Pioneers, Hidden Champions, Changemakers, and Underdogs by Mark J. Greeven & George Yip & Wei Wei

Author:Mark J. Greeven & George Yip & Wei Wei
Language: eng
Format: epub
Tags: Innovation; China; hidden champion; underdog; technology venture; change maker; nextgen entrepreneur; Chinese innovator; swarm innovation; network mindset
Publisher: The MIT Press
Published: 2022-03-18T16:00:00+00:00

Digital Disruption

The changemakers employ digital business models to disrupt established industries. By the end of 2017, China had over 750 million Internet users, up from just 22 million in 2000. One fifth of the total world population online is now Chinese. Although this growth and these numbers are remarkable, China has reached a penetration rate of only just over 55 percent of the population, just about the global average, but less than the United States’ 88 percent (or 287 million users), according to Internet Live Stats.3 The most recent trend is full connectivity, where mobile Internet, manufacturing, marketing data, and sales channels are increasingly being integrated. According to recent statistics from the China Internet Network Information Center, the number of mobile Internet users is over 680 million (93 percent of Internet users), compared to 225 million mobile Internet users in the United States (78 percent).4 Although China is far behind the United States in terms of Internet penetration, mobile Internet usage is ubiquitous and higher than in the United States.

The high proportion of mobile Internet usage has interesting consequences. For instance, mobile payments in China are far more accepted by Chinese consumers than American consumers, an advantage that perhaps was gained by leapfrogging over personal computer payments and going directly to mobile digital payments.5 In fact, the percentage of users frequently using online payment and mobile payment is similar, around 60 percent. It is therefore not surprising that China is leading global developments in fintech, especially mobile digital solutions. For instance, in 2012, 51 Credit Card was established in Zhejiang, starting out as a management tool for managing consumers’ credit cards. By 2012, the majority of Chinese people who had credit cards had multiple credit cards. The service reminds users of their payment due dates and analyzes spending patterns across credit cards from different banks. This company later transformed itself into a platform for peer-to-peer lending services. Leveraging its large user base and associated user data, the company is well positioned to offer individual lending services. By April 2018, the company had a pre-IPO valuation of over $1 billion and was planning to go public on the Hong Kong Stock Exchange in 2018.

The changemakers are disrupting not just the financial industry but also many different traditional or established industries and is going so in short time frames. For instance, Toutiao, established in 2012, uses artificial intelligence to provide mobile customized news recommendations. By analyzing online social behavior and profiling each individual user, founder Zhang Yiming’s service develops news interest maps. His biggest competitor is Tencent News, an incumbent Internet giant and China’s highest-valued company. Toutiao’s success comes not from early adopters in first-tier cities but from users in other cities, especially users who are under thirty years old: 90 percent of its users come from outside the first-tier cities. By 2018, the company was valued at over $30 billion. With over 700 million registered users, it has over 140 million daily active users who spend on average over one hour a day in the Toutiao app.

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