Chinese Tech Companies Alibaba, Xiaomi and Tencent Best American Counterparts In New MIT Report

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Chinese Tech Companies Alibaba, Xiaomi and Tencent Best American Counterparts In New MIT Report
By Michelle FlorCruz @mflorcruz m.florcruz@ibtimes.com on June 25 2015 1:18 PM EDT

China’s biggest tech companies have made a splash in international markets in recent years. Now, according to the Massachusetts Institue of Technology, a number of China’s homegrown innovators have now bested several of their Western counterparts to become some of the smartest companies in 2015.

In MIT’s Technology Review’s “Business Issue,” Chinese tech powerhouses Xiaomi, Alibaba and Tencent not only outdid their Western competition but also cracked the top 10 in the publication's “50 Smartest Companies of 2015” list. Placing at No. 2, Xiaomi began as a smartphone vendor but has since grown its business to surpass its reputation as a cut-rate version of Apple (which also made the list at No. 16). Xiaomi has taken growth seriously and branched out of just smartphones and into software, Internet TV and international markets.

Alibaba, the brainchild of eccentric teacher-turned-CEO Jack Ma, was on the forefront of China’s move to e-commerce and digitization of consumerism. Alibaba is often compared with Jeff Bezos’ Amazon and dubbed China’s Amazon. However, Alibaba’s recent growth makes a case for changing Amazon's description to America’s Alibaba. Alibaba has earned its reputation as the world’s largest online retailer and has rolled out its own payment and banking service, called Alipay. Alibaba rode the hype surrounding its company into its IPO, which raised a record-setting $25 billion.

Tencent came in at No. 7, after becoming the parent company to China’s most-used Internet service portal. The Shenzhen-based company outranks other international social media companies like Facebook, Snapchat and Japanese messaging app Line, which ranked No. 29, No. 47 and No. 37, respectively. Tencent has amassed more than 549 million active monthly users on its messaging services WeChat and Weixin, which still threatens the status of popular Chinese-owned Weibo microblogging service.

The rankings come after former Silicon Valley figure and 2016 presidential candidate Carly Fiorina criticized the Chinese for not being imaginative or entrepreneurial. “[Chinese people] are not terribly imaginative. They’re not entrepreneurial, they don’t innovate, that is why they are stealing our intellectual property,” Fiorina said last month, speaking to Iowa political blog Caffeinated Thoughts. “I’ve been doing business with the Chinese for decades, and I will tell you that, yeah, the Chinese can take a test, but what they can’t do is innovate.”

The comments, which were met with some backlash, also had some support among some Chinese. However, as China continues to shift away from a manufacturing economy, its citizens are increasingly proving themselves to be entrepreneurs and innovators.

Chinese Tech Companies Alibaba, Xiaomi and Tencent Best American Counterparts In New MIT Report

 

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The internet of everything – Tencent’s SY Lau on the trends driving the future of China’s media


SY Lau, who is awarded the Cannes Lions gong for Media Person of the Year, speaks to John Reynolds about helping to build Tencent and its media unit Tencent Online Media Group into the largest integrated internet service company and a leading media service provider in Asia, and what trends will drive the future of media.

Tencent's SY Lau

He’s on first name terms with Mark Zuckerberg and Eric Schmidt, is comfortable around geeks writing code, and is one of the masterminds behind a Chinese tech company that rivals any of the big Silicon Valley giants.

Awarding SY Lau, senior executive vice president of Tencent and president of its Online Media Group (OMG), the Cannes Lions gong for Media Person of the Year, festival chairman Terry Savage said Lau’s involvement in building Tencent into the largest integrated internet service company in Asia “is no mean feat”.

Tencent is a colossus, boasting a market capitalisation of £130bn, making it more valuable than Amazon. Its WeChat messaging service, with more than 500 million global users, has become a global phenomenon.

OMG, under the leadership of Lau, operates all of Tencent’s online media services platforms including video-streaming service Tencent Video, internet access and portal Tencent News QQ.com, micro-blogging platform Tencent Microblog, and other related services.

“In the past decade, we have transformed OMG from a provider of a single internet portal service into the respected source of China’s largest integrated media service matrix,” Lau tells The Drum. He points out that the award “highlights the rise of China as a global force for online innovation, creativity and for provision of the highest quality content”.

Unlike other recent recipients of this award, such as Google’s Salar Kamangar, Twitter’s Jack Dorsey and Facebook’s Mark Zuckerberg, Malaysia-born Lau, the first Chinese executive to receive the award, comes from a traditional ad agency background. Two decades spent in China’s advertising world included spells as BBDO China chief executive and Publicis managing partner, prior to his move to Tencent in 2006.

It was the skills honed in the agency world, where he was able to second-guess what western and domestic marketers want in a prohibitively tough Chinese market, which proved pivotal to the growth of Tencent OMG.

Tencent was founded in 1998 by a group of classmates who devised one of the first versions of an instant messaging service called QQ, which took off and became the primary communications tool for a generation of Chinese. QQ.com is now the most popular news portal in China and the exclusive content partner of publishers including Business Insider and the Hollywood Reporter in the country.

“No matter how quickly technology evolves, or how complicated the competitive landscape becomes, increasing value to consumers is always what guarantees sustainable growth,” Lau says.

The company has also made major strides in online video. As the largest platform to provide British and American dramas in China in 2014, Tencent Video recently became the most popular video platform on mobile in the country.

Lau is inspired by the constancy of change in consumer behaviour, and how this will impact on the future of media. At the forefront has been OMG’s aim to invest in what it describes as “world-class content” partnerships.

These have included the aforementioned deals with Business Insider and the Hollywood Reporter, as well as tie-ins with HBO, National Geographic and BBC Worldwide to bring TV and movie titles to Chinese audiences. For the next five years, Tencent OMG is also the exclusive media partner of the NBA in China.

Change in consumer behaviour is no longer a one-off occurrence, according to Lau, but a “constant companion”. He says: “I like to compare current consumer behaviour to rapidity of change in Milan’s fashion industry, where every three months trends change dramatically. Today’s consumer capriciousness is like the fashion industry on steroids.”

He believes that an era of “internet plus” will drive change at a macro level, with more users, more apps and more platforms for discovery.

“The internet is now being developed at the infrastructural level of the society. In China, the concept of the internet of things is becoming the internet of everything, where everything that is normal today will soon be internet empowered.”

Outside of his day job, Lau is also a sought after public speaker, whose judgements are taken very seriously by the Chinese business community and who is not shy in uttering public pronouncements that the internet can be a force for wider social change.

For instance, Lau is hoping to replicate the rollout of Facebook’s internet.org project and bring affordable internet access to everyone.

He says: “I pay tribute to both Mark [Zuckerberg] and Eric [Schmidt] and I have learnt a lot from them. I see that there is a lot of similarity in terms of what we are aiming to achieve in China and what they are doing elsewhere.

“Half of China’s population is not yet using the internet; many of them are elderly, or young children, or those who cannot afford the necessary equipment. To plug those people into the internet world with easy and inexpensive access will be our major mission.”

In the media sector, the company is aiming to build “open, not closed” platforms, according to Lau.

“Tencent is also making efforts to build a platform which is big enough and open enough so that technological changes will eventually seek it out, settle on it and grow there.”

While Tencent has some way to establish itself as a global household brand, its proliferation in China shows no sign of abating. And media will be at the forefront of that.