We in Silicon Valley tend to think that the world of technology revolves around us. We expect innovations to emerge here first and then radiate to the rest of the world.
But the truth is that there’s a big wide world out there, and technology innovation is happening all over. Nowhere is that more true than in China.
We’ve all heard the population numbers for China: nearing 1.4 billion people, which represents approximately one-fifth of all the people on the planet. More than four times the population of the entire United States. Outpacing the second most populous country, India, by more than 100 million people.
But we hear less about China’s technology innovation and adoption, particularly in the areas of mobile devices and social media. According to surveys by Pew Research, 95% of adults in China own a cell phone. In the United States, that number is 91%. So in percentage as well as raw numbers, mobile technology adoption in China is ahead of that in the United States.
Mary Meeker, a partner at the venture capital firm Kleiner Perkins Caufield Byers (KPCB), recently released a fascinating “Internet Trends 2015” report. Here are some of the interesting China-related factoids included in the report:
- In December 1995, 13 of the top 15 global public Internet companies, ranked by market capitalization, were from the United States; the other two were a German and a Canadian company. By May 2015, U.S. companies occupied 11 of the top 15 spots, with Chinese companies moving into the other four places, at number 3, 6, 8 and 11 on the list.
- China tops all other countries in the world for the total number of mobile subscriptions: 1.301 billion subscriptions in a population of 1.356 billion. That’s nearly one subscription for every person, including each child, in China.
- The WeChat social communication platform (the version inside mainland China is called Weixin) from Chinese Internet giant Tencent has achieved scale and engagement levels in China that eclipse that of Twitter or Facebook in the United States. WeChat/Weixin had nearly 550 million monthly active users as of the first quarter of 2015—which is almost twice the total population of the United States.
- Homegrown smartphone maker Xiaomi is the smartphone shipment leader within China, ahead of rivals Apple, Huawei, Samsung and Lenovo.
China and the IoT
As one of the slides says in Mary Meeker’s KPCB report:
“China = Internet of Things Alive & Well”
China’s 632 million Internet users (as of 2014) overshadow the country with the next-biggest user base, the United States, which has 268 million Internet users.
Of course, technology adoption is not the same thing as technology innovation. But China is demonstrating leadership in more than just sheer numbers.
Chinese social apps are integrating commerce in ways unmatched in the United States. For instance, the social commerce app Mogujie seamlessly integrates content, product, buyer and seller, allowing users to browse, chat and pay all in the same app. Similarly, Milishuo is a pioneering crowd-sourced social commerce app that integrates the design, production and sale of fashion items into a single, unified service.
In addition, China’s leading Internet companies are evolving from information-only providers to adding on-demand services such as food delivery from local restaurants and taxi services. They are also competing with one another to provide IoT services to manufacturers, much as Amazon Web Services (AWS) does in the United States.
When it comes to global battles for IoT dominance, these Chinese Internet behemoths must be taken very seriously. And their intentions in the IoT are no secret. As early as 2011 and 2012, publications were running articles such as, Internet of Things to bolster food safety and China looks to lead the Internet of Things.
Focusing on the ‘Things’
In addition to the ‘I’ part of the IoT, China also is ahead of the game in the ‘T’ part. China has been the global center of ‘thing’ manufacturing for many years, and more recently Chinese companies have added industrial design, design-for-manufacturing and other related expertise to their capabilities. China is no longer just the place to go for cheap, high-volume manufacturing. It’s also a purveyor of design and manufacturing skills.
Manufacturers in China are becoming increasingly sophisticated, with many building retail brands for worldwide consumption. One example is Yifang Digital Technology, a leading consumer electronics manufacturer that sells its products through large U.S. retailers including Target and Walmart. Yifang is using the Ayla IoT platform to build a new generation of connected products, including its NexTurn home control platform. The NexTurn platform is expected to compete well against already introduced U.S. home automation products.
Back at home in China, large manufacturers have tremendous incentive to see the IoT take hold. With a huge population also comes a multitude of products—as well as the pressure to boost efficiency in every way possible. That pressure is especially keen in a country such as China, where much of its rural population remains without electricity or has inconsistent, poor-quality power, and where its growing urban population means adding new million-person cities each year.
Through more precise and automated controls, the IoT promises to help people reduce energy use and emissions in everything from light fixtures to air conditioners; to reduce water use for farming and in restaurants; to help traffic move more smoothly by better coordinating light signals; and to reduce energy theft through better monitoring of use.
So, putting it all together: A huge population base voraciously adopting technology. Technology and manufacturing companies exhibiting high levels of innovation and churning out more and more potentially connected products. A strong incentive to boost efficiency, anywhere and everywhere possible.
The result is that those who gaze in admiration at the achievements coming out of Silicon Valley might be shocked to turn around, one day soon, and see China standing tall as the real innovation leader in the IoT.
Edited by
Ken Briodagh
