MikePerry,directorofstrategicpartnershipsforDJI,presentsthecompany’snewdroneMavicAirinNewYorkonJanuary23XINHUANolongerasrareasthetermsuggests,unicornsareboomingandrevolutionizingtraditionalbusinessmodesaroundtheworld.Intheformofbeerorbubbles,thegrowthofsuchcompaniesisundoubtedlychangingtheinnovationlandscapeofmanycountries.
Aunicornreferstoastartupvaluedatover$1billion.AccordingtoareportreleasedinearlyJulybyCBInsights,aU.S.venturecapitalresearchinstitute,46morestartupsjoinedtheworldwideunicornteamin2018,and70percentofthemareeitherinChinaortheUnitedStates.Thetwocountriesarenowthemainsourcesofunicorns,leavingothercountriesfarbehind.
TheUnitedStateshaslongboastedthelargestnumberofunicornsintheworld,butChinahasseenthenumberofitsunicornsincreasingsince2014.Gallopingtoexplorenewmarkets,unicornsinbothcountriesaretakingdifferentshapes.Inthistwo-horserace,thetwolargestunicornincubatorshaveeachbecomeamirrorfortheother.
Distinctiveforms
UnicornsinChinaandtheUnitedStatesactuallysharesomecommonalities.Forstartupsinbothcountries,cutthroatcompetitionisareality.
AccordingtoGaoYuning,anassociateprofessorwiththeSchoolofPublicPolicyandManagementatTsinghuaUniversity,theU.S.patentpoolaimedatpromotingproductionmaybeabusedbybigcompaniestosqueezesmalleronesoutofthemarketthroughmonopoly.SmallstartupsinChinaalsohavetocompetewithtraditionalgiantstoblazeanewtrail.
Butanoticeabledifferencebetweenthetwogroupsofunicornsliesinrespectivebusinessforms.U.S.unicornsmainlyfocusonbusiness-to-business(B2B)modelswhiletheirChinesecounterpartshaveapreferenceforbusiness-to-consumer(B2C)models,providinglife-relatedservices,Gaopointedout.
Enjoyingafavorableenvironmentofcompletelegalsystems,standardregulationsandeffectiveincentives,manyU.S.unicornshavedevelopedB2Bbusinessmodelsbyprovidingprofessionalservicesinspecificfields.
“TheU.S.businessenvironmentencouragesthiskindofactivity.Itisveryeasyforthemtoregisterandapplyforapatenttoprotecttheirbusinessmodelsandideas,”GaotoldBeijingReview,addingthattheU.S.Governmentkeepsacloseeyeonthegrowthofdomesticunicorns.
Chineseunicornshavebeenpropelledbypreferentialpoliciesincludingmassentrepreneurshipandinnovationaswellaseconomicgrowth.However,somesmallstartupsarestillfacingproblemsarisingfromrelationswithlocalgovernments,banksandrelevantorganizations.
“OntheChineseside,ifsmallbusinesseswanttodoB2Bservicesorprovidetailoredservicestobigcompanies,thecostisrelativelyhigherthanthatintheUnitedStates,”Gaoadded.
Despitethisfact,manyconsumerorientedChineseunicornshavefoundawayoutthroughe-commerceservicesrelatedtoonlineshopping,transportationandevenentertainmentbyservingthepublic’sbasicdemands.AsGaopointedout,theseunicornsaretryingtomeetvariousdomesticdemandsasChinaisexperiencingaconsumptionupgrading.
IntheChineseunicornteam,thereareveteranssuchasonlinepaymentserviceproviderAntFinancialandsmartphonevendorXiaomi,alongwithstrongnewcomerslikePinduoduo,anonlinediscountshoppingplatform,whichwaslistedontheNasdaqinJuly.AsshoppingculturehasshiftedfromurbantoruralareasinChina,Pinduoduolookedtosatisfythedemandsofmorefrugalconsumersandhasquicklydevelopedintoagiantunicorn,atypicalexampleofhowChineseB2Cunicornstapintothedomesticmarketandachieverapidgrowth.
AccordingtoGao,existingbigplatformssuchasTaobaoandWeChatalsoallowsmallbusinessestoenterthemarketatlowcostsandhelpthemreachouttocustomers.
Consumersfromdifferentbackgroundshavealsoinfluencedunicornsinthetwocountries.AccordingtoYuGuangdong,co-founderofAlphaxPartners,aChineseventurecapitalfirm,theChineseB2CmarketisrelativelylargerthanthatintheUnitedStates,whichallowsunicornstotryoutdifferentproductstrategiesandgraduallyfindpositionsinthemarket.
Inaddition,comparedtotheirU.S.counterparts,Chineseconsumersaremorelikelytoquicklyacceptnewthings.“Forexample,mobilepaymentisnotthatpopularinothercountriesbutisahitinChina,”saidYu.
AmanscansaQRcodetobuycoffeethroughmobilepaymenttechnologyinKualaLumpur,Malaysia.Thetechnologyisco-developedbylocalmobilepaymentserviceproviderTouch‘nGoandChina’sunicorncompanyAntFinancialXINHUADifferentconceptions
DistinctentrepreneurshipinChinaandtheUnitedStatesisanotherinfluentialfactor.“U.S.unicornsaregoodatexploringsomethingnewandChineseonesaregoodatinductionanddeduction,”saidYu.Inhisview,thatismainlyduetoculturalandeducationaldifferencesinthetwocountries.
U.S.unicornstendtoexplorenewwaysofthinking,sincerevolutionarychangesarehighlyencouragedintheirculture.
Asarepresentativeinnovation-orientedunicorn,theleadingelectriccarmakerTeslahasdevelopedanentirelynewindustrialchain,changingpeople’stransportationhabitsaroundtheworld.Usually,manufacturing,salesandservicesareseparatedintraditionalcarindustrialchains,butTesladevelopedacompleteecosystemcombiningbatteryandcarmanufacturing,retail,chargingandaftersalesservices.Thus,afterdealsareclosed,buyerswillcontinuetobringprofitstothecompanybypayingforservices.
Incontrast,Chineseenterprisesgoodatfindingcommonalitiescanoptimizethemselvesrapidlyandmainlyfocusonlocaldemands.Throughenhancingefficiency,cuttingcostsandinteractingwithusers,manyChineseunicornshavegainedfootholdsinthedomesticmarketwherepeercompetitionisfierce,Yusaid.
However,itshouldbenotedthattherearesomeChineseunicornsthatarejumpingoutoftheboxandbreakingupthestereotype.
DJI,aleadinginternationaldronemakerfromChina,hasgrownrapidlyindomesticandoverseasmarketsduetoitsindependentresearchanddevelopmentandprofessionalservices.AnotherChineseunicornContemporaryAmperexTechnology,specializinginnewenergy,haswonglobalrecognitionandbecameabatterysupplierforGermany’sBMWthisyear.
AccordingtoGao,Chinaisgoodatturningideasintorealitybecauseofitslargetalentpool.Statisticsshowthattherearemorethan1.2millionChinesegraduatesmajoringinengineeringeveryyear.Still,Chineseunicornscouldalsoleapforwardbydevelopingmorerevolutionaryideasandmakinggroundbreakinginnovations,Yusaid.
Racingahead
Inaglobalizedmarket,transnationalcooperationonproductioniscommon,withsomecompanieshavingdesignsectorsinCaliforniaandproductionbasesinChina.
Forinstance,despiteChina-U.S.tradetensions,TeslaannouncedinJulythedecisiontosetupasuperfactoryinShanghai,markingthecity’sbiggesteverforeignfundedmanufacturingproject.AccordingtothecooperationmemorandumsignedbytheShanghaiMunicipalGovernmentandthecompany,theplantaimstoproduce500,000electricvehiclesayear.
Itisapparentthatthetwotypesofunicornsarebothstrivingtogoglobal.InYu’sview,manyU.S.unicornswithaninternationalvisionanduniversaldemandfinditeasytogoglobalbecausetheyonlyhavetoexpandtheirservicesbeyondpeopleintheUnitedStates.Incontrast,Chineseunicorns,mainlyservingdomesticconsumers’practicaldemands,needtoexploremoreaccesstoabiggermarket.AccordingtoareportcomparingChineseandU.S.unicornsissuedbyDeloittein2017,manyChineseunicornsarestillinadequatelyglobalizedwithlowvaluations.
Undeniably,therearealsoChineseunicornsperformingwellontheglobalstage,suchasXiaomi,thelargestmobilephonesupplierinIndia,andMusical.ly,avideosocialnetworkappthathasgoneviralamongU.S.teens.DevelopedinShanghai,theapphasbeenacquiredbytheChineseunicornByteDanceandhasbeencombinedwithitsexistingproducts.
Inabidtoentertheglobalmarket,Chineseunicornsshouldlearnmoreaboutlocallegalsystems,businessenvironments,culturesandconsumerhabitsinothercountriestoprovidelocalizedproductsandservices,Gaosaid.
InYu’sview,Chineseunicornsshouldalsochangetheirreality-orientedthinkingpatterns,makemorerevolutionaryinnovationsandturntheireyestoglobaldemands.
ForU.S.unicornsmiredindomesticcompetition,reachingalargermarketandsatisfyingpeople’sbasicdemandsmayalsohelpexpandtheirbusinesses.AccordingtoGao,ifU.S.unicornsintendtomaketheirbusinessesgrow,“Theyshouldservethepeopleoftheworld,notjustelitesintheUnitedStates.”
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