The internet and mobile markets are fairly global and universal in many ways, but in China, “Chinese-characteristic”, as many Chinese leaders describe their economic development models, indeed applies to their internet and mobile market evolution. Compared to the western progress, Chinese market has been through more of a leapfrog mode and bypassed many middle stages.
It all comes with the cultural. More and more Chinese business people and entrepreneurs have realized the distinction. Once they combine the technological innovations from other parts of the world to their own characteristics, a unique Chinese market is born. They hope that one day these unique offerings will be accepted by the west and other parts of the global- to the realization of a full circle of technology innovations and influences.
Evolution Stage One: Mass Internet and the information sharing age
Internet entered China rather late. The national infrastructure that supported the mass internet access has come into scale only in a little over one decade, thanks to the trans-Pacific fiber optic cables(first put into service in 2000), western investment and technology support, as well as Chinese government’s open market policies. Quickly the penetration flourished within such a large population who are so eager and curious to know everything outside after being labeled as “closed and backward” for centuries. The dominating scenes of the earlier age of this stage were those overnight internet cafés on street corners filled with smoke and younger people. Then high speed cables, desktops and laptops quickly entered common households at affordable prices, including remote cities and areas, and for all generations.
Evolution Stage Two: Social media and Ecommerce
Chinese like to stay in touch and chat. In the old days, everyone sat by street corners or in someone’s yard, now they have moved online. Local chat tool QQ enters household vocabulary. Text messaging runs everything. Sina, Sohu, Wangyi(163.com), Baidu, Alibaba, …, one after another internet startups became the symbols of a golden age of Chinese entrepreneurship. Weibo, WeChat (or Weixin, from Tencent), etc, offering similar functions to US Twitter, Facebook, etc but tailored to local Chinese, all flourished quickly in China, reaching millions of Chinese users in a short time window.
Most Chinese love to shop for deals too. With the modernization of the banking and credit card industries, online shopping which was way lagged behind the US or Europe, all of sudden is catching up in lightning speed. Transactions over one Single’s Day on 11/11, a fairly new thing from Alibaba, immediately eclipsed the entire US Black Friday sales. This year in 2013, Alibaba processed $5.75 billion total sales on one Single’s Day while American spent a total of $1.9 billion on Black Friday and Thanksgiving online combined. China is easily on the way to become the world’s largest e-Commerce market. Remember this is only with 40% of the internet penetration in China at this time, where still mostly the young, educated, and those living in cities, know how to shop on line doing e-Commerce transactions.
This is a stage that many people in China may have become too eager to jump start a new internet-based business or invest in one. Watch for some of the bubbles from the quick evaluations. It is still a growing market and growing process, far from maturity.
Evolution Stage Three: Mobile internet and new mobile devices with special chips or sensors.
This is the stage that’s been currently forming. Wasting no time, Chinese are catching up fast on what are available and advanced in the US and other places. Well, more and more, they start to value what they have locally and what could be truly “Made-in-China” too. China is quickly becoming the world’s largest mobile user market as well. It’s the fastest revenue growth region for Apple (IPhone and IPad), faster than Starbucks coffee and all fast food chains, and it is the key contending market for almost all device makers. Nokia used to lead here, but now Apple, Samsung, Google, HTC, LG, etc, nearly everybody, A local mobile phone producer and startup Xiaomi (named from a very Chinese-characteristic idiom in WWII) in August this year was valued at $10 billion USD just after three years in business. News just came out that on November 28, 2013 (the US Thanksgiving Day), it sold 150,000 smartphones under 10 minutes just through WeChat media alone.
Many of the young entrepreneurs in China today have finally realized the uniqueness of the China market in internet and in mobile. Robin Li, the CEO from Baidu and a Peking University graduate, mentioned about it in a recent Bloomberg interview and many talked about it in high-tech conferences with Chinese entrepreneurs. For Mobile Internet, it’s an entirely different platform than traditional internet. Mobile search is different than desktop search; many applications are going to be designed especially for mobile internet. This is a space everyone can compete on even ground nowadays.
High-tech industry evolves around the synergy of software and hardware. China is where many new devices are going to be made and new ideas are coming from. Even for many US companies, thinking about trying and implementing new ideas for mobiles, China is the first stop. Years of activities as the “world’s leading factory” have left enormous experiences, expertise and experimenting spirits in China for “making everything possible”. With the increasing demands for more smart sensing devices and customized applications, agility in China’s manufacture capability will play a key part in leading the innovations on providing new chips (China is also the major silicon manufacture destination), new sensors and new applications for smart mobile usages. This unique Chinese-characteristic advantage has already been realized by the local entrepreneurs and they just need to organize their ideas.
Evolution Stage Four and onwards:
What’s next? A truly innovative indigenous high-tech industry for China, or the world’s largest software, internet and mobile market? It could all happen in coming decades if not sooner. To become so, China needs invest in foundation software and technologies. Open Source provides a golden opportunity for the young and ambitious Chinese entrepreneurs to start on an even platform with the world and invent new without being labelled as “copy-cats”. A leading industry needs a well-formed self-evolving system. China hasn’t done much about forming their own sustainable high-tech management or innovation systems. They need that journey, with a lot more dedication, patience and longer-term planning than the current market and society have been displaying. Playing catch-up can only go so far as to stand side-by-side by your peers, but to lead forward, it needs the vision, the boldness and a good support system. Fortunately money and investment is no longer a thorny issue for many existing or becoming entrepreneurs in China. A new dawn is reckoning.
Reference news articles:
- A Single Chinese Company Dwarfed All Of America’s Black Friday And Thanksgiving Online Sales In One Day:
- China’s Xiaomi sold 150,000 smartphones in under 10 minutes… using a chat app: