US and China continue to dominate Hurun global unicorns 2021 – Rupert Hoogewerf

 

Rupert Hoogewerf

The US and China continue to lead the Hurun global unicorn list for 2021, says chief researcher of the report, Rupert Hoogewerf, although China is slightly behind the US, according to the Free Malaysia Today. “With its flagship TikTok closing in on 3 billion daily users, [ByteDance] has now grown to become a serious challenger to Facebook,” the report said.

The Free Malaysia Today:

China fell further behind the US in the number of startups valued at more than US$1 billion, according to a report published today by China-based researchers. However, the two countries continue to dominate the worldwide list of “unicorns”, as the highly valued unlisted companies are called.

The Global Unicorn Index 2021, compiled by Shanghai’s Hurun Research Institute, showed that Chinese unicorns accounted for 301, or 28%, of 1,058 unicorns worldwide, as of the end of November.

In all, 42 countries had at least one unicorn. Collectively, the companies were worth US$3.7 trillion.

Some 74 new Chinese unicorns were added to the list, compared with 254 in the US, which had 487, or 46%, of the global total. Despite the slower growth in China, the two countries together accounted for nearly three-quarters of the world’s unicorns.

India, which added 33 companies to the list, for a total of 54, ranked third.

“The US and China continue to dominate, with three-quarters of the world’s known unicorns, despite representing only a quarter of the world’s population,” said Rupert Hoogewerf, chairman and chief researcher for the report.

But Hoogewerf added: “The rest of the world is playing catch-up, growing their share of the world’s unicorns from 17% two years ago to 26% this year.”

ByteDance, the parent of video app developer TikTok and Chinese sister app Douyin, was the most valuable unicorn on the list, with its valuation surging to US$350 billion, up from US$270 billion at the end of March last year.

“With its flagship TikTok closing in on 3 billion daily users, [ByteDance] has now grown to become a serious challenger to Facebook,” the report said.

Valued at US$150 billion, online financial service provider Ant Group fell to second place after Chinese regulators blocked its listing last year and ordered a revamp of its payment and lending businesses. The moves were part of Beijing’s antimonopoly investigation into parent company Alibaba Group Holding…

Hurun called 2021 the most successful year for startups, backed by the presence of an entrepreneurship ecosystem comprising affluent business people, world-class universities and, more importantly, venture capitalists.

“The role of investors is evolving to mentorship and scale-up opportunities, rather than just providers of cash,” said Hoogewerf. “The world’s leading unicorn investors are building ecosystems with their portfolio, [which is] hugely attractive to the world’s fastest-growing startups.”

Sequoia led the ranks of US investors, which also included Tiger Fund, Accel and Goldman Sachs. All of these more than doubled their investments in the 2021 unicorn list compared with last year.

SoftBank of Japan, Tencent of China and Temasek Holdings of Singapore were among active Asian investors.

The unicorn list also saw 201 companies removed from the ranking: Of those, 137 went public, 25 were acquired and 39 saw their valuations fell below US$1 billion. Some of the biggest decliners in value included Katerra, a US construction company, and Ucar, a Chinese ride-sharing company.

“For every successful unicorn you see, there are thousands of failed companies, as well as a new generation of future unicorns coming through,” said Hoogewerf.

More at the Free Malaysia Today.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Bytedance will be larger than Facebook – Matthew Brennan

Matthew Brennan (right)

Internet watcher Matthew Brennan, author of Attention Factory: The Story of TikTok and China’s ByteDance dives into the background of Bytedance, the mother company of Tiktok, and explains why the Chinese company will outflank Facebook in the near future.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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How technology did not beat totalitarianism- Kaiser Kuo

Kaiser Kuo

China watcher Kaiser Kuo discusses Western narratives on China’s rise. Technology did not beat authoritarian regimes, he explains, just as other Western views on China were profoundly wrong. The Arab Spring uprising was the first sign technology did not bring repression down, but not the last one, he argues.

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Social media might be better off leaving Hong Kong - Shaun Rein

Shaun Rein`

TikTok has already decided to leave Hong Kong and other Western social media like Facebook and Google are trying to figure out what to do after China introduced its national security law to Hong Kong and they might have to cooperate with local police. Business analyst Shaun Rein suggests they would better off leaving Hong Kong altogether, in the South China Morning Post.

The South China Morning Post:

New implementation regulations for the law unveiled on Monday say it applies “whether or not the identification record or decryption key” central to a particular national security case is located in Hong Kong.

Shaun Rein, managing director of China Market Research Group, said that given how politicised Hong Kong had become, Facebook risked being criticised at home if it did not publicly say it would resist police requests.

“I think a lot of companies like Facebook have a decision to make. Is it better to upset the Hong Kong police and the government, or is it better to upset their home market in the US? So maybe it is better for them to leave Hong Kong completely,” he said.

Rein said there was a “real risk” that the legal representatives of these companies could go to jail or be fined if they did not follow the law, leaving tech giants stuck in a “very difficult and dangerous situation”

More in the South China Morning Post.

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Travel industry: in need of a post-corona rethink - William Bao Bean

William Bao Bean

Many industries have to rethink the way their business and business models are organized when they resume action as the coronavirus crisis subsides. The travel industry is one of them, says Shanghai-based VC-veteran William Bao Bean, at WebInTravel. "Travel needed to solve a very big problem – high customer acquisition costs – and he said it needed a new model in which everyone wins, and not like now “where everyone loses but the platform”.

WebInTravel:

William Bao Bean, partner, General Partner, SOSV Capital said travel needed to solve a very big problem – high customer acquisition costs – and he said it needed a new model in which everyone wins, and not like now “where everyone loses but the platform”... 

Bao Bean spoke of one of his investments, Travelflan, a new superapp-like model which worked on revenue share to offer distribution reach to travel suppliers to sell services. “It doesn’t make money on advertising, it works on revenue share. We have industry players who are under such pressure from Google, Facebook, Taobao, all the big giants that they are willing to trust each other and work together.” 

Their secret sauce is zero customer acquisition cost, he said. “We should take advantage of this difficult time and come around a trust-based model, stay profitable and serve customers.”

More in WebInTravel.

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Trump's immigration ban will hurt US tech companies most - Shaun Rein

Shaun Rein

The plan to ban immigration by US President Donald Trump will be mostly hurt US tech companies who cannot recruit talents anymore, says business analyst Shaun Rein to the BBC. "Now, with the immigration ban, more top Chinese, Indian and other foreign talents will seek jobs in tech hubs globally like Shenzhen, Seoul, and Bangalore rather than Silicon Valley," Shaun Rein adds.

The BBC:

According to Pew Research Center, almost half of immigrants live in just three states - New York, Texas and California, home of Silicon Valley, where tech giants such as Google, Facebook and Cisco are based. 

"Trump's immigration ban will hurt US tech companies' ability to recruit the talent necessary to remain competitive and focus on innovation," said Shaun Rein, managing director of the China Market Research Group. 

"Instead of staying in America and building America's tech prowess, top talent will return to their home countries and build the next round of innovation powerhouses." US companies are battling it out with Chinese internet giants such as Alibaba and ByteDance in the field of innovation. 

"Now, with the immigration ban, more top Chinese, Indian and other foreign talent will seek jobs in tech hubs globally like Shenzhen, Seoul and Bangalore rather than Silicon Valley. They will push invention and innovation in software, hardware and in semi-conductors," Mr Rein added.

More on the BBC.

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How the short video undermines the WeChat power base - Arnold Ma

Add caption

TikTok and Douyin, both owned by Bytedance, are two short-video successes, undermining the supremacy of WeChat, explains marketing guru Arnold Ma and CEO of London-based agency Qumin at the China Film Insider. Just like Facebook, WeChat is losing traction among the youngsters, he says.

The China Film Insider:

Arnold Ma: If your target is Chinese Gen Z and millennials, you need to move on to a different platform than WeChat. Only 15 percent of Chinese teens post on WeChat moments, and the reason for this is that, just as Facebook has gained mass adaptation and become the biggest social media platform on the internet in the West, WeChat is now the single biggest social media platform in China. When that happens, when a platform moves from niche to mainstream, they will lose what made them special for the early adopters — in this case youth. So they’re going to try something else, and that something is short-form video. Chinese people spend 600 million hours per day watching short videos. It’s probably one of the fastest growing formats on the planet. 

We think Douyin is here to stay, and it’s growing at a ridiculous rate. And now is the time for brands to take advantage of it. Imagine if a brand built a WeChat presence six years ago or a Facebook presence 13 years ago — today the brand would have the most powerful channel for its marketing. This only happens a certain amount of times in our lifetimes, maybe once every five or six years, where there’s a completely different new social media platform that gains massive traction. 

CBI: There’s so much talk about TikTok in the U.S. now, and there’s a sense that Douyin is just the same thing with a different name. Is that a misconception? 

Ma: The two are actually very different platforms, even though they’re owned by the same company.  They have different content, different functions, and different user behavior. Douyin has many more advantages for brands, whereas TikTok is still a very young platform. Douyin has a fairly affluent demographic, and they’re generally very globally aware and sophisticated consumers. 

The first main difference is the content, which on TikTok is very silly, fun video, for now. Our prediction is that TikTok content will move in a direction similar to Douyin. The content on Douyin is very grown up. Whether it’s about entertainment, education or lifestyle, it’s always more mature — less silly and more useful. It makes sense because short video is such a rich format, but it’s only in the last few years that technology, specifically 4G and 5G, has made it accessible enough to reach critical mass on demand.

More at the China Film Insider.

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How Twitter, Facebook removed China's fake accounts - Victor Shih

Victor Shih

In a remarkable move Twitter and Facebook removed this week China-based accounts spreading fake news on Hong Kong. Political analyst Victor Shih looks in Politico at the effect of this new policy against Russian-style fake news.

Politico:

The accounts suspended by Twitter and Facebook on Monday were not linked to China’s state-run media organisations. 

Rather they were part of a network of fake accounts whose described tactics appear akin to the Russian misinformation campaigns coordinated to sway American public opinion in the lead-up the 2016 U.S. election. 

“China is copying Russia and has set up a large number of accounts on Facebook and Twitter to pump out anti-protester propaganda filled with factually untrue statements and pictures. [Such accounts are] an attempt to polarise opinion, which Twitter and Facebook have publicly stated they don’t want to do, so they are acting on their new policies,” said Victor Shih, a professor at the University of California, San Diego’s School of Global Policy and Strategy. 

He noted that the platforms had tightened regulations following “blowback” after the 2016 poll. 

“They increased the level and awareness and [changed] the algorithm that they are using to catch manufactured campaigns for a political end, especially a violent political end,” Shih added. 

Facebook on Monday removed seven pages, three groups and five accounts involved in “coordinated inauthentic behaviour as part of a small network that originated in China and focused on Hong Kong”.

More at Politico. Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Facebook Groups go private, copying WeChat - Ben Cavender

Ben Cavender

Facebook is struggling to remain relevant for its users and has a good look at China's WeChat where group interactions are more private than the chaotic mess Facebook offers. But business analyst Ben Cavender wonders if the Chinese approach works at Facebook, he tells the South China Morning Post.

The South China Morning Post:

“Facebook has struggled to find ways for its users to feel that they have valuable ways to share and engage in interesting discussions with relevant groups of people versus the wider platform in recent years,” said Ben Cavender, a Shanghai-based analyst at China Market Research Group.

“They've seen just how popular WeChat has become as a platform for sharing within smaller, more private groups and realised that this is something that might work similarly well for them ... the challenge though is that in more mature markets like the US, consumer trust in the platform is very low.”

WeChat, developed by Tencent Holdings and with over a billion users, is heavily centred around the basic functions of messaging and social media. Moments, its social media space that Messenger’s new ‘close friends circle’ resembles, is open only to WeChat friends.

Compared to Facebook’s efforts to help users discover new groups by recommendation, WeChat employs a more hands-off process. Users can only join groups by invitation of an existing member, but the group can boost its visibility by sharing a QR code that works as a link to the group.

More at the South China Morning Post.

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How Facebook is copying WeChat - Ashley Dudarenok

Ashley Dudarenok

Facebook's CEO Mark Zuckerberg has implicitly admitted he wants to learn from China's WeChat. Marketing expert Ashley Dudarenok sees here a pivotal moment where a leading US platform starts to learn and copy from China's success story, she explains in the South China Morning Post.

Ashley Dudarenok:

There are key moments when an invention or product revolutionises society: the telephone; the automobile; television; the aeroplane; personal computers; smartphones.

Now, it’s the digital ecosystem. Facebook is one such ecosystem – a platform with multiple functions that people return to use again and again. For some, it functions as a mini-internet, to such a degree that they don’t realise that Facebook operates through the internet. People can send private messages to friends, post photos that anyone who has a Facebook account can see, find out about local events, promote their business and more without leaving the site.

Facebook also has live streaming, Facebook Watch for TV series and Facebook Marketplace for buying and selling. It owns WhatsApp and Instagram, so those are also part of its ecosystem, and it has emulated popular functions from Snapchat and others.

Facebook is the dominant digital ecosystem in the West. WeChat is the dominant digital ecosystem in China.

From 2013 onwards, China’s digital universe ramped up.

Mobile payments boomed and start-ups sprang up bringing convenient e-commerce, mobile payment systems that worked just as swiftly online and off, and on-demand services available with the click of a few buttons. Linking it all together was the super app WeChat, with its estimated 1 billion-plus active accounts.

Called Weixin in China, it dominates the country’s social media. Its interface is in Chinese and it can only be downloaded from within the country with a China-based phone number. It has far more functions and abilities than the international version. It can be used to shop, request a taxi, order food, buy air tickets, check in for your flight, book a medical appointment, pay utility bills and even file an application for a divorce in some cities. No one ever needs to leave the app.

When one looks at statements that Zuckerberg has made and the initiatives the company has championed, it seems that one goal he’s had for Facebook is for it to be a smaller, more manageable version of the internet that people don’t leave … just like WeChat is now in China.

In some ways, Facebook has succeeded. However, there’s been pushback over the years, especially against its Free Basics initiative, which offered free internet access in developing countries but only to a few sites, Facebook being one of them.

Within China, WeChat has been able to achieve this not by restricting access (with the

exception of competitors such as Alibaba and sites already blocked by the Chinese government) but by creating more pathways. It hasn’t created a smaller internet, but a more connected one, available in one place, centred on personal needs and daily use... 

For many years, globalisation has meant the global adoption of Western ways. Now it’s obvious that China is taking a leading role and repositioning itself on the world stage. According to a McKinsey report, a large part of China’s outbound investment focuses on manufacturing, AI and the internet of things. In the past decade, China’s internet giants have built their own AI labs and invested aggressively in AI companies around the world.

More in the South China Morning Post.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

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A day in the life of a WeChat user - Matthew Brennan

Matthew Brennan

WeChat is one of the largest social platforms in the world, and an example of what Facebook CEO Mark Zuckerberg wants to do with his platform. WeChat expert Matthew Brennan is one of three avid WeChat users explaining to the Jing Daily what WeChat means for his daily life, including their mini-programs.

Jing Daily:

Matthew: WeChat is primarily a communication tool for me. Some days, I’ll communicate with anywhere between 10 to 100 people in a single day. It’s also time-consuming to manage a 440-person WeChat group... 

I also use mini-programs on a daily basis — at least once a day. The most popular ones are Meituan Dianping (food delivery) and Luckin Coffee. I also use one for requesting and sending invoices... 

If I am offline and am going to a convenience store or a market to buy some clothes [I’ll use it]. I use it to pay for pretty much any daily purchases you can think of. I rarely use Alipay. I opt for other types of payments only when paying a large sum, like my daughter’s kindergarten tuition. If you speak with people in Shanghai, they use a lot of Alipay. It’s popular in first-tier cities and among young people. WeChat is definitely more universal and lets older generations to purchase offline. Shenzhen and Guangzhou are much more skewed to WeChat because that’s where the company is based... 

WeChat official accounts are an important part of the content ecosystem. On average, I will read at least two articles about tech on WeChat a day. I access them from in the subscription account folder, through content shared in Moments, and from “Top Stories”(看一看). I also run my own official accounts and update them about once a month... 

Commenting from a business strategy perspective: three contenders to WeChat were recently released on the same day including Duoshan from Bytedance, which has gained a lot of media attention. The most popular quote online from a social media user was this: “I had a good time chatting on three products, but we still want to keep in touch, so we added each other on WeChat.” I think it nicely sums up the situation regarding any alternative communication platform that would like to rival WeChat.

More in the Jing Daily.

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How Tencent became a winner with WeChat - Matthew Brennan

Matthew Brennan

China's internet giant Tencent has become a winner, first by copying US competitors, but now it has become their inspirator, says Tencent-watcher Matthew Brennan to Leadersleague. “WeChat does not monetize data, but it is a growth lever for other businesses in the Tencent group. It’s a bit like iOS or Android in that regard,” says Brennan.

Leadersleague:

Tencent does not sell access to user-data to third parties, such as advertisers. The data of the Chinese app is to all intents and purposes the handsets of the users. “It would have been possible to compare We Chat to Facebook, Baidu to Google or Alibaba to Amazon ten years ago, but that’s no longer possible today,” insists Matthew Brennan a consultant specializing in Chinese IT... 

The most widely used of WeChat’s secondary functions is WeChat Pay. Until recently, Chinese people’s attachment to paying with hard cash was the norm. Nowadays, e-commerce represents 14% of all retail sales, against 8% in France. With WeChat Pay, you can use your phone to settle a bar tab or pay an electricity bill. Even the famous hongbao red envelopes Chinese use to exchange monetary gifts are being replaced by the application. During the 2017 Chinese New Year period, 14 billion transactions were carried out using the app. “Tencent has taken advantage of the lack of a developed baking sector in China, where the use of credit cards is not commonplace,” adds Brennan. By cannibalizing all the different services available on smartphones, WeChat has become a killer app, which the competition find impossible to match. 

Tencent is the big winner from the success of WeChat. Not only does the company take a percentage of every transaction made using the app, but it has developed its own content for the platform. “WeChat does not monetize data, but it is a growth lever for other businesses in the Tencent group. It’s a bit like iOS or Android in that regard,” stresses Brennan. Via WeChat Tencent can commercialize other businesses, such as Tencent Video or Tencent Music. In total the average mobile phone user spends 55% of their time on a Tencent service. The case of streaming services is particularly instructive. Thanks to WeChat, Tencent has managed to increase the subscriber base of its VOD platform Tencent Video, seizing a quarter of the Chinese market. The company claims to have more subscribers than Netflix even. 

Between 2016 and 2017, Tencent made 318 investments in startups and diversified number of sectors it is involved in in order to propose more services on WeChat. Tencent has invested in Karius, a platform specializing in the diagnosis of infectious diseases, and branched out into the connected agriculture sector.

More in Leadersleague.

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WeChat starts to tell stories, at last - Matthew Brennan

Matthew Brennan

China's most popular short-messages platform WeChat has at last included Snapchat/Instagram style stories. Long overdue, says Tencent and WeChat specialist Matthew Brennan at his website. He tells how it works, and why - if very late - this is a smart move.

Matthew Brennan:

WeChat is coming pretty late to the stories game. For much of 2017-18, we’ve seen them totally focused on building up the mini-programs platform, which might explain some of the lateness. Also worth noting that adding stories into the complex WeChat experience in a meaningful and impactful way without disruption of the existing ecosystem balance is tricky and not without risk. 

But the real reason why we haven’t seen WeChat embrace moments to date is likely to be founder Alan Zhang’s insistence on positioning WeChat as a tool for productively and efficiency rather than one that tries to keep users coming back to waste time. 

Yet it’s likely that the pressure from Tencent head office to leverage WeChat to fight against Bytedance and their flagship short video platform Douyin (TikTok) is proving too much. With WeChat 7.0 we’ve finally seen WeChat make an indirect but bold move into short video. 

Overall I’m pretty positive on how they’ve adapted the stories format to WeChat with this new update. I expect this feature to have a significant impact on WeChat usage habits, increasing stickiness and time spent in the app and negatively impacting consumption of other forms of short video in the China market. There will probably be some degree of cannibalization to traffic on the moments newsfeed also. 

Stories have proven to be an immersive and engaging format across many different apps. The ephemeral nature of the format (24 hrs and they disappear) naturally drives users to return. The original innovation came from SnapChat who Tencent previously looked at acquiring and now own 17% of parent company Snap. 

The most important entry point for traffic into this new feature might be groups and 1on1 conversations, not the newsfeed (Interestingly Facebook also introduced stories into Facebook groups this month). Messaging is traditionally an inhospitable environment for monetization. From a platform owner’s perspective, it’s not simple to monetize chat conversations, you can’t put adverts in there without seriously disrupting the user experience. 

Tencent have done well with cracking this tough nut, firstly using lucky money in chat conversations as a way to kick-start WeChat Pay and secondly with sharing of mini-programs in groups as a way to foster e-commerce (e.g. Pinduoduo). Stories could be a third way to leverage the huge traffic of chat conversations as they can be monetized with ads and full-screen auto-play video ads at that; no wonder Facebook is trying to stuff stories everywhere they can. 

Tencent is conservative with ad inventory, so I expect it will be quite some time before we see ads in WeChat Stories (if ever), but certainly the potential is there for them to turn on the taps if need be. In the short to mid-term, the primary benefit will be increased stickiness and engagement mostly at the expense of competitors. 

Tencent must know that chat conversations are the real key to both WeChat traffic and monetization. They might be reluctant to place more pressure on the newsfeed where traffic has been falling or official accounts that have also seen declines in page views. Chat conversations have incredibly high value to users and unlike in newsfeeds, Tencent’s position is highly resilient to competition.

More at the ChinaChannel.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Local messaging apps beat international competition - Matthew Brennan

Matthew Brennan

In China, Tencent's WeChat became the leading messaging app, but  - unlike many think in the West - it is not government censorship that kept international competition at bay, says WeChat expert Matthew Brennan in The National. Also in other countries, local messaging app prove to be stronger.

The National:

In its native China, Tencent is a household name responsible for an app that has become a part of daily life – it’s called WeChat (“Weixin” in Mandarin). 

“It’s the universal connector in China,” says Matthew Brennan, who is writing a book on the history of WeChat, and regularly gives presentations about the app. “It’s the pipework for information. Everyone uses it, and people open WeChat around 40 to 50 times a day.” WeChat has more than a billion users and has features such as messaging, video conferencing, a social news feed, e-commerce, payment functions, smart city apps and transport booking, and much more. 

Mr Brennan believes it’s a common misconception – reported recently in the likes of The Guardian newspaper in the UK for example – that WeChat came to dominate in China because of state censorship of Western social media like Facebook and Instagram. 

“If you look at Line in Japan, or Kakao in South Korea, or Zalo in Vietnam, it’s been strong local competitors in Asia that have won,” Mr Brennan says, referencing the dominant messaging apps used in different Asian countries. 

“It’s winner takes all, and WeChat won [in China],” he says. 

Tencent is the world’s fifth-largest tech company by market capitalisation, overtaking Facebook this year and sitting behind only Apple, Alphabet, Microsoft and Amazon. It has flourished, mostly domestically, through the likes of WeChat, its app store and content provision with Tencent Video and Music, but in another important domain it has become a powerful player on a global scale.

More in the National.

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How startups can avoid Facebook and Google - William Bao Bean

William Bao Bean

Startups are mostly at the mercy of quasi-monopolies like Facebook, Google, Tencent or Alibaba. William Bao Bean, managing director of Shanghai-based SOSV tells in this elevator talk how his no.1 accelerator helps them to avoid spending money on those giants to get access to an audience, creating a win-win situation.

William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Can Facebook overtake WeChat? - Matthew Brennan

Tencent's WeChat has been a winner in China in terms of users but might even beat its Western competitors in terms of functionality, writes WeChat analyst Matthew Brennan at the China Channel. The bigger question is will the tech giants outside China ever be able to catch up?

Matthew Brennan:

Chinese users spend approximately one-third of all their time on mobile in WeChat. That presented a huge opportunity to build extra features and functionality on top of the basic messaging experience. And it was many of these features that hit the China market at exactly the right time, met the needs of local users perfectly, and helped propel WeChat to becoming the juggernaut that it is today. 

Classic examples include Shake-shake, Friends Nearby, Walkie-Talkie, QR Codes, Official Accounts, Mini-Programs, and of course WeChat Pay. 

It’s no coincidence that Tencent was the company to grasp this best, given their previous experience with flagship desktop messaging product QQ. Tencent CXO David Wallerstein had this to say: “When it came time to building value-added services around WeChat, it just came to us very naturally because we had just learned so much over a decade, probably like 12 years of learning by the time we got to WeChat… we also started thinking more about the economy, more about financial services, more about e-commerce, about how do you really transform a business or a hospital or a government using WeChat and I think we had so much experience with platform services and tying services together in a seamless way that when it came time to WeChat, it was like okay, good fresh platform, let’s get everything right this time.” 

The growth rate of new active WeChat users has been steadily declining for many quarters and many — myself included — believe it has pretty much reached a ceiling. The future and focus of WeChat will not be about gaining more new users, it will be about embracing it’s stated vision to “Connect people to people, people to services, people to businesses, and people to objects.” 

The digitalization of daily life continues at rapid pace in China through trends such as mobile payments, online-to-offline services, the sharing economy, smart retail and digital ID cards. WeChat acting as China’s great universal connector is at the very center of all of this and showing little sign of relinquishing its place at the forefront of Chinese innovation. The bigger question is will the tech giants outside China ever be able to catch up?

More at the China Channel.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts at innovation at the China Speakers Bureau? Do check out this list.

Why AI works better on WeChat than on Facebook - William Bao Bean

William Bao Bean

Chinese companies are making great strides in using machine learning or AI. One of the reasons is that  China's WeChat is better fit than Facebook to integrate this disruptive tool, says William Bao Bean, director or the  Chinaccelerator to eMarketer about influencer marketing in China.

EMarketer:

Bean: One of our companies, OCheng, is applying AI to WeChat commerce. WeChat service accounts are allowed to send a message to their followers once a week. OCheng can take customer relationship management data, look at the content people are engaging with, their purchase history, etc., and use machine learning to personalize these weekly messages. Instead of sending one message to a million people, you can send a million messages that are unique to each user every week. 

eMarketer: Is this process entirely automated? 

Bean: The content has to be written around the products the marketer is pushing that week. But the way the messages are written and the offers that are being shown to each person are personalized through automation. And when users write back, an AI-assisted chatbot can answer their questions. You not only have personalized content going to each user, but you can also have one-on-one conversations with WeChat users without a human, or you can have a chatbot and human working together. 

eMarketer: What types of brands are working with the tech? 

Bean: The Richemont Group, Dunhill, Macallan and Sephora are some of the brands that are leveraging this type of technology to drive higher sales. It’s not some pie-in-the-sky platform for them—it’s about dollars and cents, and there’s real ROI [return on investment]. 

eMarketer: Is it easier to achieve this on WeChat than Facebook? 

Bean: You can do a lot more within WeChat because it’s a more open platform than Facebook. A lot of the techniques you use on WeChat you can also use on Facebook. Facebook should start catching up, but the difference is how the two platforms make money. WeChat makes money on transactions, whereas Facebook makes money on ads. Facebook wants to capture ad revenues, whereas [WeChat parent company] Tencent wants to capture the commerce aspect. Marketing is important, but the opportunity to capture a percentage of the transaction as opposed to a percentage of the marketing budget is a bigger opportunity over time. 

eMarketer: In what other areas is machine learning being deployed to improve marketing outcomes? 

Bean: Influencer marketing is big in China. Influencer platform Robin8 uses machine learning and natural language processing to analyze the content that key opinion leaders [KOLs] push out, and then analyze the impact—who’s engaging with that content. Robin8 can do end-to-end attribution from KOLs all the way through to purchases on WeChat. This gives marketers an idea of what kind of content from which KOL works with different types of users, and they can optimize their KOL buy.

More in eMarketer.

William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form. Are you looking for more experts on innovation at the China Speakers Bureau? Do check out this list.  

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Facebook needs China, but China does not need Facebook - Ben Cavender

Ben Cavender

Facebook's bumpy relationship with China got another hit as the companies lead manager, Wang-Li Moser, in charge of government relations, decided last week to return to the US for "personal reasons". Business analyst Ben Cavender explains why China does not really need Facebook, in the Wall Street Journal.

The Wall Street Journal:

Ms. Moser couldn't be reached for comment. Her exit was first reported by the New York Times. 

Analysts say the loss of Ms. Moser only adds to Facebook's challenges in re-entering China, where it has been blocked since 2009, reflecting the government's concern over the ability of large social networks to stir unrest. 

Even if it could regain entry -- and most analysts say that is unlikely -- Facebook also faces a challenge in taking on WeChat, the dominant social media app, run by Tencent Holdings Ltd. 

"Looking at the environment now, it will be very difficult for foreign firms in the social media space to make headway into China," said Ben Cavender, principal at China Market Research Group. "The government has firm censorship rules and they have strong local players -- there's no need for them to open the door so wide anymore."

More in the Wall Street Journal.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Internet giants crush the smaller ones - William Bao Bean

William Bao Bean

Who will survive in the travel industry: the global giants or the local ventures, was a question for William Bao Bean, managing director of the Shanghai-based Chinaccelerator, at the WIT 2017 Conference in Singapore. William, who guided hundreds of startups, believes the big internet firms will crush the small ones, writes WebinTravel.

WebinTravel:

One critical question on everyone’s mind was who would emerge victorious in the online travel market: Local or global players? 

Bean offered a slightly pessimistic view, remarking, “the big is getting bigger and the small are getting crushed,” and citing the example of how Facebook and Google currently control the majority of global advertising; or how payments and e-commerce are now owned or invested in by Tencent and Alibaba. 

He did also add that “travel is insulated,” but nevertheless, its turf will be harder to defend from global players over time. “If they don’t have a short, they’ll use money as a weapon and acquire” businesses that will let them get ahead... 

So, the big are getting bigger, but “they can be quite myopic”. It grants smaller companies and startups with a slim but existent window of opportunity to sneak ahead. But they must also be aware of common pitfalls, to avoid common mistakes that befall many entrepreneurs. 

Bean argued, “the dumbest thing entrepreneurs do” is trust their gut when trying to expand their brand globally from the get go. “You cannot go with your gut, because it will take you in the wrong direction.” 

Instead Bean recommended “focusing on data and trying things,” encouraging “companies to use data to back up their decisions.” He continued, “you will fail, but it will help you to fail faster” and recover sooner.

More in WebinTravel.

William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.  

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