18.06.2015

China and India: trendsetting economies

Image | Flickr

This summer the Mobile World Congress Shanghai, the ‘brother’ of the Barcelona event, will be held  in the Chinese megalopolis. From July 15 to 17 the eyes of many mobile tech fans will be fixed on Asia. There are two economic giants on this continent, India and China. With a promising future in mobility they may help to set trends for the West.

China’s strength in the mobile world is demonstrated by one of its apps: WeChat, a sort of local WhatsApp. More than just an instant messaging app, it permits money transfers, like Yaap Money, and allows users to watch movies. In fact, 41% of viewers of the controversial documentary ‘Under the Dome’, on air pollution in China, saw it through this platform. WeChat also gives its users access to government services in Shanghai, which are used by 549 million people. The app allows users to make an appointment to renew their passport, pay gas bills and check the weather forecast. In other words, a single application contains what we usually see between several. Time to take notes?

In addition to this, China has established itself as a country with a strong presence in electronic commerce. As stated in the the annual report on Internet trends of Mary Meeker, a consultant from Kleiner Perkins Caufield & Byers (KPCB), according to estimates, online stores Mogujie and Meilishuo together made more than $2 billion (more than 1,760 million euros) in 2014 with a community of 200 million users. Clothes are not the only popular e-commerce product in China; in the last quarter of 2014 the delivery of ready meals accounted for nearly $1 billion in sales.

We can’t forget the positive image that the mobile phone brands are creating for themselves worldwide. In 2013, more than 1.2 billion mobile phones were manufactured in China; the company Xiaomi went from 19 million mobile phones sold worldwide in 2013 to 61 million in 2014. This figure not only demonstrates the incredible levels of domestic consumption, but also why many are keeping their eyes on the giant. During the last Mobile World Congress in Barcelona ZTE introduced an eye-scanning mobile phone and Huawei got ahead of other tech companies by presenting a smartwatch and a smartband.

It’s also worth noting that, in the West, many want the One Plus One, considered one of the best phones on the market that until now could be purchased only with an invitation. With an Android-based operating system, Time magazine described it as a “phone of dreams“: 3GB of RAM, 5.5-inch screen, 64GB of internal storage, 2.5 GHz quad-core … all while less expensive than others of the same quality. The question now is if all these brands and products will remain popular among Western consumers.

India is also showing its potential

mary_meekerImagen | KPCB

This report asks whether, after the wide expansion of Internet throughout China, its Indian neighbor will go through the same experience. There are plenty of reasons for this: India’s penetration curve follows the same line as that of China, as can be seen in the above graphic. With 232 million users (63 million of whom were ‘new’ in 2014), it is the third largest Internet market globally; first in WhatsApp usage, with 70 million users (the same as YouTube), and second in Facebook and LinkedIn. Almost a year ago, Amazon announced an additional investment of $2 billion in the country: no other nation before had managed to obtain $1 billion in gross sales, they explained, so they had to continue expanding.

But the country has more than foreign tech companies. A few months ago we learned about a small startup that drew the attention of investors from Silicon Valley with Teewe, an Indian Chromecast. With over 10,000 units sold, it is cheaper than the Google device and runs on Android, iOS, Windows, Mac, Linux and Chrome. Its function is the same: it allows you to see the contents of your tablet or smartphone on any television.

With new venture capital funds from Sequoia Capital (US) and Quotient (India), India is seeking to develop new capabilities with a focus on music and audio services. Will they be able to attract more foreign capital? And above all, will other countries be encouraged to create these kinds of mobile devices?

Another important fact is that 65% of Internet traffic in India is mobile, behind only Nigeria (76%), as the study reveals. This gives an idea of the importance of apps and portable devices in the country which account for 41% of e-commerce sales.

With these figures and the experiences of Amazon or WeChat, many companies will plan new strategies aimed at mobile applications and e-commerce in these areas. Citizens of both countries have shown they can manage with ease and, above all, that there are more and more people connected to the Internet. As both countries are a part of BRIC (Brazil, Russia, India and China), the group of emerging economies, it would be ironic if they ended up leading the way in how we use technology.