How China is conquering the world’s market
When Steven Spielberg, one of the most popular, high-profile directors met Jack Ma, China’s second wealthiest man and a successful co-founder of Alibaba in October 2016, it became clear to many that an important deal was in play. The reason for the Beijing meeting was a future partnership between Spielberg’s Amblin Entertainment production company and the e-commerce giant. Namely, the production company earned a financial backing from the Chinese giant, together with its marketing savvy and distribution power. The objective of the partnership is the creation of a global blockbuster.
Partnerships of this kind origin from a few year ago. It is wellknown that Ma is a huge fan of The Godfather and as a movie lover he has been involved in similar deals. For instance, he supported a film fund that helped promote and bankroll Star Trek Beyond as well as Mission Impossible — Rough Nation, with a total investment of $1.5 billion. That was Ma’s first direct involvement in Hollywood. At the Beijing announcement of the deal, the director stated that the agreement will enable them to “bring more China to America, and bring more America to China.” However, this deal is more than a “cultural bridge” as it is a signal of China’s growing influence on the movie industry. China’s influence is not present only in the film industry but also in other innovative and profitable US businesses, all the way from mobile software and different devices to the entertainment industry. With China’s involvement, the US market has become one of the most dynamic in the world, with an immense source of capital and creative power covering the most important projects.
Aside from Alibaba, there are many other Chinese tech companies that enter the market with ambitious plans. Their background is nothing less than impressive. It is expected for the Chinese box office, this year, to outshine the US’s. There is also the possibility of the same scenario to happen also in the field of Chinese venture-backed investments, as they approached $50 billion last year. That’s an increase of 943 per cent since 2013.
China often tops the US market in sales of mobile devices, online retail, gaming, renewable energy investments, digital payments and more. A significant advantage for the Chinese market are its consumers — more than a half of its 1.37 billion citizens are active online, which makes almost 90 per cent of them using online services through their mobile devices. This has brought China an explosion of tech giants and innovation, helping Beijing and Shenzhen compete for the throne in the rival global market.
As the evolution of the Chinese market progressed, there is a visible difference in quality in the products and services its companies offer. The market matured to the point of sophistication while meeting the unique demands of the population. Transist Impact Labs CEO, Calvin Chin said that in the process of meeting the high criteria of China’s population “you ended up with this different evolution from the rest of the world, a continental Internet is broken off from the Pangaea, which led to different interfaces, different market dynamics.”
Great examples of China’s power in the world of technology are WeChat — owned by Tencent — and Alipay. The first was launched six years ago and within a twoyear period gained over 200 million users. In 2015, after an intense battle of innovations, China’s mobile surpassed US’s, reaching up to $235 billion with WeChat and Alipay. Today, hundreds of millions of Chinese consumers rely and depend on these innovative apps that combine multiple services in one place.
The competition continues, as many American giants are on a mission to re-create the same experience on a single platform. For instance, Facebook started experimenting with installing WeChat inspired business features into their Messenger. On the other hand, Tencent is again one step ahead with their new Mini Program — a platform where users can build versions of their applications inside Tencent’s WeChat. About these apps, Albert Liu, Executive Vice President of corporate development at Verifone said, “The advantage of super lifestyle apps like Alipay or WeChat is they’ve connected incrementally more data than an app that’s just focused on a single area: Alipay knows where you’ve travelled, what movies you saw, what restaurants you ate at.”
“There is no comparison with anything in the US Maybe Facebook eventually gets there — maybe,” he added. The Chinese market of technology is moving fast mainly because of the irreplaceable resource investment, productivity, and innovation demand that’s present like nowhere else. Nonetheless, for Chinese investors, last year was time to pursue strategic deal-making in the entertainment industry. The real estate magnate Dalian Wanda and Tencent have joined Alibaba in the trend of investing billions of dollars in grandiose, tech-advanced movie projects that will not only bring capital but will also appeal to the audience around the world.