From C2C to 2CC: The Evolution of Chinese Mobile Internet

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Chinese Version

Editor’s Note:

As is known to all, the history of Chinese Internet is a history of constant imitation, since all the well-known Internet applications in China can be traced back to an American counterpart. This Copy to China (C2C) model was so common that nobody would find it surprising at all. However, things begin to change these years, because more and more foreign Internet companies start to learn from their Chinese counterparts and a To China Copy (2CC) model emerges.

As is known to all, the history of Chinese Internet is a history of constant imitation, since all the well-known Internet applications in China can be traced back to an American counterpart. This Copy to China (C2C) model was so common that nobody would find it surprising at all. However, things begin to change these years, because more and more foreign Internet companies start to learn from their Chinese counterparts and a To China Copy (2CC) model emerges.

The rise of 2CC model

In the past, it was Chinese entrepreneurs who copied Facebook to China and founded Renren. Recently, however, Facebook copied Sougou’s Mobile Phone Assistant and launched a similar service called “Hello”, while Messenger also copied WeChat and carried out similar cash transfer service. A new “To China Copy” (2CC) model has emerged.

Facebook’s Hello service can help users make phone calls, block blacklist phone calls, display the caller’s information, search for phone number of a particular store and make dials through one touch, etc. on an Android phone. All these services can be found in Sougou’s Mobile Phone Assistant app. In the near future, Hello will be able to block harassing phone calls based on a cloud base of harassing phone numbers and provide users with a series of phone numbers that they might need for everyday use.

Earlier, Facebook launched Home on Android’s platform, a personalized desktop service similar to Go Desktop. Although Zuckerberg put great emphasis on Home, it turned out to be a total failure.

Google, the leading innovator in technology around the world, is also forced to learn from its Chinese counterpart, Baidu and provide ticket booking service and quick setup service in its search interface, whereas Baidu launched these services more than one year ago.

A year ago, nobody would believe that Internet giants in the Silicon Valley have to learn from their Chinese counterparts. That’s why many people laughed at Meizu’s charge that IOS7 copied its idea. However, the inconvenient truth is that as more and more original services and functions are carried out by Chinese Internet companies, overseas companies should start to learn from and to copy China (2CC). A few more factors also contribute to this trend.

Internet + with Chinese characteristics

Anyone who has been to the Silicon Valley would find out that few people talk about concepts such as O2O and door-to-door service and Internet+, etc. While Internet+ emphasizes on the combination of Internet and traditional industries, O2O and door-to-door service aim to provider better local life service. The idea of sharing economy is fundamentally a kind of O2O service and is quite popular due to the popularity of Uber and AriBnb.

In a word, Internet+ is merely a Chinese concept. Since traditional industries, including PC, credit card and local service are not mature enough in China, Internet was attached high value by Chinese government and thus, smart phones, mobile payment and local service app come up as substitute. In the US, Internet+ has no room since traditional industries are already mature enough.

When Internet thinking is valued in all traditional industries, a variety of products and functions will be carried out and form Internet+ with Chinese characteristics. Foreign companies can learn from some of these products and functions.

Major shifts in Chinese capital market

The reason why the Copy to China (C2C) model used to dominate China’s Internet industry is that the US is the very center of Internet business and almost all the Chinese Internet giants were invested by overseas venture capitals. This leads to the following two consequences:

First, the US is the center for innovation in the global Internet business. All major developments and breakthroughs take place in the US, that is to say, US can be copied.

Second, Chinese entrepreneurs have to compare their products to American products so as to help foreign investors understand their products, that is to say, China need to copy.

From 2014 to 2015, Chinese capital market changed a lot. While Chinese investors were crazy about TMT industries, American investors seemed not to care much at all.

In this case, Chinese entrepreneurs don’t have to take efforts to compare their products to foreign products and attract foreign investors, but instead endeavor to make their products as convenient and user-friendly as possible for Chinese users.

The golden time for young entrepreneurs

Last year, several young entrepreneurs caught public attention through their products, such as sex toy stores and Friday. Although many people treat their popularity as mere press speculation, it is no denying that young entrepreneurs are both major users of Internet products and backbone developers of these products.

Different from leading innovators such as Li Yanhong, Ma Huateng and Jack Ma, young entrepreneurs have complete different preferences and consumption habits and are eager for innovation and new things.

As is put in CEO of LeTV, Jia Yueting’s open letter when debuting LeTV’s own smart phone model, “The 90s no longer use iPhones to show their privilege but rather seeks for openness, sharing and diversity.”

This is indeed the best time for young entrepreneurs. They are no longer satisfied with copying from others but start to come up their own ideas and be copied by others.

Are Chinese Internet companies forced to innovate?

Chinese users have their own preferences and consumption habits, to which foreign companies failed to cater. For example, Apple is too arrogant to refuse to cater to the need of Chinese customers. Technically, Apple can of course block harassing phone calls and text messages, but Apple just refuses to do so and will bring apps with such services off App stores.

The same is true for Uber, Evernote and LinkedIn, etc, which gives Chinese companies such as Yidao, Wangyi Cloud Note and Lagou great opportunities to outperform.

To solve this problem, foreign companies choose either to collaborate with Internet giants such as Baidu or establish another subsidiary company in China.

The failure of foreign companies to cater to Chinese users’ unique preferences and consumption habits, however, gives Chinese companies opportunities to innovate and better serve the need of Chinese users. That’s why many foreign companies need to learn from Chinese companies about how to win Chinese users.

Tools are easier to be copied

In the era of PCs, there were indeed several Internet products that were made only in China, for example, Douban. A decade later, there is still no such counterpart in the US. Goodreads is only a platform of book reviews, while Douban is an encyclopedia of books, music, movies, etc. It’s easy to copy the function and service, but it’s difficult to copy the culture of another country. That’s why Douban-like products can never appear in the US. Moreover, management model can’t be copied either.

In the era of mobile Internet, tools are more likely to succeed. In the above mentioned cases, it is functions and services that are copied from China, whereas WeChat Red Envelop, Momo can never be copied since they are the result of unique Chinese culture.

There is no patent protection in Mobile Internet industry

App Store and Google Play make it possible for users to find any useful apps in time. These years, the globalization in technology sector is accelerating. While Chinese technology fans get to see leading innovators such as Elon Mush, Bill Gates, etc more often, Chinese entrepreneurs also get to visit the Silicon Valley and have conversation with leading innovators in the world. The world has become so flat that copy becomes so easy.

While copyright infringement is easy to identify in hardware industry, it is hard to patent for an app’s interface, function, etc.

That’s why Chinese Internet companies were free to copy from its foreign counterparts to China. Tencent and many startups have also fought for copyrights but ended up nowhere, since it is hard to tell the difference between two similar apps.

Since Chinese companies can doing nothing to foreign companies’ copying, they are forced to enter foreign market before being copied. Several mobile Internet giants such as Liebao, UC, GO have already gone abroad.

In mobile Internet industry, he who does the best, rather than the first, laughs last. That’s why it doesn’t really matter if it is C2C OR 2CC.

(The article is published and edited with authorization from the author @Luo Chao, please note source and hyperlink when reproduce.)