The Great Reversal: Chinese Internet Companies Have Begun to Lead the Global Internet Industry

Internet giants should take up their responsibility and endeavor to develop real cutting-edge products. Only then can China really lead the world in the high tech industry.

(Chinese Version)

As is known to all, the modern history of China is a history of constant imitation from the West, from natural science to enterprise models, from management mechanisms to everyday lifestyle, etc. This trend lasts for over a hundred year, and continues even in the information age. However, things begin to change these years.

When we look at the Internet industry, we might notice the same shift during the past two decades. Two decades ago, Copy to China (C2C) model dominated: Sina was Chiniese AOL, Sohu was Chinese Yahoo, Taobao was Chinese Ebay, OICQ was Chinese ICQ, etc. A decade ago, merger was the keyword: Yahoo acquired 3721, Rakuten acquired Ctrip, IAC acquired eLong, Amazon acquired Zhuoyue, CNET acquired zol.com and Fengniao.com, Google wanted to acquire Baidu, and finally Alibaba acquired Yahoo China, while Yahoo invested 1 billion dollars and picked up a 40% stake in Alibaba. Since then, Chinese Internet companies had stopped merely copying from their American counterparts and began to copy only specific techniques, models, and mechanisms.

Later on, a good amount of similar products were developed in China. However, these products had been adjusted for Chinese market: Sina Weibo was not exactly the same as twitter, Youku Tudou was not identical to Youtube, and WeChat was not similar to Facebook at all.

On the contrary, American companies had begun to learn from their Chinese counterparts. Facebook imitated WeChat by launching 60-second voice message service in 2013, while Google announced that it would start providing domestic services and enter the O2O market in July, 2015, two and a half months after Baidu announced to invest another 20 billion RMB into Baidu Nuomi. Google’s this announcement could be a cornerstone in the history of Internet in China, since Google finally started to “copy” its previous follower, Baidu.

However, this shift took place not only in the Internet industry, but also in the mobile Internet sector. After the launch of AppStore in 2009, a variety of apps were developed by Chinese companies. Chinese developers stopped copying from foreign companies, but started to develop their own products. Gradually, Chinese developers’ innovations began to have a great impact on their overseas competitors.

The reason why the Copy to China (C2C) model used to dominate China’s Internet industry is that Chinese entrepreneurs had to compare their products to American products so as to help foreign investors understand their products and invest in them. After Pinterest, Snapchat and Vince became popular in the US, a number of copied products were developed in China as well. However, most of them quickly disappeared.

How come? These products were directly copied to China and failed to cater to Chinese users. Without an adequate amount of adjustment of innovation, no C2C products can succeed.

In the past two years, some Chinese companies became a huge influence for foreign markets after their direct entry into foreign markets. These companies, including APUS, Liebao, UC, and Banmi, etc., indeed, made a fortune. An investor from Innovation Valley told me that IGG, a mobile game developer based in China, profited by 952 million RMB last year, quite a fortune.

However, other companies influenced foreign markets indirectly, that is, by developing new products and setting up new standards.

Let’s look at two typical companies, one in the US, and one in China. Previously, Baidu copied Google really hard: Baidu Map was copied from Google Map, Baidu Hard-drive Search was Google’s Desktop Search, Baidu Toolbar was similar to Google Toolbar, Baidu Answer was the same as Google Answers, and Baidu Ad was much like Google AdSense.

During these two years, Baidu stopped to merely copy Google, but started to “innovate”. For example, after Google rolled out Google Glass, Baidu also developed BaiduEye. Yet, BaiduEye, used in the back of the head, adopted a completely different TO B model so as to better cater to Chinese customers.

At the same time, Google also started to “copy” Baidu. In 2013, Google launched Google APP Database, a cloud storage platform similar to Baidu Cloud. At the end of 2014, Google collaborated with Ticketfly, Ticketmaster and AXS and provided online booking services, while Baidu launched similar services three months ago. Recently, Google followed Baidu and began to provide O2O domestic services. Investors, however, were happy to see that Google had started to “copy” its previous followers. After Google’s announcement, its stock price roared.

For sure, Chinese Internet companies have begun to lead the global Internet industry in some areas. In the next decade of the 21st century, more innovations and technologies may be carried out in the conversation between the East and West. This month, Chinese Academy of Science and Technology for Development issued China Innovation Index 2014. According to the report, China ranked 19th in the world in terms of innovation capability, while the innovation capability of Chinese enterprises ranked 13th. When we look at the same report of 2013, we may find that 8 of 10 countries whose innovation capabilities of enterprises ranked top 10 ranked top 10 as a whole. That is to say the innovation capability of a country’s enterprises is an indicator of the innovation capability of the country as a whole.

In the future, Chinese Internet companies should not only work out new business models, but also new technologies in areas such as artificial intelligence, sensors, etc. At the same time, Chinese innovators should also admit that they are now catching up with the West in some areas. Internet giants should take up their responsibility and endeavor to develop real cutting-edge products. Only then can China really lead the world in the high tech industry.

 

[The article is published and edited with authorization from the author @Manyidaxiong, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at ECHO), working for TMTpost.

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  • 不停的追赶总该有超越的时候嘛!

    回复 2015.07.30 · via android
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