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Super-Apps on the rise – what we can learn from China about digitization

The digital present is Silicon Valley, but the digital future is emerging in China. After the economic opening in the 1980s, China’s economy grew at double-digit rates each year. Today China is on its way to become a superpower. A digital network world has emerged that can hardly be surpassed in speed and innovation. Cashless supermarkets, smartphones instead of cash are part of everyday life. Now you can pay without cash even in small snack bars. What is exciting here is that China’s Internet companies operate without competition from abroad. The government wants it this way, Amazon, Google and Co don’t stand a chance.

But what innovations, what inspiration can Europeans expect from China? Is China the new Silicon Valley? How much will Chinese digital corporations shape the world? And what can we learn from them?

Karl Krainer (Gedankenfabrik), Dr. Tu-Lam Pham (Digital IQ) and Carina Saxlund (Wirecard Labs) provided initial answers to these questions at our China@Medientage Special on July 11, 2018.

China@Medientage in the Eventspace

Why China is the new Silicon Valley

The Chinese e-commerce market is currently worth 865 billion dollars and is growing by 26.8% annually. The average Chinese e-commerce buyer spends $1,800[1] annually on online retailers. The most popular shopping categories are clothing, travel and food. China is now home to e-commerce giants such as JD.com, Tencent and Alibaba. Nine of the world’s twenty most valuable Internet companies now come from China.

In the western world, Amazon is considered the epitome of the digital trade and generated one billion euros in sales on Black Friday last year. Alibaba, the Chinese equivalent, achieved a turnover of 22 billion dollars on Singles Day. The reason for this is the consumer behaviour of the Chinese. For them, consumption is a kind of freedom. In addition, they have a great passion for innovation and know how to involve consumers in every way.

The new giants of the digital world

China used to be notorious for copying products, but today Chinese companies are setting global trends in terms of technology products and business models. China is a pioneer in digitization. There is already a Chinese equivalent for every American digital group, which usually has a significantly higher market value.

The largest are Baidu, Alibaba and Tencent. Baidu is the largest digital platform in China and the equivalent of Google. 87 percent of Chinese prefer the platform as a search engine. Alibaba as a counterpart to Amazon already has a turnover of more than 750 billion dollars a year – Amazon, on the other hand, has a turnover of just under 180 billion dollars. There is also a Chinese equivalent for Facebook in China: Tencent. China is digitizing at an incredible rate. The result is gigantic Internet companies and independence from the Big Five, the five tech giants from the USA.

Beautiful, new mobile payment worlds

One result of this strategy is Tencent’s WeChat app – a kind of Facebook, Whatsapp and Paypal in one.  The second most important player in the payment area is the Alipay app from Alibaba. Both are currently worth over 350 billion euros each and have achieved what Apple and Google currently still dream of: the use of smartphones as the primary means of payment. By 2016, 75 percent of all online payments were made with the smartphone. These payments are almost exclusively processed via WeChat (Tencent) and Alipay (Alibaba). The country is on the way to a cashless society.

Alipay is the world’s largest mobile payment network with more than 622 million active users and more than 100 million transactions per day. Alipays cross-border payment is available in 15 currencies. WeChat is the number 1 communication app of the Chinese with 902 million active users and 800 million active users of WeChat Pay. Online payment provides an incredible amount of data: Each purchase can be assigned to a person, a day and a time.

Conclusion: What Germany must learn from China

One thing becomes clear: China sees opportunities in digitization, while Germany often still sees disadvantages. The fear that existing jobs could be cut because of digitization sometimes prevents Germany from seeing digital innovations as a benefit. To keep pace with developments, Germany must “dive into” innovations and lose its fear of them. In addition, this requires thinking outside the box, in keeping with the motto “Think big!”

What can Germany still learn from China? Here is a summary of our expert Dr. Tu-Lam Pham:

  1. National strategy
  2. Top focus on new technologies
  3. Massive investments by the state and companies
  4. Seeing opportunities instead of risks
  5. Own ecosystem
  6. Pragmatism instead of ideology
  7. Constantly learning
  8. Humility instead of arrogance
  9. Work harder
  10. Focus on education

China@Medientage 2018

At MEDIENTAGE 2018 you can find out what special features exist in the media industry and how the AI, live streaming or mobile payment trends are implemented here.

The topic China is key aspect of MEDIENTAGE 2018 .

[1] https://www.ppro.com/wp-content/uploads/2018/02/PPRO_country_insight_China.pdf

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