China Daily Global Edition (USA)
WILD, WILD TECH
Innovation’s new frontier is in a surprising place
The widely held belief that Chinese technology companies lack innovation may no longer be true, says Brad Stone, a technology journalist in the United States.
“People in the West once thought Chinese technology companies were not doing anything particularly innovative,” he says. “I’ve been struck on this trip by how that is really not the case anymore.”
Stone recently met with Internet experts and students at Peking University to chat about the Chinese Internet industry and his experience writing the book The Everything Store: Jeff Bezos and the Age of
Amazon, about the Internet company’s founder.
Stone has written about technology for 15 years. He first worked for the former Newsweek magazine, and then The New York Times and is now a senior writer for Bloomberg Businessweek.
Stone says he visits China every couple of years to learn about the latest Internet trends. On his most recent trip, he researched the Xiaomi Group, a 4-year-old Chinese company that the US business magazine Fast Company recently ranked as No 3 in the top 50 most innovative companies in the world.
Xiaomi, which makes smartphones, has no physical retail outlets, but its online sales reached $10 billion over the past three years.
“Xiaomi to me is truly an innovative and unique Chinese Internet company,” Stone says. “It basically rethought all the ways that you might manufacture a phone and then market a phone. They don’t sell in stores and they don’t advertise on television. It is very representative of the Chinese technology industry.
“At one point, maybe it was derivative of what is happening in the West. In some ways, when you look at Alibaba and Tencent, they are leading the way. There are many Internet companies around the world that are watching China closely right now to see what is happening here and then bring it to the West.”
Stone says the career of Lei Jun, CEO and founder of Xiaomi, is a good illustration of how the Chinese Internet industry has evolved.
Lei started his career at the Chinese software company Kingsoft, which, Stone says, was not particularly innovative in the beginning. In some ways, it was simply following in Microsoft’s steps although the company went public many years later. He invested in the online bookseller Zhuoyue.com, which was not particularly innovative either and which Amazon later bought and turned into Amazon.cn.
But what is fascinating about Lei is how he resigned as CEO of the software company Kingsoft and kept trying to work out how to build a true Internet company, Stone says.
Stone says that Lei is similar to Bezos, who is analytical and strategic about the market and thinks about how he can improve it and how to be more innovative, coming up with small features that may make a difference.
Stone has been in China promoting his Bezos book, which won the Financial Times and Goldman Sachs Business Book of the Year Award last year and was published in Chinese in January.
The book looks at how Bezos built Amazon into an e-commerce empire over 20 years and how it changed people’s shopping and reading habits.
Stone says that when he was in Silicon Valley, many great books were written about Apple, Google and Facebook, but no one had written about Amazon.
“But in the US and Europe,
Xiaomi to me is truly an innovative and unique Chinese Internet company. It basically rethought all the ways that you might manufacture a phone and then market a phone.” BRAD STONE WRITER
Amazon was the first company on the Internet that you knew about. It changed the way people shopped, it changed the way we read and it has recently changed the way that companies operate.”
Amazon was founded in Seattle in 1995. It pioneered selling books online and has gone on to develop in many areas, selling millions of products.
Though Amazon is a big company with enormous sales, its rate of return is small, Stone says, and Bezos’ aim is not to make more money for shareholders, but to be very patient and ambitious about the market.
As more companies have gone into e-commerce, online shopping has been widely adopted. Bezos started to lead Amazon into new areas, such as building its own supply chain, investing in the electronic reader Kindle and cloud computing Amazon Web Server, Stone says.
Zhang Yazhe, partner of the seed fund ZhenFund, says many companies have learned from Amazon in many ways — for example, in improving shipping.
“I’ve been to many e-commerce warehouses, such as Jingdong and Dangdang. But when I visit Amazon warehouses I realize it is years ahead of Chinese companies.”
Mackenzie Bezos, wife of the CEO, has given Stone a one-star rating, the lowest, on Amazon. But Stone says he is quite proud of receiving that response.
“Amazon is a very controversial company, very polarizing. Customers love it; they can be very passionate about it. But you talk to anyone in book publishing in New York, or a small local bookseller who tries to serve the community, and they hate Amazon.”