- Brian Wong, Alibaba’s vice president of global initiatives, says Silicon Valley has two major misunderstandings about China’s tech market.
- Wong thinks Chinese companies are perceived as copycats when they have developed major innovations in mobile payments and building online ecosystems.
- Wong says that contrary to popular belief, Chinese companies don’t want to “take over” the competition but to integrate.
Over the past several decades, China’s technology industry has gained a reputation in Western media for being full of cheap copycat products.
In a recent interview with Business Insider, Brian Wong, vice president of global initiatives at the Chinese tech giant Alibaba, said that view was wildly outdated.
“It is very clear now that true innovation is emerging from these markets,” said Wong, who grew up in Palo Alto, California, and has worked at Alibaba for more than a decade.
“The capabilities, innovation, and creativity that is coming from China should be an inspiration to companies in the Valley about creating products that are relevant and applicable to emerging markets,” he said.
Wong pointed to innovations in e-commerce and mobile payments. For example, Alipay is used by more than half a billion people and controls nearly all of the $US16 trillion mobile-payments market in China. Many young Chinese people are already living a wallet-free and cashless lifestyle, using mobile payments for most transactions.
Perhaps most innovative has been China’s mass adoption of ecosystem-based technology platforms. In contrast to US tech companies designed to perform one function extremely well – like transport for Uber or social media for Facebook – China has leaned toward apps that fulfil a variety of functions.
Alibaba’s Taobao app began as an e-commerce platform but has expanded into travel booking, movie tickets, social networking, live-streaming, food delivery, and entertainment. Tencent’s WeChat began as a messaging app but can be used for payments, taxi booking, bike sharing, and other features. Meituan-Dianping, which began as a food delivery and restaurant platform, operates in much the same way.
The ecosystem model extends to China’s mobile-payments apps. Alipay’s data and services are deeply integrated into Taobao, while accounts are linked directly to a money market fund (the largest in the world is now at $US230 billion) and consumer and business loan products. All that data feeds into a credit-scoring business called Sesame Credit.
William Li, the founder of the electric-car startup Nio, told Business Insider recently: “With the development of the social-mobile internet, the brand in the future will not be defined by product or services – it should be defined by the user base.”
The second major misconception that Silicon Valley has about China, according to Wong, is that China and the Chinese tech market are a “threat instead of opportunity.” He said the threat narrative of China had been around for decades, dating back to the 1990s, when China’s economy was based primarily on low-cost exports.
But these days, the economy has moved to a consumer-driven economy, a shift pushed in large part by President Xi Jinping and the Communist Party, though some economic indicators suggest that not all is what it seems.
“That represents a massive opportunity for US companies to sell their products,” Wong said.
But Wong said that for those Americans wanting to seize the opportunity, it’s on them to take the time to learn more about China and Chinese culture – and “not in the standard ‘kung fu movie and takeout Chinese food’ way.”
Wong says Alibaba’s founder, Jack Ma, constantly reminds employees that China is built around three philosophies: Daoism, which teaches harmony; Buddhism, which teaches tolerance; and Confucianism, which teaches order.
If you can understand the principles behind those philosophies, Wong said, you’ll have a better grasp of why the Chinese tech market works the way it does.
“China is much more about integrating as opposed to taking over or competing in the traditional sense,” Wong said. “They want to create and integrate.”
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