[This is a blog post about when our growth entrepreneur group spent a week in Shanghai in March]
After a week in Shanghai, It became very clear that China has taken a big leap from having a product driven strategy to ‘digital-As-A-Service’ driven strategy. And it has executed it very fast.
During the course of the week, we learned that this big move occurred in two waves.
- Wave 1, The Chinese internet move started in the 2000’s by giants like Alibaba and Tencent who were changing young peoples way’s of thinking.
- Wave 2 has just started and is being enabled by the new mobile paying technologies.
We saw hundreds upon hundreds of yellow bikes on the streets of Shanghai. Bike-sharing company Mobike, which started in June 2016 in Shanghai has raised four rounds so far, and now has 3 million (post-80’s generation) users per month and a total of 28 new competitors in China with the market soon reaching it’s 20 millionth new user – Silicon Valley is also starting to copy this bike-sharing model.
In regards to e-commerce in China, no one uses cash or credit cards anymore. Instead, China has moved directly from cash to mobile payments provided by Alibaba’s WeChat. We had very eye-opting meetings with both Alibaba and Tencent, the leading e-commerce service providers in China. Both have had a huge influence on the changes made and the way 200-300 million people from the Chinese middle class think today.
E-commerce has been a great opportunity for the Chinese because the traditional business chain in China has been very slow. Tencent wants to “connect everything” and Alibaba wants “all users to use the Alibaba ecosystem and live happy lives” but gathering big data is the most important strategy for both.
Data-driven transactions accumulate big data from different platforms to create new service like micro-loans. Customer shopping behavior, shopping history and credit history will be adjusted automatically in loan decisions in micro-loan service’s. Alibaba’s e-commerce strategy, big data and focused advertising, is feeding new users at an exponential pace and there are 600 million micro-loan service users right now. In China, where the basic unit metric is 10 000, the micro-loans are in the range of 1m to 10m RMB.
If China is the main course, Europe is dessert for Alibaba… Alibaba is looking at Europe and the US.
For the next time I visit, I think I’ll have to take a closer look at mandarin-Chinese language teaching providers..
// Päivi Kangasmäki
CEO & Founder, BackedByCFO and Boardman2020 board member