INSUBCONTINENT EXCLUSIVE:
Hello and welcome back toTechCrunch China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people
This week, a post from Sequoia Capital sounding the alarm of the coronavirus impact on businesses is reaching far corners of tech
communities around the world, including China.
Many echo Sequoia observation that the companies that are the &most adaptable& are the
Others cling to the hope of &[turning] a challenging situation into an opportunity to set yourself up for enduring success.
Two weeks ago I
wrote about how the private sector and the government in China are working together to contain the epidemic, bringing a temporary boost to
This week I asked a number of investors and founders which of these changes will stand to last, and why.
B2B on the rise
The
business-to-business (B2B) space was rarely a hot topic in China until online consumer businesses became relatively saturated in recent
And now, the COVID-19 epidemic has unexpectedly breathed life into the once-boring field, which stretches from virtual meetings, online
education, digital healthcare, cybersecurity, telecommunications, logistics to smart cities, analysis from investment firm Yunqi Partners
shows.
For one, there is an obvious opportunity for remote collaboration tools as people work from home
Downloads of indigenous work apps like Dingtalk, WeChat Work, TikTok sister Lark as well as America Zoom jumped exponentially amid the
While some argue that the boom is overblown and will dissipate as soon as businesses are back to normal, others suggest that the shift in
behavior will endure.
Like other work collaboration services, Zoom soared in China amid the coronavirus outbreak, jumping from No
180 in late January to No
28 as of late February in overall app installs
Data: App Annie
People are reluctant to change once they form a new habit,& suggests Joe Chan, partner at Hong Kong-based Mindworks Ventures
The virus outbreak, he believes, has educated the Chinese masses to work remotely.
Meeting in person and through Zoom both have their own
merits, depending on the social norm
Some people are used to thinking that relationships need to be established through face-to-face encounters, but those who don''t hold that
view will have fewer meetings
[The epidemic] presents a chance for a paradigm shift.
But changes are slow
Growth in enterprise businesses might be less visible than what
China witnessed over the SARS epidemic that fueled internet consumer verticals such as ecommerce
That because software-as-a-services (SaaS), cloud computing, health tech, logistics and other enterprise-facing services are intangible for
most consumers.
Compared to changes in consumer behavior, the adoption of new technologies by enterprises happen at a slower pace, so the
impact of coronavirus on new-generation innovations [B2B] won''t come as rapidly and thoroughly as what happened during SARS,& contended
Jake Xie, vice president of investment at China Growth Capital.
Xie further suggested that the opportunities presented by the outbreak are
reserved for companies that have been steadily investing in the field, in part because enterprise services have a longer life cycle and
require more capital-intensive infrastructure
&Opportunists don''t stand a chance,& he concluded.
As for changing consumer behavior, such as the uptick in grocery delivery usage by
seniors trapped indoors, the impact might be short-lived
&The only benefit that the epidemic brings to these apps is getting more people to try their services
But how many of them will stay? The argument that people will keep using these apps over concerns of getting sick in offline markets is
The strength of a business lies in its ability to solve user problems in the long term, for example, providing affordability and
convenience,& suggested Derek Shen, chairman of Danke Apartment, the Chinese co-living startup slated to list on NYSE.
Summoned by
Beijing
The adjacent sector of enterprise services — at-scale technologies tailored to energizing government functions — has also seen
traction over the course of the epidemic
Private firms in China have teamed up with regional authorities to better track people movements, ramp up facial recognition capacities
aimed at a mask-wearing public, develop contact-free consumer experience, among other measures.
Tech firms touting services to the
government are no stranger to criticisms concerning the lack of transparency in how user data is used
But the appeal to private firms is huge, not only because state contracts tend to provide a steady stream of long-term revenue, but also
that certain public-facing projects can be billed as a fulfillment of corporate social responsibilities
Following the virus outbreak, Chinese tech companies of all sizes hastened to offer contributions, with efforts ranging from making monetary
donations to building tools that keep the public informed.
On the flip side, the government also needs private help in emergency management
As prominent Chinese historian Luo Xin poignantly pointed out in podcast SurplusValue recent episode [1:00:00], some of the most efficient
and effective responses to the public health crisis came not from the government but the private sector, whether it is online retailer
JD.com or logistics firm SF Express delivering relief supplies to the epicenter of the outbreak.
That said, Luo argued there are signs that
some local authorities& tendency to centralize control is getting in the way of private efforts
For example, some government offices have stumbled in their attempts to develop crisis management systems from scratch, overlooking a pool
of readily available and proven infrastructure powered by the country tech giants.
