Also covered are sustainable packaging promises, a new insurtech unicorn, and Walgreens partnerships.
China’s ascent in tech has been rapid (37 unicorns were birthed in China just last year). It’s the one place that might rival Silicon Valley in terms of funding to game-changing companies.
China has also been labeled a copycat of US business models and companies. While there is an element of truth to this, dismissing China as a mere copycat that vacuums up US business models and churns out copies is lazy and incorrect.
I was in China in January of this year and as our footprint has grown there, I’ve spent more time talking to our China clients and trying to map our growth strategy there.
And here is the reality.
- Copying goes both ways — Chinese corporations and investors are, of course, interested in US business models. But the copying goes both ways. If you’re in financial services, retail, or technology and are not watching what Alibaba is doing and what their $150B Ant Financial/Alipay unit is doing, you are not doing your job. When we talk to our corporate clients and we ask them about what insurgent they are paying the most attention to, Amazon is at the top of the list. Perhaps surprisingly, Alibaba is 2nd on the list. In fact, many forward-thinking enterprises and startups are trying to understand and copy aspects of the China playbook now. Yes — copying is a 2-way street.
- China-specific business models — There are business models that work in the US that don’t necessarily work in China and vice versa. SaaS is one that is huge in the US but is still incredibly nascent in China. On the flipside, one just needs to look at edtech. Edtech has been mostly a good place to see money die in the US. China, on the other hand, due to a variety of social and economic factors, has been ripe for edtech. This simple search highlights 14 $1B+ valuation transactions in China in the last 5 years. Recently anointed edtech unicorns in China include Yuanfudao and VIPKID. In that same time frame, the US has seen half the number of $1B valuation edtech deals and most are mergers or acquisitions of players in consolidation plays vs. growth-focused investment rounds.
What do you think?
For those of you who do lots of work with China or are studying the market, are you seeing lots of other business models that are China or US or country-specific?
Or do you think I’m incorrect? Is China still primarily a copier of foreign business models and ideas?
Let me know.