2017: The year of China tech

China Plus Published: 2017-12-25 16:57:44
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By Michael Spencer

In 2017 China quietly showed it is the future of technology. An incredible rebound by Xiaomi, a record-breaking Single’s day performance by Alibaba and JD.com. Tencent has created an entertainment empire and is now valued at more than the western social media company, Facebook. 

We saw how quickly Tech startups can scale globally coming out of China, with the arrival of a pair of bike-sharing companies Mobike and Ofo, who will likely merge in 2018. Combined with the way Tencent, Alibaba and Baidu among others invest in startups in Asia means the innovation ecosystem of the East will very soon be evolving much faster than Silicon Valley. 

Robots dance as children look on during an exhibition in an amusement park in Handan City of north China's Hebei Province, Aug. 18, 2017.[Photo: Xinhua]

Robots dance as children look on during an exhibition in an amusement park in Handan City of north China's Hebei Province, Aug. 18, 2017.[Photo: Xinhua]

While Western tech unicorns like Uber struggle with local competition, leadership and regulatory issues, Didi Chuxing Technology Co. recently raised $4 billion in fresh funding. 

If the Chinese consumer is increasingly the most important demographic in the world, this can easily be illustrated by Alibaba and JD.com combining for $44.5 Bn in Single’s day sales, while $25.5 came from Alibaba in a single day, on November 11th, 2017. 

If I am honest I can say the Western big 4 have reached near saturation point in their respective markets; that of Apple, Alphabet (Google), Apple and Amazon. With Samsung and Chinese smartphone makers out-competing Western firms in the global market, China appears destined to become the tech superpower of the next decades. 

While the market is very positive for Chinese Tech, even more impressive is the united collective will. President Xi Jinping outlined a plan for China to become an “innovation centre for AI” by 2030. The race to artificial intelligence is the new arms race, and with greater capital and the Chinese consumer, China is the early favorite among analysts and futurists. 

With key investments Tencent has grown an Apps and Entertainment business that is likely to break the one trillion dollar valuation mark by 2020. Xiaomi will have one of the biggest IPOs in recent memory in the next couple of years. Both of these events will elevate how the world sees Chinese tech firms. Alibaba working with the expansion of Starbucks in China, and Ford recruiting Alibaba to help break into China are signs of the times. 

In 2017 we saw Alibaba create a staffless cafe before Amazon’s AmazonGo stores even got out of beta. We saw Xiaomi rebound to once again become the darling of the ultra-competitive smartphone industry. Most importantly, we saw the scope of China’s ambition to win the race to AI and establish itself as a global leader. According to the US. Science board, China now accounts for 20% of all global R&D expenditure, rising rapidly as the US has declined sharply in recent years. 

As China begins to attract more top international talents, there’s evidence Chinese firms are not winning just in supply management, but also in go-to-market speed of global expansion. We witnessed this directly with how quickly both Mobile and Ofo scaled into cities and went global. Mobike is already in 180 cities, while Ofo has 180 as well. Their merger would put on full display the ubiquity of Chinese tech and their contribution to convenience for all global citizens. While the likes of Baidu may be behind Google’s Waymo self-driving unit, I believe Didi will surprise many people with its investment in AI for the next generation. While Uber has fallen from grace versus local upstart Lyft, Didi’s more cautious approach may be the long-term winner as it now begins to expand in places like Taiwan. 

Follow me as I cover Chinese tech firms and the latest news. In 2017 we saw ample proof of the Chinese rise as a Tech leader. While Western tech firms grapple to enter the lucrative Chinese market, I believe 2018 will give far more proof of the ascent of Chinese tech, as Silicon Valley’s progress slows. China won’t just outspend the world in artificial intelligence, it will raise the bar in green technology, electric vehicles, robotics, automation and retail innovation. And In 2018, we’ll also witness the unveiling of the “Netflix of China”.

(Michael Spencer is a Canadian social media strategist and an observer on technology.)

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