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China, not Silicon Valley, is cutting edge in mobile tech

The Chinese app WeChat has long used QR codes to let people pay for purchases and transfer money. It also lets users hail a taxi or order a pizza without switching to another app.
The Chinese app WeChat has long used QR codes to let people pay for purchases and transfer money. It also lets users hail a taxi or order a pizza without switching to another app.Siphiwe Sibeko/REUTERS

HONG KONG — Snapchat and Kik, the messaging services, use bar codes that look like drunken checkerboards to connect people and share information with a snap of their smartphone cameras. Facebook is working on adding the ability to hail rides and make payments within its Messenger app. Facebook and Twitter have begun live-streaming video.

All of these developments have something in common: The technology was first popularized in China.

WeChat and Alipay, two Chinese apps, have long used the bar-codelike symbols — called QR codes — to let people pay for purchases and transfer money. Both let users hail a taxi or order a pizza without switching to another app. The video-streaming service YY.com has for years made online stars of young Chinese people posing, chatting, and singing in front of video cameras at home.

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Silicon Valley has long been the world’s tech capital: It birthed social networking and iPhones and spread those tech products across the globe. The rap on China has been that it always followed in the Valley’s footsteps as government censorship abetted the rise of local versions of Google, YouTube, and Twitter.

But China’s tech industry — particularly its mobile businesses — has in some ways pulled ahead of the United States. Some Western tech companies, even the behemoths, are turning to Chinese firms for ideas.

“We just see China as further ahead,” said Ted Livingston, the founder of Kik, which is headquartered in Waterloo, Ontario.

The shift suggests that China could have a greater say in the global tech industry’s direction. Already in China, more people use their mobile devices to pay their bills, order services, watch videos, and find dates than anywhere else in the world. Mobile payments in the country last year surpassed those in the United States. By some estimates, loans from a new breed of informal online banks called peer-to-peer lenders did too.

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China’s largest Internet companies are the only ones in the world that rival America’s in scale. The purchase this week of Uber China by Didi Chuxing after a protracted competition shows that at least domestically, Chinese players can take on the most sophisticated and largest startups coming out of America.

Industry leaders point to a number of areas where China jumped first. Before the online dating app Tinder, people in China used an app called Momo to flirt with nearby singles. Before Amazon chief executive Jeff Bezos discussed using drones to deliver products, Chinese media reported that a local delivery company, S.F. Express, was experimenting with the idea. WeChat offered speedier in-app news articles long before Facebook, developed a walkie-talkie function before WhatsApp, and made major use of QR codes well before Snapchat.

Before Venmo became the app for millennials to transfer money in the United States, both young and old in China were investing, reimbursing each other, paying bills, and buying products from stores with smartphone-based digital wallets.

“Quite frankly, the trope that China copies the US hasn’t been true for years, and in mobile it’s the opposite: The US often copies China,” said Ben Thompson, the founder of the tech research firm Stratechery. “For the Facebook Messenger app, for example, the best way to understand their road map is to look at WeChat.”

Between fees for its services and money it makes through online games, WeChat manages to generate $7 in revenue per user each year, according to Nomura. The app has roughly 700 million users, more than the total number of smartphone users in China, in part because some users are outside the country and in part because people have multiple accounts.

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Much of that comes not from ads, as it might in the United States, but from spending on games, services ,and goods sold on the app. Those models may not translate from one market to the other, but the two can still borrow from each other, said Carmen Chang, a partner at the venture capital firm New Enterprise Associates.