Everything Is Going Digital in China

The Chinese are a bunch of copy cats.

They’re not innovative. They don’t produce anything originally.

And in the last few weeks, this idea has picked up steam.

Beijing start-up Redcore, admitted to using Google Chrome technology to develop their own web browser.

While Redcore didn’t break any laws (I think), what makes this a big story was the words from the company.

Redcore said they had ‘broken the American monopoly’ with ‘original Chinese web browsers’. But as we’ve all found out, some parts of Redcore are far less original than others.

What makes this story even bigger is the recent attention Redcore has gotten from investors.

The Chinese web browser raised US$36 million from investors. Many of whom I’d imagine were excited about the idea of an ‘original Chinese web browser’.

They too were misled.

But unlike how the media portrays Redcore, China would benefit from a whole lot more start-ups like them.

Let me explain why…

Is building something from scratch better?

Sure, Redcore made some outlandish claims. I’d assume it was to draw as much funding as possible. The company is sorry for that.

However what they’re not sorry for, I would think, is using some Google Chrome code. Nor should they be.

When you want to build something, do you always start from scratch? Even the most innovative ideas are not completely original.

Many of the great men and women of history stand on the shoulders of giants. They all benefited from the progress that took place before them.

If everyone had to start from zero all the time, we’d get nowhere fast.

And this is exactly what Redcore founder, Chen Benfeng said in an interview:

We don’t deny building on Chrome’s browser engine. The web browser is a very old technology, writing the code from scratch will take many years.

It’s like Android was built on the foundation of Linux, but nobody doubts Android or Google’s innovation. Google and Apple also did not write the first line of code, doing so would be reinventing the wheel.

OK, so they didn’t come up with every single line of code by themselves. They took what already worked and applied it to their model.

Essentially, people are angry at the company for being smart and efficient.

To use another example, it would be like if you adopted the investment principles of Warren Buffett, and were then criticised for not coming up with those principles yourself.

Yet with Redcore, China bears now have more fodder to play down China’s tech strength.

However I’d encourage many of these bears to spend a night out in China’s major cities. After just one night, it’s easy to see how digitally savvy this nation is.

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China’s digital nightlife

As soon as night falls, China is eager to shop.

I experienced this first hand on a trip to China years ago. In my short stay I was always fascinated about how many more people were out at night than during the day.

My father, brother and I had to push back our dinner to about 10pm. No restaurant was serving food before that time.

I haven’t been back since. But according to South China Morning Post (SCMP) the only change to China’s nightlife is that it’s become more digital.

Across the country online orders for supper start coming in at 9pm. Beijingers’ favourites are fried chicken and barbecued sticks of meat. Down south in Chengdu, people spend the most on supper, gathering around tables for hotpot, their evening meal of choice. The city of Hangzhou prefers drinks to eats, with its highest sales of alcohol at night.

A new report by Alibaba Group Holding analysing data across its ecosystem of services, including payments service Alipay, food delivery and on-demand units Koubei and Ele.me, as well as video-streaming site Youku and even ticket sales platform Taopiaopiao, provides fresh insights into Chinese consumers’ shopping and eating habits that kick in once the sun sets. Alibaba is the parent company of the South China Morning Post.

In many respects, China is far more digital than the West. Their ecommerce industry is just as big, and potentially more important.

Their digital payments ecosystem is utterly massive. Chinese lives revolve around smartphones and apps.

Make no mistake; they’re winning in the race to develop a truly digital economy. SCMP continues:

Thanks to mobile payment platforms like Alipay and WeChat Pay, Chinese consumers can place a food order, shop online, even pay bills via several taps on their smartphone screens – no matter what time it is.

The peak hour for online shopping on Alibaba’s e-commerce platform Taobao is 10pm, whereas online payments peak at 11pm, according to the report dubbed “China’s Nightlife”.

‘…The average fare of rides booked via ride-hailing apps at night is 28 yuan (US$4). Most of China is asleep by 4am, when payment activity finally slows.

Still think China’s weak when it comes to tech?

Your friend,

Harje Ronngard,
Editor, Money Morning

PS: Silicon Valley is losing ground to this hot new competitor — and you could potentially profit with this concise guide. Read the free report now.

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