How Chinese companies organize themselves for speed and fluidity

Diversification is the new focus

And if you realize that your employees and your network are the only core of your company, then you’ll be able to treat the market as your playing field and experiment on many side-tracks. Small bets, but in big quantities, that’s how Chinese entrepreneurs roll. 

It’s why Tencent is just as much an investment company, as it’s a “leading provider of Internet value added services”. According to IT Juzi, Tencent has invested over 422 billion yuan in over 350 companies since 2012: amongst which Nio, Kindred AI, Mobike, Didi, iCarbonX Zhihu and many (many (many)) more. (Considering the undisclosed deals, the actual investment amount is much higher.) Ctrip too, is not your classical travel company, but rather an ecosystem that offers, hotel rooms, transportation, insurance, visa services, etc. The same goes for Alibaba's platforms which are powered by millions and millions of small business people who sell who couldn’t do business any other way in China. 

In China, diversification is the new focus.

“We’re a data company”

That’s why a lot of companies don’t present themselves as sellers of atoms, or even services in China, but rather as data companies. We heard this time and time again during our visits. ICarbonX’s chief scientist Yingrui Li told us they weren’t a technology company nor a health company. Their business clearly consisted of data, that would let them become the world’s biggest analytical engine behind the entire health industry. One that would allow them to build a model for human health. Jingwei Kang, CEO of IngDan, China’s supply chain-based open IoT ecosystem claimed something very similar: he said that the data was the most important foundation of their ecosystem as it was what allowed them to know and understand its participants so that they could find and attract new ones. “We don’t sell the data”, he told us, “but embed it into our own business.” It’s a smart move, if you realize that when the blockchain - the new decentralized internet - will be adopted en masse, the companies will no longer “own” the data of the users and therefore not be able to monetize it.

Pascal Coppens also told us that there was a huge battle going on between Alibaba and Tencent in the retail market, because they realize that you need data to be able to personalize your products and if you don’t do the latter, you lose customers. Plus, data is also the fuel of Artificial Intelligence. If you want your AI to be smart, you need heaps of data. And seeing that China has set itself the goal to become world leader in AI by 2030, companies are gathering its most basic building blocks – the data – a we speak. They know that if they aren’t data companies when the era of AI arrives, they won’t survive.

The market, not the technology

Amidst this volatility, it should not come as a surprise that the Chinese value the market rather than the products, business plans or the technology. Especially seeing that the latter has no fixed value and a very fleeting shelf life. Over here, we think in terms of products, services and technology and how to sell that to the market, while the Chinese tend to start with market innovation, rather than product innovation: it’s a lot easier to find a product for a market, than to create a market for a new product. 

This is a huge opportunity for us over here, actually, seeing that a lot of Chinese companies are very interested in the European market and actively on the look-out for companies to partner with over here.