China edging closer to tech supremacy

China edging closer to tech supremacy

Tue, 21/08/2018 - 13:18

BIG TECH Xiaomi’s Hong Kong IPO raised $4.72 billion, the world’s biggest technology float in nearly four years. Photo: Reuters

China has been abuzz with tech chatter over the past few weeks.

You are probably thinking that’s nothing new, but the significant change in tone has piqued our interest.

IPOs for Xiaomi and Tencent Music, and the expansive 2018 China Internet Report have been grabbing headlines, but beneath all that many experts are starting to ask: has China taken the mantle from Silicon Valley as the leader in tech?

In the blink of an eye China has done the unthinkable and transformed its cheap, ‘copycat’ perception into that of a world leader in innovation.

And this trend is contagious among China’s brands both in and outside of the tech sector – in 2018 consumers view 82 of China’s biggest 100 brands as highly or moderately innovative.

Leading the pack, the stories of Xiaomi and JD are representative of how brands in China are tracking.

Xiaomi founder Lei Jun proclaims his company is “a new species”, blending internet services within its product suite and shrugging off classification as a hardware company.

JD notes it has spent 12 years as a retailer and wants “the next 12 years to be as a technology company”.

We even just saw Luckin Coffee creating an innovative, new retail-type model to combat one of the last truly unchallenged foreign mega-brands, Starbucks.

As the world begins to notice what these dynamic Chinese brands are doing, it pays to keep in mind what this has meant for the average Chinese consumer and what they expect from brands across all aspects of consumer engagement.

A few examples:

Social: Half of WeChat accounts lost followers in 2017.

We have seen a dramatic rise in gaming, VR, animation and development within accounts to try stand apart on social media.

The boom in mini-programs has only exaggerated this, and many foreign brands are in dire need of rethinking their WeChat approach.

Retail: Many consumers (61 per cent) think pop-up stores provide more attractive shopping experiences.

Retail is constantly in flux, with opportunities and pitfalls abound for brands that are not diligent. In China’s uber-competitive space, pop-ups can bring the grunt shoppers are looking for as they increasingly crave an experience.

Advertising: China in 2018 is a different animal, and misaligned messages are throwing good money after bad.

Tired or uninformed advertising has seen many brands fall short in China, yet some well-considered research and understanding can see a brand ride the wave.

Last month through a challenging but well-embraced campaign, Nike captured the end of the mollycoddling one-child policy, with a huge national push to get children into sports and activity, and the competitive and individualistic millennials ascending into parenthood.

As everyone in China knows, the market moves faster here than anywhere, and for that reason many brands will fall in the wake of its constant innovation.

China Skinny ensures our clients are on top of, and ahead of, market trends.

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Mark Tanner is the founder and managing director of Shanghai-based China Skinny. Through his agency he has worked with more than 150 international brands such as IKEA, Colgate, Tourism Malaysia, ANZ, Westpac and IHG on their China market entry and growth strategies, trend analysis, branding and new product development.