Among the top 10 most valuable tech companies globally are two China tech giants
with many more up and coming startups making their presence felt.
The industry has become a serious rival to Silicon Valley, but there are political hurdles ahead.
This is your Bloomberg QuickTake on China’s tech giants.
Early on, Chinese companies like Tencent had a reputation for being copycats.
Its QQ instant messaging app originally looked a lot like ICQ - a popular messaging app used in the U.S.
I would say 90% of them all got their original aspiration from a U.S. equivalent.
Sina, for example, their portal business was an equivalent of Yahoo. Weibo was an equivalent of Twitter.
Alibaba--people would say that their model was a hybrid of eBay and Amazon. And so the list goes on.
Comparisons are now harder to make.
Tencent’s 1 billion strong messaging app WeChat has grown from simply a texting app,
to a platform for shopping, flirting, dating, watching videos, playing games, and ordering food and taxis. There’s no U.S. equivalent.
Since the introduction of the internet in China, the government has controlled the web
with a complex system of censors and gateways known as The Great Firewall.
This has effectively quarantined China’s technology ecosystem, blocking access to the likes of Facebook, Twitter, and Instagram.
That’s enabled locals to develop services without competition from abroad and build platforms with a uniquely Chinese flavor.
And because of China’s large population, whose internet users more than double the entire U.S. population
the companies grew to be massive.
They became so successful that some U.S. companies are taking note.
I think a lot of people would point to Facebook trying to copy the WeChat model,
where they are allowing third parities to open e-commerce stores, third-party games being introduced to the platform.
But there’s increasing pushback. “China, they’re draining us, they’re taking our money, they’re rebuilding themselves.”
President Donald Trump says China is stealing overseas know-how and has imposed tariffs.
Bloomberg Businessweek uncovered that the Chinese even planted chips in computers for potential hardware hacks.
Two years ago we were seeing a lot of investment M and A (Mergers and Acquisitions) activity into technology in Silicon Valley from Chinese companies.
That’s all been put on brakes ever since the trade war.
Yet Chinese tech company names that only recently drew blank stares outside China are becoming increasingly familiar.
Take Huawei, it reached a pinnacle in 2018 by overtaking Apple in smartphone share globally.
But for China’s big tech companies to keep expanding, they’ll need to convince other nations that they mean no harm.