Analysis: Uber's Chinese-style debacle, as well as micro-channel, Alibaba's China Innovation

(Research papers Download News) China Activity Uber Uber sold to its Chinese competitor drops travel, then led some American reflection, 'The Wall Street Journal,' 'Bloomberg', 'New York Times' for the Uber sang a dirge, they with some kind of metaphor to imply US companies struggling in the Chinese market. And in August of the British 'Economist' is undoubtedly to defeat Uber Chinese-style writing the epitaph, it believes that 'the West China Internet companies caricatures need to make a change,' it is time to put away the arrogance and seriously face up to China opponents, including micro-letter, Ali Baba and drabs, their innovations are being imitated American competitors. The original title of this article as 'China's science and technology pioneers.'

Uber's Chinese-style debacle, as well as micro-channel, Alibaba's China Innovation

Google gone. Facebook blocked. Amazon is difficult forward. If you need further proof of China's technology market separate from the world, so this week seems to provide conclusive evidence. Taxi service company Uber (Uber), the world's highest valuation of the company decided to start their own business to its Chinese rival China drops travel. And before many companies, it also shattered the Chinese dream.

For many people, the lessons of the recent surrender agreement is very clear. China's technology industry is like the Galapagos Islands, peerless independent, unusual, local companies in which to flourish. Under the protection of government regulations and the national firewall, Chinese companies from external competition. This means that they do not need the protection of innovation, just west of the business model developed over the copy can thrive. In short, China is closed, Chinese companies are also spoiled, their intelligence will only be used to imitate.

Uber exit at first glance seem to fit this bad image. This start-up companies to Chinese business ceded to pieces: Next we will focus on the United States and other markets. To a certain extent, Uber surrender because a Chinese government regulations promulgated by the end of July. The regulations actually found illegal subsidies, but Uber to spend $ 1 billion a year to reward Chinese drivers and passengers. You can now seize the opportunity of the drops. Its predecessor was founded in 2012, more than Uber Taxi introduced three years later. However, if observed more carefully you will find some, is about to usher in a brighter future, more than a bit, Chinese technology companies as a whole will be, too.

Understand the intent

Isolated on the Chinese market, most often heard stories of foreign companies are either completely shut out, either by regulatory constraints. Government does restrict competition in some areas, and this is the reason China has more than inferior clones of Western companies, such as Baidu search. In addition to all this cottage version of Facebook is now deteriorating. However, China is not as critics put it difficult to penetrate. The world's most popular messaging app --Facebook's WhatsApp, you can freely use in China. But it is compared with China's leading micro-channel application pales (micro letter also defeated the formidable domestic Internet giant Alibaba). China is still the largest mobile phone market, Apple's iPhone. Uber order called the world's largest car market foothold made tenacious efforts: 17.7% of the shares drops is still not a bad consolation prize. Chinese technology giant nor himself cut off from the world. They invested in US start-up companies, such as Snapchat and Lyft, hand tour also acquired companies such as Finland, Supercell and Playtika Israel.

But to refute the voice again: to participate in the Chinese market is very good, but if being handicapped in win bad. So we underestimate the ability of China's leading technology companies. Like many online business as a cab industry is a fiercely competitive, winner-take-all markets: two drops itself is a product of the 2015 merger of domestic companies. Uber has already been surpassed. After five years of operations, by the end of 2015 Uber global accumulated billions of orders; while in China, only drops of total orders in 2015 year exceeded 1.4 billion. Despite a tremendous effort, Uber in China's market share did not increase to more than 10%. Drops knowledge of local culture, and better integration of social media platforms, and the taxi driver from the outset included applications, thereby obtaining their support. By subsidies as illegal, regulators halt US companies have lost this battle.

Similarly, irrespective of the country how to set up the firewall, outside of China is also no feature-rich applications to provide micro-letter. It has over 700 million monthly active users, and a collection of text, voice, browsing, gaming and payment functions. From to pay for parking to the reservation clinic, from ordering to buy coffee, it can be used to do various things. WeChat is not so much an application, as it is a complete mobile operating system. All Online Chinese mobile end-users in more than a third for WeChat. HSBC micro letter valuation more than 80 billion US dollars. For Chinese users, the application of the West looks hopelessly behind.

It is widely believed that Chinese Internet companies simply imitate Western companies who can not own innovation. For this arrogant perspective, WeChat is the best fight back. But it is not the only case. Alibaba payment hosted by the clever approach helps buyers and sellers of confidence-building, leveraging China's e-commerce. It is now using its large customer database to provide various services, including credit ratings, digital marketing, to review the visa applicant and dating sites users. Didi Taxi application also includes many new features, such as on-demand bus service, new car test drive. Sina Weibo (Chinese Twitter equivalent) is an embedded payment system, and supports high-quality content and services, these two functions are Twitter lacking. With the revenue from pay, virtual goods and games, China's Internet companies are not so dependent on the West rival online advertising.

Thus, the inspiration flow between China and the West has now become a two-way. Facebook will pay and commercial functions into the information application, it is inspired by the micro-channel; Snapchat from SMS applications to the media portal, and Google, Facebook and Microsoft chatbot (and customers chat intelligent software) sudden upsurge of enthusiasm this begins. Western consumers experience mobile Internet is being used by a Chinese success story to shape. To glimpse the future of mobile commerce, companies should not look only to Silicon Valley, but also look at the other side of the Pacific.

Digital dragon

Policy makers should also study under China. Nowhere can the digital marketplace, 'winner takes all' the advantages and disadvantages of display even more fully. As shown in the micro-channel, accounting for a dominant applications, especially embedded payment systems give users amazing convenience. But monopoly also dangerous. Didi now accounted for 90% market share, but not worth mentioning rival, one can imagine to spend more passengers, and the driver will earn less. How to strike a balance between convenience and monopoly, regulators for the digital age is a big problem. There is a revelation has been very clear: Compared to everyone and Baidu, drops and micro-channel is to grow in the fierce competition. If China's science and technology pioneer aims to be a truly global champion, the competition is their friend. Look carefully, and the world. (Source: 'The Economist'; compile: free download)

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