Author: Johnatan Zamora – Data Scientist
When we start a conversation about technology and innovation, we usually consider countries like the United States, Germany, or the United Kingdom as powerhouses in the field. Rarely do we think of countries beyond America or Europe, such as India or China, as leaders in technology and innovation. One hypothetical reason for this thinking might be rooted in the distance and limited information we have about these countries, coupled with the frequent exposure to technology and innovation initiatives from the United States and Europe.
Recently, I decided to pursue my master’s degree in Inteligencia Artificial outside Colombia (my country) and chose China as my destination for studies. This country has progressively become a global economic beast, and much of this progress has been driven by technology and innovation from local companies. This caught my attention because significant names in the technology industry, like Instagram, Meta, WhatsApp, and Amazon, are unknown or less popular within China’s industry.
This doesn’t mean that these services don’t exist within Chinese society; on the opposite, they do exist, but in their “Chinese versions”, built by local technology companies that maybe we don’t know in America or Europe, but that are giants companies with their own local market. Today, I would like to introduce you to five Chinese technology companies revolutionising the industry in China and beyond.
Some history
The global economy is defined as the set of national economies and non-state organisations within each nation that are linked by international economic relations with other nations or non-governmental organisations. The global economy is one of the foundations of our modern world.
Since more than 200 years ago, when the Industrial Revolution took place and gave way to the construction of factories and mass production, a model was introduced in which goods and services produced in a country can be marketed to other countries. Mining, oil, port and other companies started to be born.
In the middle of the 20th century, with the rise of integrated circuits, the first technology companies emerged, focused on building computers and other technological devices for businesses and homes; this happened in countries that were powers of that time, such as the United States, Germany and Japan.
Entering the 21st century and at the gates of a technological revolution led by Artificial Intelligence, new technology companies emerged. Names such as Amazon, Microsoft, Google, and Tesla become significant players in the global technology landscape.
All these companies have in common the investment in innovation and original ideas aimed at exploiting the latest technological advances. These differentiators have influenced them to become the most successful and innovative technology companies in the world so far.
China joins the game
Over the years, China has slowly become a technological powerhouse and could be the only competition for the dominant tech companies.
The economic evolution of the country, which in less than forty years has transformed its agriculture-based economy into one dominated by industrial production and infrastructure, has had the positive side effects of increased investment in technology and innovation.
This is reflected in the business evolution that happened in the last decades, where the major players in the local economy are characterised by belonging to the technology sector.
Big Technology Companies
Below, we can see the most representative technology companies within the Chinese landscape.
Alibaba Group
Alibaba Group is a multinational company dedicated to e-commerce, retail, and technology. It is one of China’s oldest and most significant technology companies, providing B2B, B2C, and C2C services inside and outside China. Additionally, it offers cloud services within the country, competing with external cloud services such as Amazon AWS or Microsoft Azure.
Currently, its businesses are divided into six main groups:
- Cloud Intelligence: Focused on its entire cloud business and projects involving Artificial Intelligence.
- Taobao and Tmall: Similar to what Amazon is in America and Europe, but focused on the Chinese market
- Local Services: Manages financial businesses within China. The most famous example is Ant Financial Services, a fintech services group that resembles the functions of a bank but is not one. Among these services are loans, insurance, and credit cards, among the most relevant. This branch also operates one of the country’s two major electronic payment gateways, Alipay.
- Cainiao Smart Logistics Network: Handles all the business of Cainiao, the country’s largest and most important logistics company.
- Alibaba International Digital Commerce: Manages everything related to digital commerce outside China. Alibaba has an international presence, with services gradually gaining popularity outside of China, such as AliExpress, an e-commerce platform similar to eBay that has become very popular in Europe and America in recent years.
- Digital Media Entertainment: It is the most recent branch of the multinational, oriented towards exploring businesses such as content creation, events, and online distribution of audiovisual content.
TENCENT
Tencent is another company that laid the foundation for China’s technological advance. It is widely recognised for owning the country’s most commonly used messaging apps, such as QQ y WeChat. The latter is considered a ‘super app’ because, in addition to being a communication application, it also integrates a payment gateway that competes with Alipay. WeChat also allows interaction with third-party applications known as ‘mini-programs.’ We could describe it as a WhatsApp with extended features.
Tencent excels in the field of social media and video games. In the gaming sector, it owns game development studios like Riot Games, the studio responsible for League of Legends, one of today’s most popular video games. Tencent also owns the majority of Epic Games, a game development studio known for its significant titles and for being the primary developer of the Unreal Engine, a game development engine widely used by developers due to its features and affordability.
Within China, Tencent competes with Alipay in the retail sector through JD (Jing Dong), another popular e-commerce application. Additionally, Tencent is involved in other sectors, including finance, where it owns WeBank, a neobank operating entirely online.
BAIDU
Again, a well-established Chinese technological multinational company has internet-related businesses and Inteligencia Artificial services as its primary niche. In a very superficial comparison, we could describe it as the Chinese Google because its search engine, Baidu, is the most used in China, just like its location service Baidu Maps. Like the American company, Baidu offers cloud storage, an online encyclopedia, translation, video, and music services.
In the Inteligencia Artificial field, Baidu has made significant efforts for industry development. Its most prominent contribution is its deep learning framework, PaddlePaddle (Parallel Distributed Deep Learning). This framework could be compared to PyTorch or TensorFlow but is more industry-oriented. It includes toolkits that make it easier for people with less experience in the field to approach IA.
Lastly, in recent years, Baidu has focused on perfecting its autopilot functionality to offer intelligent vehicles in the future.
ByteDance
Focused on the technological services sector, this company owns one of the most popular and controversial applications of recent times due to its problems with privacy and content. We’re talking about TikTok for the international audience and Douyin for the Chinese public. Moreover, within the Asian country, it also owns Toutiao, an intelligent search engine that competes directly with Baidu. Additionally, it has game development studios that might be lessy well-known in America or Europe but have a substantial player base in Southeast Asia.
Meituan
This last company is built on a local shopping platform that offers products and services such as entertainment recommendations, restaurants, and places, as well as coupons and promotions for establishments. It could be described as a hybrid between TripAdvisor, Groupon, and Deliveroo.
In recent years, Meituan efforts in Inteligencia Artificial can be seen in collaborations with Intel to optimise TensorFlow, allowing them to enhance the distributed training of their recommendation systems. Additionally, they have acquired various Chinese startups focused on Generative Artificial Intelligence and Large Language Models (LLM) development.
To Conclude…
Due to the limited information we have about the Asian giant, we still perceive China merely as the world’s factory and a country that stands out economically due to its manufacturing industry and low-cost labour.
However, this perspective has been changing over the past few decades. While it’s true that a significant part of China’s economy groups around goods production, the service sector has experienced a meteoric rise propelled by state investments in technology and contributions from major private corporations. Automation y Inteligencia Artificial have become main protagonists in recent years.
The Chinese industry is investing in intelligent solutions that stand out and break the mould, such as the focus on autonomous vehicles with specific functions (Smart Deliveries) or collaborations like the one between JDI (the world’s leading electric car and battery manufacturer) and Tencent to enhance their autopilot systems.
Indeed, in the coming years, it won’t be surprising to hear about technological advancements from the Asian giant, which is increasingly approaching the level of Western technology companies.
References
https://www.aspi.org.au/report/mapping-more-chinas-tech-giantshttps://www.fungyuco.com/blog/china-top5-techcom/
https://www.forbes.com/sites/forbeschina/2019/07/07/2019-forbes-china-50-most-innovative-companies-full-list/?sh=4af7098b2837
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Johnatan Zamora – Data Scientist
