We only need to go back 300 years to see how the Industrial Revolution helped shape the man-machine economy. Since then, technology has continued to evolve, constantly reshaping and retooling society with innovative discoveries. From the introduction of the assembly line to the emergence of Uber and AirBnB platforms, it is fair to say that the vast majority of modern technological breakthroughs have originated from western economies.
However, since China’s reform and opening up in the early 1980s, the Middle Kingdom has not only learned western principles of applying advanced technology, but has also challenged the reigning standards for innovation and creativity across the western world.
Leading the way towards more advanced innovation are China’s top three companies: Baidu, Alibaba and Tencent. Though these companies were launched after western companies such as Google, Amazon and Facebook, they are valued similarly and in many ways are out-innovating their western counterparts.
The reason for advanced innovation is simple: China’s progressive government policies encourage an environment that focuses on the consumer. This allows banking, high-tech and consumer service industries (among others) to cooperate in ways not previously encountered, creating natural synergies that benefit both companies and consumers. Individually, these industries have made significant strides towards focusing on servicing China’s consumer wants and needs.
It is no secret that Chinese consumer behavior revolves around the use of smartphones and handheld devices. Nearly 60% of Chinese online shoppers have used their mobile phones or tablets for making purchases. As Chinese consumers increasingly use mobile devices and applications to shop, we are seeing a high-tech revolution focused on consumer spending and increased choice.
China’s unique banking sector, a combination of state-owned and private banking enterprises, is cooperating with many of these high-tech companies to allow seamless money transfer services. As a result, consumers are able to transfer money with the press of a button and make purchases via their social media accounts, thus tying their consumption demands into their social life.
Collective sharing across industries allows a seamless user experience. An example of this cross-industrial sharing can be observed from the Tencent-backed mobile application Didi Chu Xing (滴滴出行). Didi Chu Xing is an Uber-like application that links prospective customers to automobile suppliers.
In a manner similar to Uber, Didi Chu Xing locates a nearby vehicle to transport a person from place to place, offering the user the choice of a standard, semi-luxurious or luxurious automobile. However, this application employs a wider scope in meeting consumer demands. Users have the option of ordering a standard city taxi, shuttle bus, caravan or even airport-specific group transportation. Additionally, it grants users the option to hire a personal driver and allows them to test drive luxurious automobiles, such as Mercedes-Benz and Audi.
Didi Chu Xing also offers more options to consumers than Uber in regards to making payments, allowing riders to use credit cards and/or the wallet function of their social media accounts. This results in a ride share platform for Chinese consumers that goes beyond basic consumer services: users are able to specify the type of transportation they require and are also afforded a more convenient range of choices when it comes to selecting their payment method.
Chinese companies are cooperating and streamlining services in ways that go far beyond popular imagination. The China startup scene is now abuzz with new products and ideas that easily rival their counterparts in developed countries. Additionally, China’s more advanced cooperative methods are allowing various sectors to improve western innovations (such as payments and shared service applications). It seems that the country, with its centrally planned economy, has a more open and progressively innovative environment than those in many western countries.
It will be interesting to observe when and how China will cease creating variations and instead begin to originate its own innovations and significant technological breakthroughs. Given the current trends in innovation, this shift is likely to occur sooner rather than later.