One of the reasons US-based startups grow so quickly is that the ones with traction here tap into a (relatively) homogeneous 300+ million market. A Chinese company with similar market share potential has tapped into about 4X that market. Growth rate is much faster in such a market, as opposed to global growth that has to deal with diverse sources of friction (e.g. Uber's challenges in London, Paris, etc. vs in the US).
I'm curious about how much of the considerable Chinese population is actually available to market tech products to. Something tells me comparing the populations straight up is misleading.
We did ethnographic research on smartphone usage in China back when I used to work for Intel, back in 2007. Even then, smartphone usage had penetrated the least educated segments. Blue-collar workers living six to a room were heavy users of smartphones, some were heavy gamers.
The percentage of their income they spent on technology and entertainment was more than in the West. The growth rate was also amazing.
Vast majority of Chinese population is available to at least parts of the tech products now. WeChat/Alipay is available virtually anywhere.
It is true that the development in China is very unbalanced, and habits of different groups of people varies a lot. There are also abundant number of tech products targeting each group of people. For example, Taobao has been very popular in large cities for many years, you'd think they've saturated online shopping market. A new startup Pinduoduo launched in 2015, targeting online shopping market in smaller cities and countrysides, managed to acquire hundreds of millions of users there, and they just filed for IPO a few days ago.
> Something tells me comparing the populations straight up is misleading.
Totally agree: once chosen by the Communist Party, a company is likely to enjoy state-sanctioned monopoly status. Not only will they have access to the entire population, the population may have no access to any other service provider in the same sector.
The reality is, three major players Baidu, Alibaba, Tencent are competing with each other in almost every front, and also competing with tons of new challenges like Meituan, Bytedance, etc. The abundance and variety of small startups and their competition is nothing unlike what's happening in silicon valley.
