The tech industry is moving towards a transitional period in China. The Chinese internet companies are gearing up for the next wave of revolution as smartphones penetration is reaching its optimum stage in the country. Replicating the massive growth rates that were recorded previously would be difficult, as the market nears a saturation point. Which is why the industry is bound to change its business approach to avoid any possible growth stagnancy or decline in the forthcoming time.
1. Growing Emphases on Secondary Market Segment
To an extent, the internet market in China lost its robust growth momentum in 2016. On-demand services, e-commerce and several other online segments have successfully covered-up I-tier cities in the country. Therefore, internet companies in China seeks for further innovation in niche markets going forward. Focus on ii-tier and iii-tier cities is growing higher where the application of web-based services are directly influenced by the development of PC and smartphone market. The expanding pool of geriatric population throughout the country is seen as a potential consumer base. For instance, services particularly catering to the healthcare needs such as booking appointments for medical checkups and online medication purchase are beginning to surface.
2. Shift From Price to Quality
The country’s impressive economic growth over the past couple of year has lifted-up the standards of living, creating more millionaire each year. Change in the consumer purchasing habit is quite evident in the country. Buyers are prioritizing quality over quantity in their day-to-day purchase, which in turn, is creating a slew of opportunities for internet service providers. Improvement in fronts pertaining to quality of life such as healthcare, education and entertainment, is witnessing a higher demand from the Chinese consumer.
3. Startups Will are Having More to Say
Industry insiders suggest that in 2016 new ventures were valued in a more rational way as compared to the previous years. Investors and entrepreneurs are making more discreet and rational decisions. Many of the country’s artificial intelligence startups, are expected to gain more popularity amongst consumers as oppose to views that suggest a bleak chance of their survival. Most investors are having hopes on such tech firms owing unprecedented potentials of such technology that is only going get bigger in future.
4. Globalisation is Having an Inevitable Impact on Chinese tech firms
The recent slump in the domestic market is compelling Chinese companies to explore other emerging countries. With the help of successful domestic market models and cost-efficient products these companies foraying into countries such as India and Brazil. For instance, the fast growing market in India is captivating the business propositions of Chinese smartphone manufacturers. Some of the mobile technology developers are finding business opportunities in mature markets as well by leveraging the county’s DevOps capabilities, For instance, musical.ly an application for streaming music is gaining popularity amongst the international audience. Backed by the massive domestic market, Chinese tech giants are taking the leap of faith and wagering strong on other regional markets. However, staying mindful of the market dynamics is crucial for these players as new entrant will certainly windup the competition in all respects. In addition, patent wars and copyright violations coupled with compliance with local regulations and adapting to host communities are creating hurdles for many of these companies while entering new regions.