China's big tech boom

Starting out as the world's factory manufacturing low-tech products, China is fast becoming one of its technological superpowers. Today, areas like the hardware mecca of Shenzhen and the innovation hub of Zhongguancun in Beijing have provided fertile ground for China's tech firms to develop and become industry leaders in areas including drone technology, autonomous vehicles, mobile apps and the Internet. ST China Correspondent Danson Cheong highlights some of its biggest firms today.

'Google of China' has a finger in every tech pie

BAIDU

Market value: US$43 billion (S$59 billion)

Beijing-based Baidu is behind China's largest search engine (and the world's second-biggest), with about 70 per cent of market share domestically.

Called the "Google of China", Baidu is known informally as one of China's BAT tech giants - Baidu, Alibaba and Tencent.

The company was founded in 2000 by Chinese software engineer Robin Li, who returned home to develop Baidu after working and studying in the United States.

The firm listed on the Nasdaq exchange in 2005, and was one of the first Chinese companies to list in the US.

The bulk of Baidu's revenue comes from advertising, but the company has also been diversifying into other areas.

In 2010, it started iQiyi, a video streaming service that bills itself as China's Netflix.

More recently, it has been investing in smart devices and cloud computing.

It is also one of China's industry leaders in self-driving cars.

Baidu's self-driving unit, Apollo, has tested autonomous cars in 24 cities around the world and was one of the first to be awarded licences to test such vehicles in complex conditions in Beijing.


Consumer app leader and world's most valuable unicorn

ByteDance, which has its headquarters in Beijing, has set its sights beyond China with TikTok and other apps.

ByteDance, which has its headquarters in Beijing, has set its sights beyond China with TikTok and other apps. PHOTO: AGENCE FRANCE-PRESSE

BYTEDANCE

Market value: Estimated at between US$100 billion (S$137 billion) and US$150 billion

Known as the world's most valuable "unicorn" company, ByteDance has found itself in the cross hairs of the Trump administration over its short-video sharing app, TikTok.

Washington recently labelled TikTok, which reportedly has 100 million users in the United States and is wildly popular with the younger generation, as a national security threat.

 
 

It has threatened to ban TikTok if the app is not sold to an American company.

Apart from TikTok, ByteDance also runs Douyin - the mainland Chinese version of TikTok - and Jinri Toutiao, a news aggregator that doubles as a social networking app.

Within China, Jinri Toutiao has more than 250 million monthly users, according to a report by iResearch. Douyin has half a billion monthly active users.

The private company was founded by software engineer Zhang Yiming in 2012, and counts among its investors the world's largest venture capital firms, including Sequoia Capital and SoftBank.

Observers are closely watching ByteDance for how it is leading the way with consumer apps.

It has set its sights beyond China with TikTok and other apps, including Helo in India and BaBe in Indonesia.


E-commerce giant started biggest online retail event

Alibaba's three main e-commerce platforms - Taobao, Tmall and Alibaba.com - have hundreds of millions of users.

Alibaba's three main e-commerce platforms - Taobao, Tmall and Alibaba.com - have hundreds of millions of users. PHOTO: REUTERS

ALIBABA

Market value: US$680.7 billion (S$934.5 billion)

Alibaba is the largest e-commerce firm in China and one of the most valuable tech companies in the world.

 
 

It was founded in 1999 by entrepreneur Jack Ma in Hangzhou in Zhejiang province.

Its three main e-commerce platforms - Taobao, Tmall and Alibaba.com - have hundreds of millions of users.

The firm is known for starting online shopping event Singles' Day in 2009. The event takes place on Nov 11 each year.

It is the world's largest online retail event, drawing US$38 billion in sales last year. That amount is greater than the total online sales on Black Friday and Cyber Monday combined in the United States.

The firm is also investing heavily in its cloud computing business, saying in April that it would plough 200 billion yuan (S$39.4 billion) into cloud infrastructure such as data centres over the next three years.

It currently has data centres covering over 20 regions globally.

Alipay - Alibaba's online payment service which is part of its subsidiary Ant Financial - along with WeChat Pay, is one of the top two e-payment services in China.

It has expanded this payment service to over 50 markets globally, where it is used mostly by consumers from mainland China.

Listed in both New York and Hong Kong, Alibaba holds the world record for the largest initial public offering, with its US$25 billion US listing in 2014.


From small-time trader to global conglomerate

Huawei's campus that houses offices at Songshan Lake in China's Guangdong province. The company operates in more than 170 countries.

Huawei's campus that houses offices at Songshan Lake in China's Guangdong province. The company operates in more than 170 countries. PHOTO: REUTERS

HUAWEI

Market value: Unknown

The multinational telecommunications and consumer electronics giant Huawei had humble beginnings as a small-time telecoms equipment trader in Shenzhen in 1987.

But over three decades, former People's Liberation Army engineer Ren Zhengfei turned it into a global conglomerate.

It is now the world's second-largest smartphone manufacturer, ahead of Apple and behind Samsung. It is also the top supplier of telecoms networking equipment, surpassing Ericsson in 2012.

The Shenzhen-based conglomerate has 180,000 employees and operates in more than 170 countries. It is also employee-owned, chalking up 858.8 billion yuan (S$169.2 billion) in revenue last year.

The company has long been a US target over espionage concerns, its dominance in 5G technology and violations of US sanctions on Iran.

Mr Ren's daughter and Huawei's chief financial officer Meng Wanzhou is still in Canada waiting to be extradited to the United States, where she faces fraud charges related to breaching the sanctions against Iran.

Last year, Washington added Huawei to a trade blacklist, restricting its ability to buy American technology and services without its approval.

 
 

While it has since been given some exemptions to continue buying from some American suppliers, Huawei has been racing to develop its own technologies, including HarmonyOS, for its own devices.

Not much is known of Huawei's financial and organisational structure, and until its recent run-ins with Washington reached a climax last year, Mr Ren largely kept a low profile and did not give media interviews.


Top games publisher behind popular mobile app WeChat

Shenzhen-based Tencent focused on instant messaging services initially, but has since expanded into other areas including games.

Shenzhen-based Tencent focused on instant messaging services initially, but has since expanded into other areas including games. PHOTO: REUTERS

TENCENT

Market value: US$636 billion (S$873 billion)

Tencent was founded by Mr Pony Ma, a computer science graduate from Shenzhen University, in the 1990s along with four others.

The Shenzhen-based company, which is listed on the Hong Kong stock exchange, focused on instant messaging services initially, but it has since expanded into other areas including e-payments and games.

Mr Ma's fortunes have also grown with the company. Now worth US$50 billion, he surpassed Alibaba founder Jack Ma to become China's richest man this year.

The firm's most well-known product is smartphone app WeChat, which has over a billion users and is used for a myriad of different functions in China, including instant messaging, social networking and payments.

Along with TikTok, the app has become the latest target of the Trump administration. There is speculation on whether Tencent's other business interests in the United States will also be targeted.

 
 

According to market research firm Newzoo, Tencent was the world's biggest games publisher by revenue last year and collaborates with US firms like Activision Blizzard and Electronics Arts.

The company is also behind some of the most popular mobile games in the US, including PUBG Mobile and Call of Duty: Mobile, and invests widely in American firms including Uber, Reddit, Tesla and Snap (creator of Snapchat).


AI champion known for smart devices, home appliances

Xiaomi has gained a reputation worldwide for well-designed smartphones priced at a fraction of those from other popular brands.

Xiaomi has gained a reputation worldwide for well-designed smartphones priced at a fraction of those from other popular brands. PHOTO: REUTERS

XIAOMI

Market value: HK$371.7 billion (S$65 billion)

The Beijing-based firm is the world's fourth-largest smartphone seller and the world's largest Internet of Things platform for consumer devices.

Founded in 2010 by Mr Lei Jun, a computer science graduate from Wuhan University, the company is known in China for its smart devices and home appliances, such as air and water purifiers, smart televisions and vacuum cleaners.

The firm is also one of China's national AI champions, companies that have been picked by the Chinese government to advance AI development - smart home devices in Xiaomi's case.

Internationally, Xiaomi's smart devices are helping it gain market share. It leads the smart TV sector in India, with 27 per cent of market share, according to Counterpoint Research.

The company has also entered markets including Russia, Chile and Japan, and is present in all 10 Asean countries.

Xiaomi has also gained a reputation worldwide for well-designed smartphones priced at a fraction of those from other popular brands.

Amid the worsening economic outlook, these mid-range smartphones from Chinese manufacturers such as Xiaomi and Oppo are expected to gain greater market share, industry analysts say.

The firm listed on the Hong Kong stock exchange in 2018.

A version of this article appeared in the print edition of The Sunday Times on August 09, 2020, with the headline 'China's big tech boom'. Print Edition | Subscribe