Scan the vast landscape of China, its milling crowds of 1.4 billion people, its tens of thousands of competitive entrepreneurs, its vibrant start-up community, and you might just see something extraordinary: what American commerce will look like in the years to come.
So says Connie Chan, a general partner at Andreessen Horowitz, who has spent the last decade studying commerce in China in search of developing business trends and tell-tale signs of what may take hold in the American marketplace. She spoke about the predictive power of Chinese consumer technology trends for America and the world at the recent Jefferies Private Internet Conference.
“For the last ten years, I’ve had the strong belief that in consumer mobile internet, China is a place to learn,” Chan said. “When something takes off in China, it’s likely to take off all over the world.”
One reason for China being ahead of the United States in consumer technology trends is the sheer scale of competition and the number of companies that get funded in China. Comparing it to The Hunger Games, Chan said that in a competitive ecosystem in the United States there might be a handful of entrants, while in China there might be more than 20. The result is the generation of more successful ideas and businesses.
Another reason, at least in terms of e-commerce, is that in China smart phones were adopted as a primary way of buying and selling things long before the United States, she said. Even today, consumers in the United States are far less likely than the Chinese to make large purchases on their phones.
The result is that China is not only the largest market in the world, but a testing ground for other nations.
Chan recounted the early days of mobile internet when Chinese apps largely imitated their Western counterparts. This pattern flipped in 2011, with the launch of WeChat.
WeChat offered features beyond basic messaging, like mobile payments and social media, which were missing in Western alternatives. This marked a turning point for Chinese innovation, showcasing the country’s ability to spearhead groundbreaking technologies.
Intense competition soon emerged among Chinese entrepreneurs, fueling an innovation surge in Chinese consumer technology.
Micromobility – the use of lightweight vehicles such as bicycles or scooters for transportation – is a major trend that took off in China before making its way to the U.S. She pointed to Lime, an American micromobility start-up.
"By the time Lime reached American streets, two Chinese companies, Ofo and Mobike, had already secured Series B funding," Chan said.
In studying Chinese business technology trends, Chan said she separated those business ideas that were China-specific – that is, would appeal largely to a local market – from those that ideas that addressed more universal problems that exist in other markets.
“Find things that have a clear product market fit and then try and figure out if there's anything that's culturally specific to that region or if it's something applicable to all humans,” Chan said. “And if so, then go find the Western team that can leverage those learnings. Teach it to the Western team so they can grow faster with this kind of head start. And that's worked out for us in quite a number of cases.”
While artificial intelligence is expected to be the focal point of tech market growth, other sectors remain ripe for disruption. Chan emphasized e-commerce, where Asian platforms like Tmall and Taobao are leading a shift from search-based to discovery-driven shopping.
“When you use Amazon, you're probably going straight to the search bar. You're not browsing Amazon for fun. But when we shop in real life, we're usually browsing and window shopping,” Chan said. “Shopping has not been translated on the internet yet, but there are companies like Whatnot and Insider that are embracing this idea of product discovery.”