How China is competing for digital innovation leadership

By Paul Mah

Once known for its cheap copycat products, China has gone a long way since then and evolved into a powerhouse in the digital arena. And according to a new report titled “Walled garden no more: Digital China goes global” from Forrester Research, Digital China is at the forefront in fields ranging from mobile innovations and artificial intelligence (AI).

What are some of these areas, and how can marketers in the region react?

Leader in social and mobile innovations

Despite having its roots in the West, there is no question that China is now ahead when it comes to social and mobile innovations, with Internet juggernauts such as Alibaba and Tencent clear leaders in their respective fields.

Tencent operates social media platform WeChat, arguably the world’s most sophisticated mobile messaging platform in terms of sheer breadth of capabilities. As we noted last year, WeChat dominates most lives in China, from collaborating and socializing to e-commerce and paying your bills.

Elsewhere, Alibaba takes the lead in digital commerce, banking, and wallet innovations like overseas tax refund services, says Forrester. Together, these platforms provide more sophisticated features to both consumers and marketers than their global counterparts.

Aggressive investment in new technologies

While innovations from the West often make the news on English publications, China is moving aggressively when it comes to investing in new technologies. Indeed, China is a top investor in technologies such as virtual reality (VR), drones, and autonomous vehicles.


This didn’t happen by chance but is the result of a deliberate and methodical approach to investing in technology.

Specifically, China has budgeted over US$2 billion for major research and development programs this year, according to the Ministry of Science and Technology (MOST).

On the private sector, new technologies such as Zanadu’s VR travel experience store can be leveraged to engage Chinese consumers and travelers, says Forrester. You can learn more about how the store offers 360-degree VR experiences through the use of VR head-mounted displays to showcase hotels, destinations and activities here.

An eye on the AI crown

When it comes to AI, Internet giants like Baidu and Alibaba are pouring money into AI research and hiring top scientists, on top of the Chinese government’s investments to make the country a global forerunner in the field by 2030, says the report.

Already, AI is implemented heavily for marketing initiatives and to better understand the more than 700 million Internet users in China. As noted in a separate research report titled “Big Data in Chinese Businesses” earlier this year, this treasure trove of data is powering more accurate predictive models, richer analysis – and serving to support more advanced machine learning and deeper learning techniques.

Certainly, investors have taken note of the push towards AI. A Financial Times report earlier this year noted that almost half the global investment into AI startups went to China in 2017 – a dramatic increase from the 11.3 percent recorded the year before.

How marketers can react?

So how can marketers in Southeast Asia (SEA) react? According to Forrester Research’s senior analyst Xiaofeng Wang, China’s digital giants are armed with massive digital innovations in the areas of e-commerce, social media and mobile payments. And they are gearing up to fight their U.S. counterparts for global digital dominance with Southeast Asia being the first battlefield.

“As consumers increasingly use digital platforms backed by Chinese players, marketers in SEA must consider additional avenues for digital advertising, work with new data and tech partners, and move quickly to learn how to harness the new digital ecosystem,” she wrote.

And other than taking advantage of the new avenues and platforms for spending their digital advertising dollars, marketers must be prepared to work with new technology partners and data in a new digital ecosystem heavily influenced by the Chinese digital players.

Finally, they must also upgrade their loyalty program in order not to be left behind.

You can read additional findings from the report here (paid report).