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Will China's internet giants conquer the world?


You could say last year was a good year for China’s internet titans. E-commerce behemoths Alibaba and JD.com notched a record US$139 billion in sales on Single’s Day, the world’s largest shopping event. Social media phenomenon TikTok, owned by Beijing-based ByteDance, was the world’s most downloaded app, overtaking previous favourite WhatsApp. Tencent, the biggest social networking and gaming company in China, reported a 16 percent year-on-year rise in revenue, to 560 billion yuan.


Behind the glittering numbers, however, dark clouds loom. The Chinese domestic market is slowing amid Beijing’s zero-Covid policy and frosty relations with the United States. The government’s crackdown on the tech sector may have eased, but tighter regulation appears here to stay. Despite the tough environment, Chinese internet firms have their sight set on going global. From e-commerce (Alibaba and Pinduoduo) to social media (ByteDance) and fashion retailing (Shein), Chinese players are planting stakes around the world and shaking up more established rivals in the process.


Fast fashion retailer Shein, for example, was valued at US$100 billion in a funding round in April, more than H&M and Zara combined. Founded only ten years ago, Shein now sells in 150 countries including the US, where it is the dominant fast fashion player.


How did China’s tech firms get to where they are today? What are their competitive advantages? What are their global ambitions and can they achieve them? What lessons can companies, entrepreneurs and executives draw? How should they respond? These are the questions various audiences and clients have asked us.


We answer these questions, and more, in our new book, Seeing the Unseen: Behind Chinese Tech Giants' Global Venturing. It combines insights from our research and expertise, as well as more than 300 hours of interviews with investors, entrepreneurs and executives with intimate knowledge of Chinese internet companies’ global ventures. In this article, and another one to be published in the weeks to come, we share snippets from the book that outline the key factors behind the phenomenon and the takeaways.



Beyond the “996” culture

Alibaba’s rise has long been the stuff of legend. In just 15 years, the company went from a scruffy B2B online marketplace to launching the largest IPO in history at the time, claiming the scalps of Amazon and eBay in China along the way. You would have heard of Alibaba’s notorious “996” culture – working from 9am-9pm six days a week. Then there’s the tale of how founder Jack Ma persuaded Japanese investor Masayoshi Son to invest US$20 million in his then-unknown company by being “a little crazy”. But the success of one of the world’s largest companies and valuable brands, as well as that of its contemporaries, is much more complicated than that.


We are all shaped by the environment and circumstances we live in. For China’s internet giants, success was forged in the breakneck changes that the country experienced in the space of a generation. The razing of large swathes of Chinese cities in the early 2000s to make way for high-rise apartments and planned communities, the construction of transport and telecommunication networks and the penetration of mobile phones paved the way for e-commerce, food delivery, new retail and many other business models. A national market in which tech entrepreneurship could scale quickly was born.


Read More at https://www.forbesindia.com/article/insead/will-chinas-internet-giants-conquer-the-world/80477/1

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