Boston Consulting Group (BCG), in partnership with the research divisions of Alibaba, Baidu and Didi, put out a report (in Chinese) last week detailing just how much faster Chinese tech giants have grown in comparison to US counterparts.
It’s no comparison.
The total number of online users in China has already reached the 710 million mark, more than the total for India and the US combined.
With that massive scale advantage, as Technode reports citing the BCG report, Chinese unicorns take an average of four years to reach the US$1 billion valuation status, while those in America take seven. The percentage that reached the mark in two years was almost 50%, versus 9% in the US.
The Chinese tech giants’ market penetration in the areas of E-commerce, mobile payments, messaging apps, ride hailing and streaming videos is also no comparison. A US firm has reached 50% of market penetration in only one of those areas, E-commerce. And Amazon is facing a political backlash that will likely see antitrust action taken at some point in the future.
No such ill political winds seem to be blowing in China, where Alibaba’s Taobao reached 50% market penetration in 9 years, versus the 14 years it took Amazon. Alibaba’s total retail e-commerce transactions reached US$248 billion in 2013, larger than the combined total of eBay and Amazon.
WeChat, Alipay, Didi and iQiyi have all found ways to dominate their respective markets in ways that WhatsApp, Apple Pay, Uber, and Netflix have not managed. And below the top tier, there is still competition lurking from thousands of Chinese internet startups in niche markets.