10.18.06
Technology Import vs Export
It seems that most of VCs are investing in China by “exporting” the successful US business model and technology innovation. I have not seen a lot of successes based on this strategy. Most of the US companies including major Internet heavyweight can not compete well with Chinese domestic vendors, ie. Google vs Baidu, or eBay vs Alibaba. Many failures are due to management and culture difference, others are because of scalability and business model required to win in the unique Chinese environment.
There is no doubt that China is a unique market and innovation is definitely there. One good example is mobility. China has the world’s largest number of mobile phone subscribers. The Wall Street Journal reported that China had 398.8 million wireless phone subscribers at the end of January 2006, more than the entire population of the United States. In fact, mobile users in China outnumber conventional “landline” users by about 38 million.
What that means is that if the mobile technology works in China, regardless if it is mobile gaming or mobile commerce, it probably has a solid scalable and reliable technology foundation. The same thing applies to online gaming such as MMOG technology. Even though Korea has the largest online gaming market (ie. cyworld), China is the fastest growing market according to IDC.
Why not take these technology, apply US business model and import it here? Some of the technologies such as ring tone or song recognition by humming have been utilized in China for a long time, yet, it is so “innovative” when it was introduced to the US market. I go back to China once and while and there are definitely a lot of opportunities there…
Some good discussion on Asian Technology Transfer « Asia Sage said,
October 29, 2006 at 1:32 am
[…] I am just starting, so this is relatively new for me… But I have been thinking on how to bring technology from Asia to the US. It is a puzzle to me that so many people would just invest in China given the high valuation. Anyway, I was reading another blogger today and he had a similar observation and I think his comments are very accurate […]