Business / Technology

'Made in China' online enterprises on global mission

By Meng Jing (China Daily) Updated: 2014-09-16 09:18

Alibaba has been even more aggressive in the overseas markets. From May to July, it had teamed up with the official postal departments in Singapore, Australia and Brazil to ease logistics procedures and facilitate cross-border e-commerce between these countries and China.

Neil Flynn, head equity analyst at Shanghai-based, a leading financial analysis firm of US-listed Chinese companies, said that he has seen Chinese firms focusing on domestic markets because they understand their customers, and it is often difficult for foreign firms to enter the market.

"However, understanding the Chinese consumers can be very beneficial for expanding overseas. For example, Baidu has search engines specifically for the Thai and Brazilian markets. This is because these countries are emerging economies, and consumer behavior tends to be similar to that in China. So instead of having to wait several decades to get access to half a billion people, Chinese firms can expand overseas and get immediate access," he said.

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Justin Ren, professor of technology management at Boston University's School of Management, said Chinese Internet companies are expanding overseas for several reasons.

"Building a true global company is the dream of many Chinese entrepreneurs. China's Internet companies, which currently enjoy little brand-recognition overseas, all aspire to become the next Google or Amazon. Expanding globally will help elevate their status," said Ren.

Apart from the enhanced visibility, there is also the need for new markets, new suppliers, and new talents and ideas, he said. Previously, Chinese Internet firms were often seen as copycats of Western technologies.

For example, QQ was seen as an imitation of Microsoft's MSN Messenger, WeChat as an imitation of WhatsApp and Weibo an imitation of Twitter.

"But what we've seen is that these Chinese products have transformed from imitations to innovations. In particular, if we look at WeChat, its services are much more advanced than WhatsApp, and Western tech firms are looking to the Chinese market to understand the innovation and change that is happening," said Flynn, adding that the Internet sector will be a key driver for China's outbound direct investment.

Yu Yongfu, CEO of UCWeb Inc, which is China's largest mobile browser by market share, said in an earlier interview that unlike the personal computer-based Internet sector, which was pioneered by Western companies—US companies, in particular—Chinese firms can be leaders instead of followers in the mobile Internet industry.

"The mobile Internet has a lot to do with lifestyle. For example, people in the US and Europe spend a lot of time driving to work, while the majority of Asian people use public transportation. That means that Asian smartphone users on average spend more than two hours every day on the mobile Internet."

The strong reliance on the mobile Internet leads to innovation. What is more, the PC-based Internet is an industry with a unified world standard, while the mobile Internet industry varies among regions, he said.

But Ren sees many challenges for Chinese Internet companies to be successful in the global arena.

"Becoming an established global business requires strong institutional support from its home country: Its financial, legal (particularly those related to intellectual property), taxation and education systems all need to function well so companies can thrive. In this respect, China's companies have a long way to go" he said.

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