FORGET Bitcoin Already!

[Randy W]

from World Economic Forum

 

42% of global e-commerce is happening in China. Here's why

 

One explanation for China’s dominance is the explosion in use of mobile payments, which soared from 25% of mobile internet users in 2013 to 68% in 2016. In total, 731 million of China’s 1.4 billion citizens use the internet.

Consumption-related mobile payments totalled $790 billion in 2016 – 11 times that of the United States, which boasts 262 million mobile internet users, the report shows.

What’s more, one-third (34) of the world’s 262 privately held startups valued at over $1 billion – otherwise known as ‘unicorns’ – are Chinese, commanding 43% of the global value of these businesses.

China’s venture capital industry has also swelled in recent years, from $12 billion between 2011 and 2013, to $77 billion – or 19% of the global total – between 2014 and 2016.

According to the report, the majority of venture capital investment is in digital technologies such as big data and artificial intelligence (AI), and fintech companies. Of this investment, 42% has come from three of China’s internet giants: Baidu, Alibaba and Tencent.

In addition, Baidu, Alibaba and Tencent have struck 35 international deals during the last two years, which compares to 20 made by the top three internet companies in the United States.

 

 

 

 

Six solutions for businesses

 

Based on its experience working with multinational companies, McKinsey suggests six approaches that businesses in China should prioritize as the country digitizes:

 

1. “Adopt bold strategies” includes companies making preparations to disrupt their own business models in order to grow their customer base.

2. “Use the power of China’s vast digital ecosystem” urges companies to consider how best to collaborate with large digital platforms and China’s internet giants.

3. “Maximize value from analytics by using China’s data pools” includes establishing the business imperative for gathering and analyzing data, leading to a competitive advantage for companies.

4. “Build an agile organization for digital transformation” means making companies less hierarchical, instead organizing companies into smaller teams.

5. “Digitize operations based on a solid transformation program” because digital technologies are rapidly transforming the economy, meaning many Chinese businesses are unprepared.

6. “Engage with China’s policy and regulation” as the government has made it clear that digitization of the economy is a major priority.

 

If these priorities are met, the report says China could lead broader debates on global governance issues such as barriers to foreign competition, reciprocity and digital sovereignty in the coming years.

 

 

 

 

I think I'd be a little wary of some of these, especially # 6