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The explosive growth of the digital market in China, a country with an increase of than 700 million internet users, constitutes a wealthy award to companies that can exploit its opportunities. 1 billion or even more), with almost three-quarters of these targeting digital or online markets. So why have so few of the leading Western players succeeded in holding a winning share in China’s digital market?

They know well the winner-takes-all stakes in digital business, plus they have effectively dominated international marketplaces in the past – after rolling out their digital products, systems, and business models in other countries, without significant level of resistance. In 2002, eBay Inc. moved into China and quickly captured a 70% market talk about. In 2005, Microsoft Corp.’s MSN China proceeded to go live and gained a 53% market talk about among Chinese business users. But its market talk about decreased to significantly less than 5% before it stop the Chinese market in October 2014 under strong strike by Tencent’s QQ and WeChat. In 2014, Uber Technologies Inc. formally joined China and spent billions in fierce competitive battles to gain market talk about from its Chinese competitors.

  1. Finish publication
  2. Spy on your own Competition
  3. Make the information available to the community
  4. Typical value of individual agreements by business models
  5. The sale of shares make raising financing a lot easier
  6. Information on other business can be difficult to obtain

In 2016, it sold its Chinese subsidiary to Didi Chuxing Technology Co. and exited the country. In 2015, Airbnb Inc., the world’s largest online market place for short-term lodging, got in China. As of today, it lags behind its Chinese peers much. Why have so many powerful Western players hit a wall in China? Protectionism is a convenient reason, but we believe that it can be an exaggerated one. Worse, it oversimplifies and obscures some important competitive realities in China that many Western players have skipped.

These factors arise from the very different starting point at which China inserted the digital era. Unlike many Western economies, China’s overall economy had not been yet mature when the digital tsunami broke on its shores. In many of the sectors most affected by digital technologies, offline offerings were limited, physical infrastructure was lacking, and other essential market components, such as payment systems, were lacking. Thus, in China, digital systems offered a solution to fundamental bottlenecks in intake, when compared to a disruptive alternative to existing solutions rather. From this backdrop, China’s digital market developed in an exceptionally rapid and dynamic manner, one based on need rather than preference.

Furthermore, the winning idea for dominating digital markets proved to have some unique characteristics with regards to localization, speed, online and offline integration, and local ecosystem development. It is important for Western players to identify and understand these characteristics. They aren’t only key to winning in China but also far away that talk about an identical profile, such as Indonesia and India. In addition, they offer valuable insight into how China’s digital giants may compete as each goes global. Read the rest here.

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