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How China tech companies started going global

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China’s tech barriers have come down in recent years, especially for homegrown companies expanding abroad.

Benjamin Harburg, managing partner of MSA, a Beijing-based Venture Capital firm, and an investor in Uber, Didi Chuxing and Mobike, has been seeing tech’s growth evolve over recent years and has several possible explanations.

“China sends 350,000 students to America every year. America sends about 9,000 to China every year. That’s about the same we send to Costa Rica every year,” Harburg said.

“This is the world’s second largest market and will soon be the world’s largest market. Americans on average just do not know China.”

According to Harburg, China’s global tech growth to boils down to three stages. First, when Chinese public tech companies, such as Alibaba and Tencent, went public.

Second, when Chinese private corporates started investing abroad, like Didi Chuxing investing in the ride-hailing company Careem in the Middle East.

And third, Harburg noted Chinese companies have been going global organically. For example, Xiaomi, which went public this year, recently passed Apple in smartphone units sold in the second quarter, according to data by IDC.

Meanwhile, it’s become India’s top smartphone market and recently announced it has plans to have 5,000 stores by the end of 2019.

“If you could make it out of the gauntlet of China, especially as an entrepreneur or as a business model, you’re so battle-tested, that when you come into a more emerging market, one that’s maybe a few years behind China in terms of its competitive landscape, capital availability, things like that, huge swaths of the market can be gobbled up relatively quickly,” he said.

“I think we’re just at the tip of the sphere in terms of Chinese companies going global.”

He also talked about screening for diseases from just one picture of an eye. ”In China, we don’t have family doctors and a referral system. Everyone will go to the big hospitals, which is why big hospitals are very cramped,” he explained. Thus he hoped A.I. would reduce the need for people to go to larger, urban hospitals.

Catrinel Hagivreta, the founder and CEO at MEDIjobs, an A.I.-based recruitment start-up for the health care industry, explained to CNBC why China needs a radical solution like A.I.: “Studies have shown that aging population is a huge problem for China, with one-in-three people being 60 years or older by 2050. On the other hand, in 2016 the Chinese government raised the limit on the number of births per family from one to two, which means more births and a population growth boom,” she said via email.

“For the medical industry, those two factors indicate: a growing number of retiring health care specialists and a growing need for health care services … That requires a radical solution like A.I. for health care, which can better allocate resources to patients. Especially in the rural areas, technology like telemedicine is one of the few ways issues like this can be solved,” she said.

Meanwhile, Dan Wang, a technology analyst at macro research firm Gavekal Dragonomics, told CNBC via email he thinks A.I. can make an impact, but believes there’s room for improvement.

“AI has the potential to significantly improve health-care technologies, especially in medical image processing. On the margin, however, I suspect that low-tech solutions are more important for transforming health care in China. There’s still lots of room left to improve the basics of patient care and health administration,” he said.

SOURCE: CNBC.com

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