From copycats to innovation leaders
April 3, 2017 Category Macro-economy, Weekly
For a long time, Chinese companies have been known for copying market-proven products, brands and business models from the West and adapting them for the local market with only minor modifications, a phenomenon known as “shanzhai”. Western media accuse Chinese companies of being unfairly protected in their copy-cat behavior. However, the by-product of such protectionism has been the development of a unique innovation ecosystem. The innovation brought about by China is different from that in the West, and it is influencing both emerging and developed economies. Chinese internet companies are often compared to their Western counterparts based on the similarity of their business models. For example, Baidu is known as the “Google of China”, Alibaba as the “eBay of China”, and Xiaomi as the “Apple of China”. Those Chinese companies have now evolved. Though Alibaba adopted an eBay-like model in its early years, it has gone through so many changes that, today, its business model can best be described as a combination of the models of at least three internet titans – Google, eBay and Amazon. In fact, the success of many Chinese companies, across sectors, has depended on their ability to evolve and adapt foreign ideas for the mass market. Another example is Tencent, which launched WeChat in 2011, a simple instant messenger mobile application that gradually evolved into a global “super app”, with one-stop hybrid features of Western models such as WhatsApp, Facebook, Instagram, Skype, Uber, Tinder and others. Today, WeChat has 846 million monthly active users worldwide. There are also a number of areas where Chinese companies are ahead of the rest of the world, such as in the emerging industries of internet finance, new social media, artificial intelligence, virtual reality, augmented reality and intelligent transport. Stationless bike-sharing is the latest export of China-originated innovation. Mobike, the leading player, has gone from zero to 23 Chinese cities in 10 months, recording 200 million rides since its launch in April 2016. It is now expanding into overseas markets, the South China Morning Post reports.
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