China is ranked first on Boston Consulting Group’s most recent Growth Tech 100 list, which shows that innovation there is accelerating significantly. China is ranked in the top three spots in the Growth Tech 100 (GT100), a list of the world’s fastest-growing tech-enabled firms founded in the last 20 years.
Three of the top companies on the list are Pinduoduo, Meituan, and ByteDance, while 20% of the GT100 is made up of companies having Chinese headquarters. Furthermore, more than half of the listed producers of electric vehicles are Chinese.
Even when the disastrous impacts of the pandemic on global financial markets began to emerge, these three tech giants and the other companies on the list beat the market.
The Wall Street Journal reports that, despite the pandemic, China passed an innovation milestone last year (2020), receiving FDI of US$163 billion, surpassing FDI inflows to the US. Such a milestone is an increasing indicator of the innovation we can expect from China in the future, despite the current regulatory restrictions imposed on Chinese IT businesses.
Why China’s creativity is likely to increase?
Super applications like Meituan, which is placed #2 in the GT100, have helped drive significant growth in consumer and mobile commerce in China over the past couple of decades as a result of the country’s growing urbanization and expanding consumption.
The growing influence of younger customers who place a high value on customization highlights the significance of specialized products to these businesses’ success.
Chinese consumers are among the most mobile-savvy in the world, which has sparked innovation in social media platforms that cater to mobile users. Examples include ByteDance, the owner of TikTok (ranked #3), and Kuaishou, ranked number 28.
Chinese innovation in AVs and IoT has also been boosted by government support and incentives. More than half of the GT100 in this category, including NIO (#11), Li Auto (#23), Xpeng Motors (#24), and Roborock (#59), have their headquarters in China.
The top 5 tech-enabled businesses in China
1. Pinduoduo
US$16.9 billion in average annual valuation growth
Pinduoduo (PDD), an e-commerce website that facilitates group buying arrangements between farmers and customers, was established in 2015 by former Microsoft and Google engineer and serial entrepreneur Colin Huang. The company, which is now regarded as the largest agritech platform in the world and is valued at US$101 billion, went public with a US$41.6 billion IPO three years after its founding. The company’s founder Huang handed up the CEO position to Chen Lai in 2020 and subsequently left as chairman early in 2021 to focus on research in the fields of food and life sciences, where innovations could shape the future of the PDD platform.
2. Meituan
US$16.9 billion in average annual valuation growth
Meituan, an all-in-one app used to browse products, make purchases, and make payments, was founded in 2010 as a food delivery service but over the next ten years has evolved into a super app. It was among the first to use the O2O model. The Beijing-based startup offers a variety of on-demand services, including local food delivery, ride-hailing, cinema tickets, hotel reservations, and vacation arrangements. It purchased the bike-sharing firm Mobike (now Meituan Bike) in 2018, and as a result, it has grown to become China’s largest on-demand food delivery service. Since it debuted on the stock market in 2018 and was valued at US$15.6 billion, the company has had primarily profitable quarters. It is hiring quickly and plans to invest in driverless delivery cars, drone deliveries, and other cutting-edge technology.
3. ByteDance
US$16.9 billion in average annual valuation growth
ByteDance, the owner of the popular social media platform TikTok, was founded in 2012 and has since become one of the most valuable privately held businesses in the world, with a US$140 billion valuation. TikTok, which debuted in 2017 and truly took off during the height of the pandemic lockdowns, helped the brand achieve significant global fame. TikTok provides customers with an addictive, custom video-watching experience by making it simple to produce, edit, and share 15-second videos on a mobile device.
Other Chinese social networking apps like FlipChat and Duoshan are owned by ByteDance. The company’s billionaire co-founder Zhang Yiming handed co-founder Liang Rubo the reins of leadership when he resigned as CEO in April 2021. Two months later, he also resigned as chairman, saying he wanted to contribute to the development of the company’s longer-term plan albeit from a distance.
4. NIO
US$9.1 billion in average annual valuation growth
Considered a Tesla competitor, Shanghai-based electric vehicle company NIO has gained significant support from tech behemoths like Tencent, Baidu, and Xiaomi. Since its 2014 launch, NIO has expanded swiftly. The start-up creates, collaboratively manufactures, and markets smart, connected, and luxury EVs while advancing the development of next-generation connectivity, autonomous driving, and AI technology.
Although its debut model was a supercar, NIO unveiled its first mass-produced electric vehicle, the ES8, a seven-seater SUV, in 2019. This was followed by the ES6, EC6, and ET7 sedans. The electric vehicle startup, which was founded by Chinese businessman William Li, was listed on the NYSE in 2018 and ranked third among Chinese companies that year. About 140,000 cars have currently been delivered to clients in China, and it is also moving into Europe. It is now worth US$64 billion.
5. Xiaomi
$7.2 billion in average annual valuation growth
Since its founding just over ten years ago, consumer electronics company and smartphone manufacturer Xiaomi has experienced exponential growth. In the second quarter of 2021, its global smartphone shipments reached record highs, surpassing Apple sales in Europe and placing Xiaomi for the first time at number two globally with a global market share of 16.7%. With 324.8 million smart devices connected to its network, the business also owns the top consumer AIoT platform in the world. More than 100 countries sell Xiaomi goods. The business, which is currently valued at US$79 billion, recently declared its intention to enter the market for smart electric vehicles.
