were once also underdogs and copycats of European and Japanese companies. But really, imitation is but a process of learning; and innovation knows no bounds. Thus, I sincerely recommend that American entrepreneurs visit China and see for themselves, what the Chinese have accomplished.

Kevin Zhou will be at Techonomy 2017 in November.

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