Talk to anyone in any industry and they’ll inevitably voice their belief about “how important the Chinese market is.” While it’s certainly a general, blanket statement, which illustrates the belief that the 1.3 billion people living there will one day have all the amenities the rest of the world does, so too does it illuminate the rise in popularity of homegrown brands already there.
Bloomberg recently explored the top brands in China. Not surprisingly, huge companies like Apple, Microsoft, Intel, IKEA, Nike, and BMW all make appearances on their top 50 list. But amongst the top 10, many of the most popular are Chinese intellectual property which indicates less of a reliance on the global sphere.
With hundreds of millions of users across a vast network that combines commerce, connectivity, and more, here’s what you need to know about the top brands in China.
As the name suggests, Alipay is a way to pay for goods and services online that is used by 622 million users — which is nearly half of the population — and represents more than half of the country’s $15.5 trillion payments market.
So what makes Alipay the most preferred brand in China, and why do users opt for it in 70 different countries besides China?
Founded in 2004 by online shopping retailer, Alibaba, Alipay in its earliest iteration was akin to how American audiences have used PayPal. As Alibaba chairman, Jack Ma, told 60 Minutes back in 2014, “the buyer doesn’t trust the seller, and the seller doesn’t trust the buyer.” At that time, Alipay had 900 million registered accounts and was an extension of the Alibaba eco-system in which transactions were occurring online. In 2013, Alipay made $150 billion in revenue. In contrast, PayPal generated a total revenue of $7.9 billion a year later.
Alipay was one of the first financial services to recognize that it should be integrated into daily life rather than just the rare occasion when you purchased something on eBay. This meant being able to split the check with friends at dinner, paying utility bills, or buying things at local shops. Essentially, Jack Ma recognized a cash-less future before anyone else. As a result, China saw its mobile payments reach $9 trillion in 2016, while the U.S. was only at $112 billion.
Whereas cash seemingly continues to be king around the world, Alipay proves that Chinese consumers prefer a digital wallet.
Released in 2011 by Alibaba competitor, Tencent, WeChat is China’s biggest messaging app — boasting 902 million active users who send 38 billion messages daily on the platform. Not surprisingly, the app pivoted to include other helpful features like a payment app to rival Alipay, ride sharing, and a plan to disrupt the Chinese national ID program since users are required to register with their real names per government policy.
Viewed as the mobile extension to Tencent’s popular desktop messaging app, QQ, there was the belief that Chinese consumers had no universal way of commuting since email usage was low, cell phone plans were expensive, and spamming was a major issue. WeChat solved this.
While the messaging component is clearly still a vital part of the business, WeChat Pay has also proven to be successful by accounting for 40 percent of the Chinese mobile payments market. Although American users can’t link to their own bank accounts, they can accept payments from people visiting from abroad. Because of this, there’s the possibility for the American marketplace to capitalize on outbound Chinese tourism spending that reached over $260 billion last year.
Prior to 2018, the top two largest cell phone manufacturers for the last seven years has always been either Samsung or Apple. However, China’s Huawei snuck into the second spot (pushing Apple to third) after selling 54.2 million phones (15 percent of the market) as part of the overall 351 million smartphones sold during the second quarter of the year. Samsung sold 71.9 million smartphones for a 20% share while Apple sold 41.3 million phones, for a 12% market share.
This was notable as Huawei has been unable to penetrate the United States market after the Senate Intelligence Committee stated that the heads of the FBI, CIA, NSA, and the director of national intelligence warned that Americans shouldn’t use their products because it was founded by a former engineer in China’s People’s Liberation Army and has been described by U.S officials as “effectively an arm of the Chinese government.”
Taobao (which means “searching for treasure”) is a shopping subsidiary of Chinese behemoth, Alibaba, and earns the distinction as being the largest e-commerce platform in the world with 634 million active monthly users as recently as June 2018, who open the app on average seven times a day.
At its height, the service boasted sales bigger than eBay and Amazon combined — resulting in $210 billion in revenue — on consumer goods that all come with eBay-style ratings.
Although the app is in Chinese, users are able to use Google translate to navigate the platform, and a live stream feature exists where celebrities and tastemakers directly interact with a product.
Formed in 2015 after the merger of two smaller companies, Meituan and Dianping, that were seen as China’s equivalents of Groupon and Yelp, the new iteration aimed to do just about anything like selling movie tickets, delivering food, and providing hotel accommodations. As a result, it’s been referred to as China’s “everything app” when it comes to buying something online to experience offline (O2O). Perhaps what is most unique about this company is it is an alliance between competitors Alibaba and Tencent, although Alibab has relinquished much of its stake to focus on Koubei, its own O2O app.
Recently, Meituan-Dianping filed an IPO and raised $4 billion in additional capital in hopes of adding to its 60.9% market share of the Chinese online movie ticketing market and an expansion into the company’s distribution and production wing.
Since social media platforms like Facebook, Instagram, Twitter and Snapchat are restricted in China, Tencent positioned themselves to come up with something specifically designed for an audience starved of connectivity.
In its earliest iteration, QQ served as a quasi AOL Instant Messenger for desktop users. Even with the advent of mobile technology, QQ still boasts 860 million monthly active users – with usage amongst those born after 1990 at a staggering 60 percent.