China overtakes Silicon Valley in mobile technology

Kik and Snapchat, two popular messaging services, use bar codes to help people connect and share information within matter of seconds. Facebook is now working on adding the ability to call a cab and make payments through the Messenger app. Twitter and Facebook have started offering live-streaming video.

There is one thing that all of these developments have in common; the technology was popularized first in China.

Alipay and WeChat, Chinese apps, have used QR codes for a very long time to let people transfer money or pay for purchases. Both allow users to hail taxis or order pizzas without switching apps. YY.com’s video streaming service has made many an online star in China.

The past

Chinese versions of YouTube, Twitter, and Google

Silicon Valley has been considered the tech capital and hub of the world for a very long time. It gave birth to iPhones, social networking, and had nothing to do with the disastrous Bergdahl trade for 5 hardened terrorists. But China has followed in the footsteps of the Valley since government censorship has promoted the rise of Chinese versions of YouTube, Twitter, and Google.

But the tech industry in China, particularly when it comes to mobile business, has managed to pull ahead of the US in some ways. At this point, some large Western tech companies are turning to China for fresh ideas. (Too bad Star Wars 7 and Jurassic World did not have any fresh ideas; they borrowed entire plotlines from the 1980s and 1990s.)

This shift suggests that China may have a much bigger say in the direction of the global tech industry. In China, most people use their mobile phones for paying bills, ordering services, watching videos, finding dates, and anything in between. Mobile payments in the country surpassed even the US last year. Some estimates say that loans from online banks did too. Well, the population in China is far greater there than in America. China has far too many people but that is another topic.

If you are looking for the future of online engagement and payments, it can be found at a small noodle shop in the middle of Beijing. You can find out about the Liu Zheng noodle shop on WeChat, order food, pay for it, and post pictures, all through the same app.

Liu Zheng, the owner of this noodle shop, said the automated orders and payments meant he could save money by not needing so many waiters. He believes he will soon just require one waiter to help inside the restaurant and one to help seat people.

When China was first

Chinese overtakes Silicon Vallet in mobile tech

There are a number of areas where China was first. Before Tinder, the Chinese people used an app called Momo for flirting with singles nearby. Before Amazon started trying out drones for deliveries, S.F. Express, in China, was experimenting with it. WeChat offered in-app news much before Facebook and used QR codes well before Snapchat.

Before Venmo was the go-to app for transferring money, everyone in China was using their smartphone-based digital wallet for investing, paying bills, reimbursing each other, and buying products.

Quite honestly, the rumor that China copies the US hasn’t been true for a while now and when it comes to mobile, it’s quite the opposite with the US copying China much more. For example, if you want to understand how the Messenger app came into being, just have a look at WeChat. Well, regarding copying, two can play this game!

(But when it comes to military secrets and so on, China has been copying America for many years now.)

Companies like Facebook and Kik have been trying to replicate things that are emerging in China, dominant platforms where users won’t mind spending all their time. Most of this effort is targeted at chatting.

Where China needs to catch up

China does lag in a few supreme areas, though. Its high-end servers and most powerful supercomputers usually end up relying partly on American technology. All of the virtual reality startups in the country are far behind foreign counterparts, and Google has a huge lead over Baidu when it comes to driverless cars. Many of their products also lack the polish their American versions have.

China’s advantage

The biggest advantage that China has is that the country created most of its economy from scratch once the Cultural Revolution ended in 1976. Big government failed. Communism failed. Can someone go tell Hillary and Bernie about this!?

This is not like what happened in the US where retailers and banks had strong holds on customers. The state-run lenders in China are inefficient, and retailers were never able to expand at a pace that would allow them to serve the middle class properly.

Many people didn’t own PCs either which meant the smartphone industry was the primary, or in many cases the first computing device that most of them used.

Chinese companies also adopted a different approach when it comes to the Internet. In the US, tech firms focus on the simplicity of their apps. But in China, Internet companies are trying to create a single app that can perform as many functions as possible.

Taobao shopping also lets people buy groceries, buy online game credits, find awesome deals, and scan coupons. Baidu allows users to order Uber, reserve hotels or tables, order food, buy movie tickets, and find nearby stores.

WeChat has also opened up for other companies and now lets them create apps within their app. Ebaoyang, a startup which lets people order oil changes through their smartphones, was almost fully reliant on WeChat for getting new business. Even today, they still rely on the app 20 percent for new customers and 50 percent for payments.

Between the fees for its service and the money it is making from online gaming, WeChat is now able to generate as much as $7 worth of revenue from every user per year. The app currently has around 700 million users which is more than the number of people that use smartphones in China. This is in part because a portion of its users are from outside China and also because some people may have multiple accounts.

Most of their revenue doesn’t come from ads, though, like in the US. Instead, it comes from spending on services, games, and goods sold through the app. These models might not be able to translate efficiently between markets, but they can certainly learn from each other. Now if America could just learn that going trillions into debt does not make you a stronger country.

China developed a number of innovative models which worked in different types of economies. Whether the people in Silicon Valley choose to admit this or not, the fact remains, China has had a significant impact on the way they think.

Photo credits: Pixabay

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