The world starts copying Chinese ideas

Jun 14, 2017, 08:50 am

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Source: Baidu

By AsiaToday reporter Jisu Kim

Chinese companies have had a reputation of being copycats of Western companies, but now they have grown into global market leaders.

Connie Chan, an executive of Anreessen Horowitz, Silicon Valley's well-known investment firm that has invested in Airbnb and Facebook, spoke about the reversed copycat phenomenon at the Wall Street Journal's D. Live Asia Conference held in Hong Kong on Friday. He said that in contrast to the past when Chinese companies imitated Western peers' products and brands, Western companies are now copying many Chinese business models.

For instance, Sillcon Valley's bike-sharing startup LimeBike, backed by Andreessen Horowitz, brought China's business model and applied it to American consumers. LimeBike's system that uses a smartphone app to unlock the bike parked in a public place without installing any bike stops is a business model that has been first introduced by China's Ofo and MoBike. "I love this reversal of what 'China copycat' can mean," Chan said. "It no longer just means a Chinese company copying the States, it can mean a U.S. company copying China."

In the past, Chinese companies were notorious for copying Western companies' products, brands, and business models that have already been proven in the market and launching them on the local market after making only slight changes. It has been so prevalent in China that the term "Shanzhai", which refers to the copying of these Chinese companies, was made. Western media pointed out that the Chinese government's preferential policies and regulations to restrict foreign companies' market access, the "Great Firewall", and the lack of intellectual property protection, gave Chinese companies an home advantage to create copies. Such protectionism in China has become the basis for the Chinese IT industry to form an unique innovation ecosystem.

Hong Kong's South China Morning Post reported that the reason for Chinese IT companies' success is that they adapted and evolved foreign business ideas for the mass market. These small innovations have come together to impact the lives of hundreds of millions.

For example, China's IT giant Tencent launched a messenger mobile app called WeChat in 2011. It was just a simple messenger in the early stages, however it created one-stop platform with hybrid features of Western business models such as WhatsApp, Facebook, Instagram, Skype, Uber, Tinder and others. At present, WeChat has 846 million monthly active users worldwide.

After the success of WeChat, Tencent began expanding its business models in social networking and mobile gaming. Today, Tencent is a leading player in mobile app monetization around the world. The recent developments of Facebook Messenger, WhatsApp and Kick Messenger have clearly shown a reference of WeChat's strategy and functionalities.

This is not all. In addition to Tencent, Chinese companies are leading the global market in many areas such as internet finance, social media, artificial intelligence, virtual reality, augmented reality and intelligent transport system.

"Like everybody wants to know what is happening in Silicon Valley, I think we should also be aware of innovations coming from China. You will begin to see a lot of Chinese innovations diffusing into the US," said Justin Kan, founder of Twitch.tv, a US-based video game broadcasting platform that has been acquired by Amazon. Uber's founder and CEO Travis Kalanick said, "In next five years, there will be more innovation, more invention, more entrepreneurship happening in Beijing than in Silicon Valley."

Last year, China's Baiu, Huawei, Tencent, Didi Chuxing and Alibaba were selected as the "50 Smartest Companies" by MIT's Technology Review, alongside Tesla, Nvidia, SpaceX, Facebook and others. Chinese drone makers such as DJI and Ehang are leading the unmanned aerial vehicle (UAV) market.

China is now on the verge of the reverse-shanzhai era. What's unique in China's business model is that it is affecting the markets of developed countries and the markets of developing countries at the same time. Tokopedia, Indonesia's largest e-commerce platform, calls itself the "Taobao (Alibaba's e-commerce site) of Indonesia". Tokopedia's co-founder William Tanuwijaya adopted Alibaba's business model after research and said, "I really like how visionary Jack Ma is."

India's No. 1 e-commerce company Snapdeal also calls itself the "Alibaba of India". Before launching Snapdeal, Kunal Bahl and Rohit Bansal visited China in 2011 and realized that the Indian market had more in common with the Chinese market thatn with the market in the US. They noticed that the unique issue of India's e-commerce that has millions of small brans and sellers can be solved by adapting Alibaba's platform.

Nigeria's e-commerce company Konga.com originally launched as a local Amazon in 2014. But only a few months later, it changed its strategy to become the "Alibaba of Africa." India's Vijay Shekar Sharma, a big fan of Alibaba founder Jack Ma, revealed that he wants his company Paytm to grow into the "Alipay of India".

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