The US bias and Asian innovations
+8* China QQ ThoughtsPublished March 3, 2008 at 4:29 pm 2 CommentsNote: this article has been published in Chinese in “Asian Business Leaders” magazine in March 2008.
When talking about Internet or mobile in China, we often hear about the “Copy-to-China” or “C2C” phenomenon. Looking at China and other leading Internet countries in Asia, especially South Korea and Japan, there seems to be a persistent bias in the way the West sees Asia, and even in the way Asia sees itself. But Asia is turning into a little-noticed innovation powerhouse.
The bias
The bias, inherited from the US economic and cultural dominance is that:
- · Everything from the US is great.
- · Everything from Asia is weird (and sometimes funny).
But is it realistic to think that Japan and Korea, the two countries with the highest Internet and mobile literacy and the world’s greatest Internet infrastructure (according to a recent OECD ranking), had come up with no innovation at all?
Is it possible that China, a country with so many entrepreneurs, venture capital money and so low labor costs had no new service or business model?
Global innovation?
Looking at how independent Asian markets are, it looks as if all look at the US, but not at their closest neighbors, and that the US looks at… no one.
You can test your own Asian Internet culture by looking at the popular Alexa.com ranking of websites in three key markets.
|
Rank |
China |
Japan |
Korea |
|
1 |
Baidu |
Yahoo Japan |
Naver |
|
2 |
|
FC2 |
Yahoo |
|
3 |
Sina |
Google Japan |
Daum |
|
4 |
Google.cn |
Youtube |
Cyworld |
|
5 |
Taobao |
Mixi |
YouTube |
|
6 |
163.com |
Nicovideo |
|
|
7 |
|
Rakuten |
Nate |
|
8 |
6.cn |
Livedoor |
Empas |
|
9 |
U9 |
Wikipedia |
KTdom |
|
10 |
Sohu |
|
Google Korea |
Source: Alexa.com, January 2008
The QQ case
One interesting case to consider in China is QQ. Arguably China’s Internet shining star, it is virtually unknown abroad.
A quick look at key figures should be enough to tell that something special is going on with QQ:
- · It has over 270 million registered accounts, more than MSN in China.
- · Its revenues in 2007 are expected to clear the 400 million USD mark, which is much higher than those of the 2007 media darling, Facebook.
What has Tencent done right? What can be learned from it? The technology or design involved do not seem advanced, so where is the innovation? The main differences between QQ and other social networks or IM services are under the hood:
· Though it arguably did not invent any of its core components, QQ innovated in the way it combined them in a unique and sticky way: IM + Avatars + blogs.
· QQ understood that to serve its users better, it had to consider them as clients. Most Internet services only get revenues from advertising, so their main clients are… advertisers. And the next logical step is to turn users into mere eyeballs and try to waste more and more of their time.
· To monetize its services, QQ introduced a virtual currency (Q Bi) and a large number of payment methods (from prepaid cards to mobile or bank cards) which made it easier for users to pay.
In addition, QQ has been very active at introducing new services as soon as they see a new trend emerging in other Internet sites. Not necessarily a first-mover, but certainly effective when combined with their massive user base!
QQ is a case that foreign companies could learn from, especially its system innovation rather than technical innovation. As technology becomes a commodity on the Internet, execution and trend reading are keys. In China, it is a matter of survival as things move fast.
Learning from Asia
If QQ is the most visible Chinese success, lost in a sea of copycats are also genuine innovations. Among them services like iNezha, Xunlei, Maxthon, EditGrid or Zcom are examples foreign countries could learn from. And China should probably look at its neighbors, Japan and Korea, to find the next round of inspiration!
[...] Citizen Media Watch wrote an interesting post today on The US bias and Asian innovationsHere’s a quick excerptIts revenues in 2007 are expected to clear the 400 million USD mark, which is much higher than those of the 2007 media darling, Facebook. [...]
[...] Prylfeber wrote an interesting post today on The US bias and Asian innovationsHere’s a quick excerptIts revenues in 2007 are expected to clear the 400 million USD mark, which is much higher than those of the 2007 media darling, Facebook. [...]