Could China Dominate the Web with 'Microinnovations'?

If Nothing Else, it Could Teach U.S. Internet Companies a Thing or Two

By Published on . 1

In the U.S. it is almost impossible to imagine America as anything other than the beating heart of the online universe. Who could compete with giants such as Facebook, Google, Twitter, YouTube, eBay, iTunes or Amazon?

Well, watch out for China. While the U.S. leads the way in digital "invention," as it does in many fields, from aeronautics and energy exploration to engineering, the Chinese have perfected the concept of "microinnovation"--defined here as incremental improvements to products, platforms or services, where the sum of their parts produces a far higher collective yield.

China is driven by a culture in which speed fuels success and markets allow no time for true inventions to emerge. Its internet industry has a powerful sense of adoption and adaptation, of taking the best of the West, localizing it and making it better.

Chinese microblogging platform Weibo is , at its core, Twitter. It has changed a generation's voice. Over 50% of China's online population is now registered on Weibo--its users quadrupled in 2011, to more than 250 million. But Weibo is so much more. It is Twitter, plus Instagram, plus Tumblr, plus YouTube, plus Facebook. Its genius is that it recognized the improvements Twitter needed, incorporated pictures and video, and other ways to socialize in one mobile platform. Twitter's highest number of tweets-per-second in the U.S. was 9,420 during this year's NFL playoffs (thank you, Tim Tebow) while Weibo sent 32,312 in the first second of the Lunar New Year.

Weibo has surpassed RenRen, China's equivalent of Facebook, in registered users. RenRen has "only" 137 million.

Tencent QQ, the Chinese instant-messaging service, is the world's second-largest online community, outstripping earlier competitors such as MSN Instant messenger and AOL's AIM by leaps and bounds. It does what AOL's AIM pioneered, but with added avatars, games and retail and blogging capabilities. Maybe AOL would still be the online leader it once was had it "microinnovated" such as QQ.

Taobao, the largest online retail platform in Asia, mirrors eBay but with an Amazon-like service tacked on. It has a user experience and engagement that puts its Western cousins to shame. Crucially, Taobao has overcome one of the biggest hurdles facing any retailer in China--a lack of trust--by not processing a payment until the consumer receives goods. It reportedly now accounts for half of all packages posted in China, something neither eBay nor Amazon have come close to claiming in the U.S.

Population is the lazy reasoning given for the growth. With more than 1.3 billion people, China will win in sheer numbers every time. And with little competition because of regulation and censorship, it's easier for one platform to dominate the market. But that misses the point. In reality, the Chinese are evolving Western models, making them both more user-friendly and commercially viable. With the foundation laid (thank you, AIM, Twitter, eBay), the focus is on microinnovating--on moving quickly to further enable an increasingly technological society.

Some still dismiss China as out of touch with the culturally dominant West, but to see the effect these platforms are having on nearly 20% of the world's population is to realize that perhaps it's the 1 billion-plus English-speaking world that is not adapting quickly enough to user needs.

If the U.S. learns from the masters of microinnovation, game on. Or even game over. If it instead relies on invention alone, is it really such a stretch to imagine the giants of today, rather like the Netscape of yore, slipping quietly away? For now Facebook can be confident that China's internet concerns remain in China. But in the future? In oil, gas and transportation, China has proved adept at cracking foreign markets. So why not online? After all, as recent history warns, no one is too big to fail. Not even Facebook.

ABOUT THE AUTHOR
Wayne Arnold is global CEO and co-founder of Profero, the leading independent global digital agency.
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