What is QUANTech? An easy-to-digest selection of what’s hot in tech and the impact on society to help you keep ahead in this rapidly changing digital world. Brought to you by Denys Malengreau (@D_MLG).
QUANTech only refers to consulted sources.
July is in full swing and tech-related news is slowing down a bit. A chance to write up and publish post-China impressions after a visit to Shanghai last June. In an interview with La Libre Belgique, I did discuss both the technological and political dimensions of China today. The interview is to be read here.
Still on the Chinese side, we heard this week about an agreement reached between Tesla and Shanghai authorities for the settlement of a factory of the US company in the world’s most populous city. Such an agreement does not happen by chance. As the AP article puts it: « Tesla is among companies hit by additional 25 percent import duties imposed by Beijing in retaliation for a tariff hike by U.S. President Trump in a dispute over technology policy. »
This week, we also learned about Magic Leap shipping its first « spatial computing » mixed reality headset this summer. The renowned company used to showcase impressive demos without delivering end-user product for long. This is for sure long-awaited gear which has caught public attention quite early. More on that later this summer.
Back to China for this week’s focus. The South China Morning Post, Abacus and the American venture capital seed fund 500 Startups, which first introduced the report in 2017, released the China Internet Report 2018 this week. A visual synthesis of 97 slides that provides a wealth of information on the current state of China’s digital economy.
Some lessons can be learned from this report.
- If artificial intelligence whose data is the fuel is key to the new economy, China has a considerable competitive edge: there are three times more smartphone users (717 million vs 226 million) and 11 times more mobile payment users (527 million vs 48 million) in China than in the US. The Chinese Internet population (772 million) is nearly three times (2.6) larger than the American Internet population (292 million). And this only corresponds to a penetration rate of 55% of the population, which offers a significant margin for development in mainland China only (Africa aside).
- In 10 years, the Chinese Internet has significantly empowered the rural population. The number of rural Internet users increased from 53 million in 2007 to 209 million in 2017.
- China’s digital economy is thriving fast with strong public-private partnerships between the Chinese government and tech conglomerates in the country with little regulation in that matter.
- Chinese Internet giants are very strong ecosystems doing (almost) everything. Such tech silos offer products and services in ecommerce / online-to-offline (O2O) / retail, content and media, messaging and social, the sharing economy, AI, smart devices, the autonomous car, blockchain, fintech, education, gaming and esports, among others. The report offers a deep-dive by sector.
- Social e-commerce or social+ is one big trend in China with strong mobile payment adoption. Companies incentivise users to take action: Discounts or cash may be offered when users act in a certain way for instance.
All in all, one thing is for sure: With a massive Internet population which keeps growing, strong governement support and venture capital flowing, China is to play a major role in the digital economy. This will at least be a source of inspiration for technological innovation in the Western world, for better or worse.