The sharing economy exploded in China this year, with companies for all kinds of shareable objects taking part in this new business model. While there are businesses familiar to Westerners—shared offices, cars and rides—there are also ideas that seem a little kooky, such as shared basketballs and umbrellas. Although some call it innovative, many realize these companies are just “rental 2.0” companies, assisted by digital technology. As the concept reaches fever pitch, however, it is also facing a reality check, especially as many firms, ballooned by venture capital funds, start to show signs of failing.
“China is not known for greenness, but it is moving in that direction,” says Christian Haessler, Head of Innovation for Covestro in the Asia-Pacific region. An offshoot of the German pharmaceuticals and life sciences giant Bayer, Covestro was spun off in 2015 and today produces advanced raw materials for like the environmental friendly coatings and lightweight materials to be used in electric vehicles. In this interview with CKGSB Knowledge, Haessler explains what Covestro’s business is like in China as a behind-the-scenes firm and how it, with material technology, supports China’s sustainable development.
NetEase is the Chinese internet pioneer you have probably never heard of. Founded in 1997, before its bigger and better-known Chinese internet peers Baidu, Alibaba and Tencent (collectively known as BAT), it is largely unknown outside of China. NetEase is currently making big pushes into many new businesses: e-commerce, online learning, music streaming and a host of other businesses, but it still has a long way to go to climb back to the top of the China tech tree. Analysts note that NetEase lacks the breadth of its rivals’ businesses, and that will likely stymie its growth, unless it can continue to diversify successfully.
Silicon Valley may hog the artificial intelligence (AI) limelight, but Chinese companies are catching up by implementing AI technologies in real life. According to a McKinsey Global Institute research report, China is one of the leading global hubs of AI development and its advantages include the vast population and a diverse industry mix that has the potential to generate huge volumes of the data needed to feed AI systems. That population not only provides an enormous market for AI-related products, but also, with the large number of internet users, about 731 million, China generates more data than most other countries—a key to AI innovation.
“Innovation” is difficult, yet the word itself is so overly used that the meaning of it has become hollow. Some people consider being “innovative” as being “lucky.” Yet for Clay Christensen, a business professor at Harvard, innovation is about finding the “jobs that need to be done” in our lives. In this interview with CKGSB Knowledge, he argues that companies should not take the task as akin to gambling. Instead, companies should adopt a more focused, process-oriented approach of finding the “jobs” that customers need to do in their lives, and then create products that make those jobs easier.
The rise of e-books and reading on digital devices has changed every part on the publishing production chain, affecting everyone from the editors, to the designers, to the marketing and sales people. Editors are spending more time on acquiring books and less time working on manuscripts. Designers become more flexible and strategic: they need to make sure a book won’t be ignored by skimmers who only glance at thumbnails on websites, and must ensure that texts are well-laid-out for reading on many kinds of mobile devices. But they’re not who need to change most. It’s the marketing and sales people who face an ever-more-challenging job.
In our increasingly fast-paced world, there is no room for companies to be complacent. To survive in the competitive marketplace long term, constant product innovation is a basic necessity. However, nearly three-quarters of new products either fall far short of their targets, or fail entirely. Not only that, businesses have become tolerant of this high failure rate to the point where it is treated as a given risk. But Georg Tacke, CEO of the global management and consulting firm Simon-Kucher & Partners, disagrees with this assumption and thinks the failing might be the result of a homegrown issue—from the initial design to end marketing.
Baidu, China’s largest internet search engine, is having a hard time after a college student named Wei Zexi died after mistaking an advertisement on Baidu for an experimental cancer treatment for medically reliable information. Baidu was then accused of being “unethical”, failing to clearly delineate paid advertisements from search results. Months later, the Nasdaq listed company reported its worst quarterly earnings. With the increased competition from domestic players like Tencent and Alibaba and the downward pressure on online advertising, which contributes to over 90% of Baidu’s revenue, it is crucial for Baidu to diversify its business.
China is keen to deploy self-driving cars for the same reasons as everyone else is: Autonomous vehicles may significantly improve traffic and environmental conditions. According to research figures, widespread adoption of automated vehicles could reduce automobiles on city streets by 60%, vehicle emissions by 80% and traffic accidents by 90%. While the West has superior technology, its governments lack the authority to swiftly implement massive infrastructure projects. Some experts believe Beijing’s top-down control capabilities could even give China an edge over the US and Europe in the race to develop self-driving cars.
One of the topics favored most by Chinese tech people is which city, or region, in China will become the next “Silicon Valley”. While observers have not gotten bored of guessing which one will be the next “unicorn” company, those who are really in startup companies have realized the fact that the China startup scene has peaked: many companies have died, using up the money given by investors but keeping no loyal users at all. Read our story about China’s startup bubbles and find how these bubbles, blown up by ambitious yet empty ideas, business plans and investors’ ignorance, finally fall and burst.