13 June 2018

The Rise of Digital: China Heats Up Competition in Europe

Through a formidable manufacturing base, the country set itself on a path to overtake the United States as the world’s largest economy.

The rise of China as an economic power is little secret, it has been the predominant story in geopolitics for the past decade. Through a formidable manufacturing base, the country set itself on a path to overtake the United States as the world’s largest economy.

It’s manufacturing prowess has often overshadowed what is a burgeoning digital economy with a rate of technological adoption amongst the wider population that has left many western commentators in shock. China’s astonishing digital transformation has laid the foundation for the country to become a global leader in technology across all fields with an enormous consumer market that is not resistant to change.

Progress in China is often ignored by the West until companies have grown to such a size that they aim for international expansion on a massive scale. Companies across Europe and North America will increasingly be forced to look East in the coming years to see where their main source of competition is coming from whether that be in the shape of Huawei in telecom or Alibaba in retail.

Here are three Chinese companies that are set to bring digital ingenuity to the Europe within the coming months.


It seems inevitable that society is heading down a path that will eventually result in cashless societies whereby all banking transactions are carried out via card or mobile devices. There is even a good argument to state that card payments would quickly become obsolete once mobile banking takes off.

Europe and North America have been moved cautiously in that direction with things such as Apple Wallet being tentatively adopted. China on the other hand has fully bought into the idea of mobile payments with Jack Ma’s Alibaba leading the way. The company overtook PayPal to become the world’s largest digital wallet. Alipay is operating in a market of enormous proportions with around 520 million registered users as of 2017.

The Chinese authorities have helped to expand the use of mobile pay by ensuring that apps such as Alipay can be used to pay for social security, transport and other public services. The size of the Chinese market has allowed the company to scale rapidly which makes it little surprise that it has now set its sights on foreign markets, launching in 37 countries in 2017. If the company is able to emulate its success across the globe then it could signal a great shift towards a real cashless society.

MooBike and Ofo:

Bike share schemes are nothing new, they have been the pride of great European cities like Paris, London and Amsterdam for years but if the market pattern in China is anything to go by then urban populations could be about to experience a dramatic change in the way they interact with the humble bicycle.

Chinese companies such as MooBike and Ofo have changed the market across the country by providing bikes that do not ave to be docked at specific locations in a city. They can instead be left anywhere and then picked up by the next rider using an app. It is a simple idea but one that has proved to be extremely successful.

These companies have created demand for their services seemingly out of thin air, picking up 70 million daily users since their inception two years ago with a total of 400 million registered users in total.

Their easily recognisable bikes are already popping up in cities around the world and this is a theme that will only continue as the companies count the aforementioned Jack Ma amongst their investors as he uses the bike hire scheme to expand the usage of Alipay across the globe.

Didi Chuxing:

Uber changed the nature of transport in cities across the western world by providing cheap and user friendly ride hailing service. Their expansion was considered unstoppable until their failed venture into the Chinese market where they were beaten by local rival Didi Chuxing whose core business model is very similar to that of Uber but is also striving to provide additional options to provide a more complete service than its competitors. The company so far can handle ride hailing, car hire, bike sharing and a designated driver service for partygoers.

Having bought out Uber in China at a vast cost, the company is now on the attack as it expands into Latin America, Australia and Japan with an aggressive investment strategy aimed at taking advantage of Uber at a time where it is retreating from some foreign markets.

The war between the two is likely to heat up this year and eventually spill over into Europe as the Chinese company looks to reach agreements with ride hailing apps across the globe in order to put the pressure on Uber.

A Warning for the West

Europe and North America have often wrongly assumed that they hold a monopoly over technological innovation, however the growth of massive Chinese tech giants should serve as a warning that the competition within digital is heating up more than ever with eastern companies increasingly looking towards markets that are ripe for disruption. The companies listed above have grown at an astonishing pace to fundamentally change the landscape of the sector they're operating in. The threat facing European and North American businesses might not even be a reality yet but evdience coming from China increasingly shows that an idea can become an economic giant in the blink of an eye.