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Chinese tech companies are just starting to go global, VC says


Ben Harburg, managing associate at MSA Capital speaks to CNBC’s Evelyn Cheng on the annual East Tech West retreat within the Nansha district of Guangzhou, China on Dec. 1, 2021. Harburg mentioned Chinese language tech corporations’ ambitions to go world.

CNBC

GUANGZHOU, China — Chinese language expertise corporations are contemplating increasing abroad a lot earlier of their lifecycles, a enterprise capitalist informed CNBC — marking a shift in perspective amongst companies on the earth’s second-largest financial system.

That shift has been prompted partly by China’s tighter regulatory scrutiny on expertise as properly aggressive stress in sure sectors, in accordance with Ben Harburg, managing associate at enterprise capital agency MSA Capital.

“It is also forcing Chinese language corporations a lot earlier of their lifecycle to consider going world,” Harburg stated at CNBC’s annual East Tech West convention in Nansha, south China.

Learn extra about China from CNBC Professional

Harburg stated that just a few years in the past, his enterprise capital agency was working with social media or cross-border e-commerce corporations that had been extra mature. However right this moment, early-stage corporations in sectors from synthetic intelligence to well being care are going world or “fascinated with plotting their globalization technique,” he stated.

Such Chinese language companies may discover that their enterprise fashions work in rising markets, particularly, Harburg stated.

“Our view was that Chinese language enterprise fashions are world finest practices, particularly for rising markets, as a result of the way in which that Chinese language customers have advanced with expertise is rather more paying homage to the way in which the subsequent wave of customers in India and Pakistan and Egypt and in Nigeria, and Brazil, will interact with expertise,” he stated.

There are solely a handful of examples of Chinese language expertise companies discovering success abroad prior to now. However in more moderen occasions, there was an increase in China-based tech corporations rising their worldwide companies.

Beijing-based Xiaomi is now the third-largest smartphone participant by market share globally — due to large beneficial properties in India. Chinese language tech big ByteDance’s quick video app TikTok has a billion month-to-month customers globally.

Chinese language trend model Shein has additionally caught on with younger Western customers.

In the meantime, giants like Alibaba and Tencent proceed to increase their abroad companies.

“I believe perhaps there’s the notion that that is, you realize, that is sort of the top of China’s enlargement into these markets,” Harburg stated.

“However our view is that that is simply the tip of the spear, and that there’s a lengthy tail of Chinese language constructed corporations addressing monetary companies, schooling, well being care, and different social functions in each rising markets and even in additional mature markets.”



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