China to keep lead over West in developing consumer technologies, says UBS

SCMP

China will continue to lead the world in disruptive business-to-consumer technologies
as it mines the commercial benefits of its vast e-commerce and social media platforms,
according to UBS.

The country’s investments in research and development in those fields and other
disruptive technologies are on track to surpass spending by the United States
next year, analysts at the Swiss global financial services firm said.

“In a lot of these consumer-based technologies, China is far better than the West,
” said UBS equity analyst Sundeep Gantori at a briefing on the sidelines of the
company’s Disruptive Technology CEO Summit on Tuesday.

“Look at the way Chinese companies have monetised social networking apps, which is
something that global companies are still struggling with.”

Tencent Holdings, the world’s largest video game company by revenue, provides the
best example of such commercial success with its social media and messaging platforms,
WeChat and QQ, which had a combined 963 million monthly active users in the quarter
ended June 30.

Since its launch in 2011, WeChat has evolved into a must-have mobile app on the
mainland, used for an array of activities, from shopping and getting food delivered
to booking a doctor’s appointment and paying bills.

Gantori pointed out that China’s e-commerce market leads that of the United States
in the fast-growing online grocery segment.He estimated that China’s online grocery
sales have penetrated about 5 per cent of the domestic market, compared with around
1 per cent in the US.

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