FT'S LEX COLUMN
THE LEX COLUMN: China’s big tech firms learn the hard way
Companies pioneer new models but fall into the same rut of cash burn and failed IPOs
The Chinese copycat has turned innovator. China, once the home of pirated DVDs and lookalike gadgets, has proved a trailblazer for many in Silicon Valley. Its integrated payments apps have been imitated by Facebook and Google. The super app concept given birth to by China’s WeChat is being aped by Uber (via Southeast Asian wannabes such as Grab and Gojek). But the most copied Made in China features last year were spectacular cash burn and initial public offering (IPO) flops.
China rivals the US when it comes to unicorns; the Chinese-based Hurun Institute puts China ahead by a whisker with 206. These include some of the world’s biggest, including Ant Financial, the payments affiliate of tech giant Alibaba, and ByteDance. Several have characteristics shared by a later breed of US tech start-ups. These have included SoftBank funding that helped grant them larger-than-life valuations.