Keynote address by William Bao Bean, General Partner at SOSV Managing Director at China Accelerator and Founder of MOX

Kicked off in the second day at Techsauce Global Summit 2019 was a keynote address by William Bao Bean, who for more than a decade was one of the prominent figures within Tech investment scene in Asia. Presently, he is a General Partner at SOSV and a Managing Director at Chinaacceleator and MOX, China’s first startup accelerator based in Shanghai. Amidst the heated US-China trade-war along with an on-going rise of China prowess in technology and innovation, he has come to answer on today’s most preeminent question; Will China Take Over the World?

Throughout his keynote, the central idea he addressed revolved around a major shift in power toward digital landscape within Asian region, with China being the leading player.

Predominating Force in World’s Digital Economy 

As China’s economy being ranked the 2^ndlargest in the world, following USA’s by a several margin. Its exponential growth over the decade is no incident, according to Mr. William Bao Bean, having pointed that the internet is China major economic driver.

Traced back in 2004 in one of his research, the total market cap of all the internet companies in China was only $3 billion, but now the market has surpassed over $2 trillion. Not only that, among the list of top 20 global internet companies, half of them are Chinese companies that focus in the Chinese market.

In terms of VC market, following figures of venture capital investment in 2018, the US poured about $80 billion, while China putted in a roughly estimate of $60 billion. This make China’s venture capital the second largest VC market in the world (about 2-5 times of Europe combined), being relatively close to the US. Moreover, with recent trade-war since last year, China withdrawal of $3 billion worth of investment toward Silicon Valley should further contribute to the domestic growth of its market.

China Ahead in Social, Fintech, And Blockchain 

China is significantly ahead in the global scene when it comes in Social media, Fintech and Blockchain. Firstly, in Social, Mr. Bao Bean mentioned how WeChat is leading ahead of Facebook in features and product roadmap, quoting

“If you look at the Facebook product roadmap and the features launch for the last 3 years, it looks like a giant WeChat clone”

Secondly in Fintech. China prior lack of banking infrastructure has given its edge Fintech growth, with US is leapfrogging after China when it comes to Global wallet in E-Banking. The annual usage of mobile wallet in US is also roughly 20 times smaller than China, being sized at $50 billion apposed to China’s $12.5 trillion. And, thirdly in Blockchain, he referred to how Beijing courts are now utilizing Blockchain to track and handle case files.

Also, while China has traditionally been behind the US when it comes to advertising, enterprises, software and SAS, it’s is gradually improving. It will soon be able to catch up to US through various contributions from its growing 800 million internet users (whom are mostly mobile users only), advancement to mobile advertisement, and domestic companies that have ditched 3^rdparty software in their infrastructure.

Chinese Tech Giant in India and Southeast Asia

Regarding China rising global presences in Tech, its domestic scene is also as competitive as ever, with Tencent, Alibaba, and Xiaomi deadlocked in battles. Mr. Bao Bean pointed toward Tencent as a domineering force as a digital powerhouse, cited to its 16% year on year growth with $400 billion in revenue. He stated, the fact that Tencent triumphed over customer acquisition cost (which is the biggest hurdles every internet company faces) through its “Super App” WeChat, makes it unstoppable in adding more internet services to its 1 billion users. This put other Tech giants like Alibaba, Xiaomi, Huawei, and Vivo in a difficult position, forcing them to shift their focus to software and hardware market in Southeast Asia and India.

He specifically gives the case of India, where local players hold 50% shares smartphone and software market, but now only hold 4% of the competitions since players like Xiaomi, Huawei, and Vivo entered its market. He further illustrated that in India Appstore, over 44^thranking application are Chinese, a huge contrast from being a handful back in 2016. Along the way, he also pointed that India and Indonesia market are heavily competed through proxy battles between the US and China.

As China drive their expansion in Southeast Asia regions, they brought in not only financial investment but also various innovations from e-commerce, logistics, health, media, to machine learning. In this on-going process, he advised the opportunities every startup should look for is to align themselves with the major players; to be aware them and to align themselves accordingly as local economy will only get smaller. He suggested that while it is great to maintain autonomy, it is most important for startups to address the shift in Southeast Asia and India market to survive.