Should we stop calling Didi Chuxing ‘China’s Uber’?

One of the biggest trends in 2019 is the rise of the ‘copy-from-China’ approach by western firms.

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Should we stop calling Didi Chuxing ‘China’s Uber’?

This article was written by Chua Kong Ho and first appeared on The South China Morning Post.

  • China is executing new ideas in the broader digital economy, which in turn are being ‘translated’ westwards
  • One of the biggest trends in 2019 is the rise of the ‘copy-from-China’ approach by western firms

I stood on stage on Wednesday at the RISE conference in Hong Kong with Abacus editor Ravi Hiranand and Proof of Capital managing partner Edith Yeung to present the 2019 China Internet Report, a comprehensive 100-plus-page document painstakingly put together by a crack team at the South China Morning Post.

During the course of the presentation, I observed that in writing headlines for our stories, we sometimes fall back to describing a Chinese start-up as “China’s (something)”, that “something” usually being a globally known US company.

So it was popular to refer to the raft of Chinese electric-vehicle start-ups that sprouted in the past few years as “China’s Tesla challenger”. We were not alone. Many newsrooms justify this as the only way that global audiences would understand or care to read the story. And in this age of SEO analytics, there are numbers to actually prove this.In that same vein, there was the use of “China’s Uber” to describe Didi Chuxing. That became increasingly problematic after the latter forced the former to retreat after a subsidy-fuelled bare-knuckle fight. How can you justify this is China’s version of a US business when the American company lost, albeit in a foreign market?

There is also “China’s Airbnb”, “China’s Twitter” and “China’s Twitch”, so the list goes on. There are primarily two reasons for this.

First, while US tech giants such as Google, Facebook and Amazon.com dominate in most markets across the globe, they could not quite crack China. There is the Great China Firewall, of course, which the country justifies as cyber sovereignty or the right to regulate its internet the way it sees fit, resulting in many popular Western apps being blocked. That gave space for a crop of Chinese internet companies to grow, the most famous of which are the triumvirate known as BAT – Baidu, Alibaba Group Holding (owner of the Post) and Tencent Holdings – while the next generation included Toutiao (owned by ByteDance), Meituan Dianping and Didi, the so-called TMD.

These Chinese companies did not just grow because there was no competition from Western firms. Talk to any company founder, executive or venture capitalist who knows China, and they would tell you that competition is stiff – in many cases, stiffer than in Silicon Valley.

Meituan may now have a market value of almost US$50 billion, but it achieved this only by defeating thousands of other group-buying apps operators. In this competitive cauldron, the winner needs to be the best in product, technology, operations, execution, fundraising and at attracting talent.This fearsome competition gave rise to the robust work ethic known as “996” (9am to 9pm, six days a week) that has come under fire recently, as venture capital funding slowed, billion-dollar fundraising rounds became rarer and the road to an initial public offering consequently getting bumpier.

When you are competing with hundreds, if not thousands of other firms in the same space, execution and speed-to-market become paramount. A good idea properly executed is worth more than a great idea on the shelf. In this environment, work-life “balance” quickly goes out of the window.

The other reason Chinese technology companies need the “China’s xx” tag also reflect how the “copy-to-China” approach was rampant about 10 to 15 years ago, or as Jenny Lee of GGV Capital calls it, the “translate-to-China” model.

But that is changing, and China is successfully executing new ideas in social media and the broader digital economy, which in turn are being “translated” westwards by the likes of Facebook, YouTube and Instagram. The short-video format was not invented in China, but it found acceptance and massive popularity there, driven in part by the country’s hundreds of millions of rural internet users. The use of live-streaming for online commerce was also popularised in China. There is, of course, the popular example of the “super app” that serves to cater to a consumer’s many different needs and wants within one app, which China pioneered. So-called “platform companies” have since sprouted in Southeast Asia and elsewhere.

Indeed, internet historians in the future may well point to the April 30 The Economist headline “Mark Zuckerberg wants to build WeChat for the West” as a turning point.

All of which brings us back to the China Internet Report, in which we venture that one of the biggest trends in 2019 is the rise of “copy-from-China”. With the world’s biggest online population and lots of “pain points” to solve, China’s internet users are driving innovation in everything from the super app to “pay-for-praise” chat groups.And if it worked in China, should global companies not at least try and “translate” some tips from the playbook? After all, being called “America’s [insert Chinese tech giant]” is probably a small price to pay for success.

The 2019 China Internet Report is available for download at www.scmp.com/china-internet-report.