Slowly but surely, China tech takes over
Second-biggest economy flexing muscle for years now
World’s second-largest economy has flexed its technology muscles in recent years, as evidenced by the number of its firms at the upper echelon of the field.
In relatively distant memory, Chinese technology companies weren’t really on the global map. Especially in consumer electronics, the de facto leaders were those from Japan and the United States, who took turns in launching products that very much appealed to consumers who were hungry and curious about the wave of innovation that was unfolding before their very eyes.
Even before the original iPhone changed the world in 2007, the US already boasted of companies that were at the forefront of innovation — Apple, Microsoft, IBM and Hewlett-Packard were leading the charge. And of course, the Land of the Rising Sun already had the likes of Sony, Panasonic, Fujitsu, Toshiba and Sharp, among many others. Canada’s BlackBerry was the choice for businesses once upon a time, and Europe had its very own king for a long period in Nokia.
In fact, companies from South Korea and Taiwan even beat China, so to speak, to the draw in rising to international prominence, with Samsung, LG and HTC among the two Asian nations’ most-recognisable giants.
Then, seemingly out of nowhere, China’s homegrown innovation masters took over, and they’re practically everywhere. And Beijing has made no secret of its desire to become a dominant, respected player in the tech world.
“China is in a stage of rapid digitisation — economically, socially and politically. Initiatives adopted by the state council underpin its ambitions to be an IT superpower,” Gartner analysts said in the introduction of a recent report. “Enterprise architecture and technology innovation leaders can leverage China’s innovation in business for competitive advantage.”
In the wild smartphone wars, studies from both Gartner and the International Data Corporation reveal the same thing: three of the top five brands are from China. Sure, Samsung and Apple continue to lead at the first and second spots, respectively, but the rise of brands from China couldn’t be ignored: Huawei, Xiaomi and Oppo occupy the next three ranks, respectively — and they’re steadily gaining traction. And don’t forget about Vivo, OnePlus and, of course, Lenovo.
And it isn’t limited to devices; from the Internet and ride-sharing to financials, China continues to make its mark in the innovation arena space. Recent research from Kleiner Perkins show that nine of the 20 biggest tech firms in the world are from China: Alibaba (sixth), Tencent (seventh), Ant Financial (ninth), Baidu (13th), Xiaomi (14th), Didi Chuxing (16th), JD.com (17th), Meituan-Dianping (19th) and Toutiao (20th). Some of them might not ring a bell, but the effect they have in the Chinese economy — and its international standing — is huge.
Two-way street
China has a population of, according to Worldometers and based on United Nations figures, about 1.42 billion as at Thursday — that’s approximately 18.54 per cent of the global figure. And when there’s plenty of resources, putting it into good use will certainly yield beneficial results.
In the case of China, it works two ways. The large population is a dream scenario for brands who want to sell a lot. The Chinese market is diverse, in the sense that there is a good mix of spenders from both the affluent sector and that below it.
Meaning, any type of device can appeal to the market and can be a good sell. Keith Weed, chief marketing and communications officer at Unilever, in an article as part of the World Economic Forum Annual Meeting, put it very aptly.
“While technology is causing huge shifts in consumer behaviour all over the globe, nowhere is this brought into sharper perspective than in the colossus of a market that is China,” he says.
“China has become a world leader in marketing to a digital world with its e-commerce sector now worth $600 billion, representing around 14 per cent of its total retail and food services. The penetration of Internet-enabled mobile devices in the country is at 95 per cent and mobiles command a two-thirds share of digital time... China is truly a market centralised around the smartphone and e-commerce, and it’s moving at light speed.”
On the other hand, China’s population also enables it to offer a workforce that would be affordable to foreign firms; it’s no secret that several technology giants have production facilities in the country.
Again, it works both ways: workers get paid, and companies outside don’t have to worry about otherwise expensive production costs — which, in turn, means higher profits.
“‘Made in China’ is the backbone of retail trade in the US, which indelibly sustains household consumption in virtually all major commodity categories from clothing, footwear, hardware, electronics, toys, jewellery, household fixtures, food, TV sets, mobile phones, etc,” Prof Michel Chossudovsky writes in Global Research, the Centre for Research on Globalization.
“Importing from China is a lucrative multi-trillion-dollar operation. It is the source of tremendous profit and wealth in the US, because consumer commodities imported from China’s low wage economy are often sold at the retail level more than 10 times their factory price.”