7 Chinese companies that will shape the future of the tech industry: My week in Beijing

Technology companies in China have leapt forward in Usain Bolt-like strides in recent years, as they've evolved from remarkable copiers to legitimate innovators.

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The art and architecture of the 2008 Beijing Olympic Park is a symbol of China's 21st century ambitions.

Image: Jason Hiner/TechRepublic

If you still think Chinese tech companies are only about replicating the innovations that others have made, then you've got some catching up to do. Today's Chinese tech sector is filled with a number of disruptive companies that are not only competing but leaping ahead in the race to build better products and use tech to solve important problems.

I spent a week in Beijing in April, meeting with Chinese companies, talking with entrepreneurs and venture capitalists from across the globe, and getting a look inside some of the most important innovators on the Chinese mainland at GMIC Beijing 2016.

Here's what I found. The following companies are doing big things and are likely to be important players in the tech industry's next stage.

1. Baidu

Often called "the Google of China," Baidu is best known as the Chinese mainland's most popular search engine, which makes it an online advertising colossus. However, the company also does maps, news, cloud storage, internet TV, and a ton of different search products. Beyond core internet services, it has also branched out into e-payments with Baidu Wallet and food delivery services in over 70 Chinese cities with Waimai. Like Google, the long term future of the company may be in artificial intelligence. The company is also working on a self-driving car in its Silicon Valley lab that's ramping up to over 100 engineers by the end of 2016.

2. Alibaba

The Chinese tech giant that's perhaps best known across the English-speaking world is Alibaba, the world's largest e-commerce company. Yahoo famously owns a 15% stake that's valued at over $30 billion--far more than Yahoo's core business is now worth. Yahoo co-founder Jerry Yang bought the stake for $1 billion in 2005, in exchange for a 40% ownership of Alibaba at the time. In a sign of how radically their fortunes have changed, Alibaba has considered acquiring Yahoo in recent years. Today, Alibaba is an e-commerce juggernaut. Although China is a distant second to the US in GDP, China is the world's largest e-commerce market because it doesn't have a retail infrastructure to match the US or Europe, and Alibaba has built B2C, C2C, and B2B platforms to serve it. It's best-known for Taobao, its eBay-like C2C platform, but it also has B2C platform Tmall, online payment service Alipay, and B2B cloud computing platform Aliyun.

3. Tencent

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ZDNet's Jason Hiner moderated panels at a pair of Beijing tech conferences in April 2016.

Image: Cheetah Mobile

Sometimes referred to as the "Facebook of China," Tencent was long known for its instant messaging client QQ.com, with over 200 million users. However, Tencent's successor to QQ, WeChat, has become the world's second largest social network behind Facebook and it is growing like crazy. WeChat has exploded from its launch in late 2010 to over 200 million users by 2013 and now 700 million users in 2016. Think of WeChat as a combination of WhatsApp, Facebook, Apple Pay, Google News, and Slack. It does it all. At a time when social networks are splitting out specific functions into different apps, WeChat is taking the Swiss Army Knife approach, and it's working. Whenever I met people in Beijing and they wanted to follow up, they always asked if I was on WeChat. It's the place where people spend more digital time than anywhere else. Almost all the other tech vendors I spoke with talked about their partnerships with WeChat--whether it was its news feed, its photo sharing, or its payment service. You can now download it and use it in multiple languages and it's starting to make inroads in India and is available in the US.

SEE: Photos: Inside GMIC Beijing 2016, 'The CES of China' (TechRepublic)

4. JD.com

You can think of JD.com as "the Amazon of China," but it's actually racing ahead of Amazon in several areas. A decade ago, JD made a bet that a lot of Chinese shoppers would evolve from being price-motivated to wanting to buy based on quality and brand authenticity once consumers in China had more disposable income, and that's exactly what's happened. China is flooded with knock-off products, but JD carries only authentic goods from the world's most iconic brands. At the same time, it realized 70% of its complaints from customers were about shipping, so it built its own shipping service--which infuriated investors. Today, it offers same-day delivery to 600 million customers in China and next-day delivery to virtually the entire country. It's also working on drone delivery to remote rural areas. They use big data to keep inventories low, maximize delivery, and create sophisticated data models to run its own financing for customers.

5. Didi

Like its US rival Uber, Didi has been a rocketship for the past several years. Didi Chuxing, as it's officially known, has created the Chinese mainland's most popular ride hailing service, serving over 10 million rides per day (compared to 2 million that Uber does daily worldwide). Founded in 2012, Didi now has over 5,000 employees and is valued at over $16 billion--and it famously got a $1 billion investment from Apple earlier this month. Didi has gone far beyond just being a taxi app. They work directly with existing taxi drivers in addition to independent operators. They set up carpooling and ridesharing with Didi Bus. They work closely with corporate clients to book and manage business rides. They have a service that will pick up both you and your car and drive you home if you've been drinking. They have a test driving service that let's you try out a car before you buy it (or loan out your car for a fee). Traffic is one of the biggest problems in China and Didi sees itself using machine learning and big data to solve it. The company said its services are moving more cars off the street, creating 4 million new work opportunities per month, and saving 13.3 million tons of carbon emissions through carpooling alone. While Didi has 87% market share in China, it's only reached 1.5% of the population, so its growth potential is massive.

6. Huawei

Once considered the "Cisco of China" because of its role as a hardware provider to telecommunications companies in Asia, Huawei has branched out in recent years and become one of the world's leading mobile device makers. As Chris Duckett recently wrote, Huawei's smartphone market share is on the rise in a number of markets outside of China. But, the company is also seeing its boats rise in other waters as well. It's working on a narrowband IoT deployment in Australia, it's building a 1.0 Gbps 5G network that will be deployed in 2017 in Singapore, it's partnering with Google to bring Daydream VR to Android, and its new Honor 5X (budget brand) smartphone is getting solid reviews. In a world where everyone wants to be a software and services provider, Huawei has emerged has a pre-eminent hardware maker--in both the B2B and consumer markets.

7. Xiaomi

Speaking of hardware makers, Huawei's biggest competition in the consumer device market isn't just from Apple and Samsung but from its upstart Chinese neighbor, Xiaomi. The privately held startup launched in 2010 as an alternative Android OS maker, but it soon decided to make its own phones and hired away Google's Android chief Hugo Barra to help. Since then, the company has developed a rabid fan base for its "Mi" brand of smartphones by fostering a huge community of 170 million worldwide users and 10 million beta testers. That's helped make Xiaomi devices the phone of choice among the most active smartphone users in China. While the Mi smartphones themselves still draw a lot of their design cues from Apple and Samsung, Xiaomi has been more innovative in other areas. The company is becoming a much broader consumer product brand--almost a mix of Braun and Apple. Its latest products include flat screen televisions, hi-fi headphones and earbuds, an Android TV set top box, a fitness tracker, a hoverboard, a water quality measurement pen, and a WiFi-enabled rice maker.

Also keep an eye on...

Other companies to watch include Cheetah Mobile, which is branching out from being an Android app maker into artificial intelligence and robots with the launch of Cheetah Robotics, and LeEco, which wants to take a run at Tesla in the race to create the first mass market electric car.

Incumbents

While there are a number of other Chinese tech companies that have made a strong name for themselves, including Lenovo, ZTE, and Sina--and they remain important to keep on your radar--they aren't quite as innovative and disruptive as the big seven mentioned above.

Startups

China is also starting to percolate lots of new startups. Many engineers, innovators, and leaders who have left China to study in the US, are now returning to China to launch their own companies instead of going to work for US tech giants. Some of that is due to the large pool of VC money, some of it is due to the huge numbers of engineers available, and some it is simply due to the broader tech ecosystem that's developing in China, especially in Beijing, Shanghai, and Shenzhen. You can technically still think of Didi and Xiaomi as startups. But there are also impressive new companies just starting to breakthrough, such as Deep Glint (big data-powered security cameras) and Hover Camera (personal photography drones).

ZDNet's Monday Morning Opener is our opening salvo for the week in tech. As a global site, this editorial publishes on Monday at 8am AEST in Sydney, Australia, which is 6pm Eastern Time on Sunday in the US. It is written by a member of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and the US.

Previously on the Monday Morning Opener:

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