China the perfect home for startups
The firm is registering the patent for the technology in China and is speaking to different Chinese investors in the hope that they can invest more capital in the business, said its chief executive, Paul Sheedy.
“We will target our technology at Chinese local supermarkets, which are struggling to keep up with competition coming from Western supermarkets entering China, like Carrefour, Tesco, Marks & Spencer. This could be a real game changer for Chinese supermarket chains.”
The technology is much harder to market to Western supermarkets that are the incumbents in this market and are already used to the idea of paper vouchers.
“For years they have worked with external data analysis companies that have a vested interest in ensuring their positions are not challenged by companies like Reward Technology.”
Tesco has worked with the data analysis firm Dunnhumby for 20 years, and Sainsbury with Aimia for 12 years, so these large supermarkets are unlikely to change who they work with.
“Chinese supermarkets are more flexible in their choice of partners and are more adaptable to new technology,” Sheedy said.
The Chinese government, recognizing the benefit of helping Western startups set up operations in China, last year helped set up the International Universities Innovation Alliance, a non-profit organization in Beijing that helps international startups in China, and uses its overseas subsidiaries to help Chinese startups go global.
The alliance works with universities, think tanks and incubators to host competitions through which it identifies promising startups. The alliance’s London subsidiary, IUIA Ventures UK, was set up in October during a visit by President Xi Jinping to Britain. IUIA is setting up subsidiaries in the US and Singapore.
It is in partnership with between 70 and 80 universities globally, and its vision is to expand this network to 1,000 partner universities in the next three to five years, said its secretary general, Sun Wansong.
IUIA was founded with support from many Chinese government agencies, including China Investment and Promotion Agency of the Ministry of Commerce, the Torch High Technology Industry Development Center of the Ministry of Science and the Technology, and Foreign Expert Bureau.
It has also set up joint-venture companies with Chinese mainland companies to invest in promising projects. It has already invested in three companies, in the US, Hong Kong and Canada, all of which are startups intent on expanding into the mainland.
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