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Why the ‘silent’ Chinese innovators will have a bigger impact in the West than the famous ‘BAT’ Guest Blogger Pascal Coppens - December 12, 2017

China Jack Ma

BATs are nocturnal animals - we should stop putting them in the spotlight

Whenever a positive story about China is written, chances are it discusses BAT (Baidu, Alibaba, Tencent). They became the true leaders in the digital revolution in China, and often ahead of western competitors like Facebook, Amazon or Google. Today they are portrayed as Internet Gods we should fear, and take notice of their global ambitions.

"I believe we are giving these giants too much credit, and at the same time neglect the many other Chinese companies that are much more likely to make it in the West."

What we know about BAT is correct: Alibaba is really handling more transactions than e-bay and Amazon combined and is slowly replacing the Chinese banks and insurance companies. Tencent did make it to the 5 most valuable global companies list, and WeChat has become the de-facto social media platform of every Chinese. Baidu, the internet search giant, is indeed burning billions of cash planning to become the leader of A.I., VR/AR, and online-to-offline (O2O) services.

Want to know more about how the Chinese are out-innovating us?

The story we talk less about is how they are different from business in the West and what the implications are.

For one, Western internet companies prefer to focus on a few core competences, while Chinese counterparts are trying to do everything that can make money, from cloud computing, to e-commerce, social, entertainment, O2O, transport, gaming, mobility, financial, delivery, travel, health, ...

Secondly, dominant Chinese companies seek to build monopolies, and kill or absorb every competitor that comes along. It’s not pretty. The BAT trio is fighting bloody turf wars among each other, while smaller ones are kind of forced to sell out or prepare to die. Most scale-ups see the only exit for their company selling to BAT.

Thirdly, BAT’s success is all about speed and fast growth. The pressure is extreme. Everyone in the industry in China knows the stories of how Tencent’s internal departments are competing each other to death. That Baidu’s sales people are all but customer-friendly to convince you to spend more money on their site or how Alibaba is forcing any Chinese logistic companies to join its cainiao platform and share all their data. It’s the power of the mighty, and unlike what we are told, not always driven by innovation as much as it is by pure competition.

"My point is that the BATs Western domination may be more difficult than expected."

Their modus operandi is not very Western market friendly, and as such their expansion strategy now is going more into regions like South-East Asia or Africa, where the market conditions are more alike to make even more money quickly.

Instead of putting the entire spotlight on BAT, we should focus our attention on the many amazing Chinese companies that are likely to be making a real impact on our Western lives in the years to come.

Let’s discuss the other Chinese giants that have amazing stories, such as JingDong, Meituan, Ctrip, 360Qihoo, NetEase, DJI or VIPshop. Let’s talk more about the fast growing scale-ups like Mobike, Tujia, iCarbonX, Megvii or DeepGlint who are changing the meaning of growth with new business models and leading edge innovations.

Most importantly we should not forget to mention the well-funded start-ups that are poised to disrupt Western markets soon. Chinese companies like musical.ly, Strikingly and Castbox who are building from the West for the West first. These are the companies “Created by China, made in the West”.

It’s time we realize that BAT prefers to stay out of the spotlight, afraid of their competitor learning their strategy, whilst hundreds of other amazing Chinese scale-ups are more than happy to get global attention.

Pascal Coppens will be guiding our Day After Tomorrow Tour in China.

Pascal Coppens
Guest Blogger Pascal Coppens

Pascals purpose in life is to guide as many people as possible in achieving their true potential, including himself. He aims to help transcend cultural barriers that limit...

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