China has a vast and growing market for the Internet and mobile devices. Over the past decade that market has been largely confined to China – most businesses have had enough domestic demand and opportunities inside the country to keep them busy.
But now companies in China’s dynamic Internet and mobile sector are seeking out new markets outside the country. Both online shopping service Alibaba (alibaba.com) and Weibo (weibo.com), the Chinese version of Twitter (twitter.com), are seeking to list on the New York Stock Exchange. The excitement this news has generated shows how many people want to get a piece of the large Chinese market for technology, social networks and online shopping. It is also sending a chill through America’s Silicon Valley – home to the country’s innovative high technology sector – that they are missing out on China’s fast-growing marketplace. Many American services are banned from operating in China. Even more worrying for Silicon Valley, these home-grown Chinese companies, with the market sewn up at home, are now set to compete globally for customers using their increasingly deep pockets.
One example is Tencent (http://www.tencent.com/en-us/index.shtml), owner of popular Chinese social messaging application (app) Weixin (weixin.qq.com), known as WeChat (wechat.com) outside China. Used on mobile phones and smartphones, Weixin has gained 300 million users in just three years, becoming the dominant social messaging service in the world’s largest smartphone market. Its has been so successful that many rivals are trying to chip away at its customer base.
Weixin, pronounced way-shin, allows smartphone users to send messages and share news, photos, videos and web links with friends. One of its selling points is its claim to not store messages on its servers.
Building on its success in social networking in China, it is looking to expand in other markets, including Southeast Asia, Europe and Latin America. It also wants to grow its offerings in online payment and e-commerce.
One factor in Weixin’s success is the ability to send messages by recording a voice message rather than just typing in characters: very useful for non-Latin script users, and especially for Chinese-language users, who use thousands of characters in everyday communication.
One ambitious forecast claims Weixin could reach 400 million users and make US $500 million revenue within a year.
Cosmetics marketer Jenny Zhao, who uses an iPhone 5, told The New York Times: “I’m probably on Weixin six hours a day. A lot of what I do revolves around it.”
“I use Weixin every day,” said Zhang Shoufeng, a food and drinks seller. “My friends are on it and my boss is on it. We are talking about where to eat, where to hang out and where to meet for company conferences. This is how we communicate.”
Analysts believe Weixin has benefitted from not having to compete with banned-in-China American company Facebook (facebook.com).
“Even if Facebook had permission, it’s probably too late,” said Wang Xiaofeng, an analyst at Forrester Research. “Weixin has all the functionality of Facebook and Twitter, and Chinese have already gotten used to it.”
Tencent is an example of a wider trend: As Chinese companies and offerings have become stronger, wealthier and more innovative, they increasingly look to build their customer base outside China.
Founded in November, 1998, Tencent, Inc. has grown into China’s largest and most used Internet service portal. Its most popular services include QQ (QQ Instant Messenger), WeChat, QQ.com, QQ Games, Qzone, 3g.QQ.com, SoSo, PaiPai and Tenpay, as well as Weixin.
The company claims to put innovation at the heart of its business, with more than half of its employees devoted to research and development. The Tencent Research Institute, established in 2007 with RMB 100 million (US $16 million), calls itself “China’s first Internet research institute, with campuses in Beijing, Shanghai, and Shenzhen.” It has patents for technologies it has developed for instant messaging, e-commerce, online payment services, search, information security, and gaming.
Tencent was driven to innovate by a fear it could quickly become irrelevant in the information technology space. Weixin is also pioneering ways to book taxis, hotels and airline flights through the service and even ways to control home appliances.
“Chinese Internet companies are no longer behind,” said William Bao Bean, a managing director at the venture capital firm SingTel Innov8 (http://innov8.singtel.com/). “Now in some areas, they’re leading the way.”
Published: April 2014
Resources
1) Weibo: Sina Weibo is a Chinese microblogging (weibo) website. Akin to a hybrid of Twitter and Facebook, it is one of the most popular sites in China, in use by well over 30 per cent of Internet users, with a market penetration similar to what Twitter has established in the USA. Website: weibo.com
2) Laiwang: A variation on the WeChat service, its biggest competitor. Website: laiwang.com
3) WhatsApp: WhatsApp Messenger is a cross-platform mobile messaging app which allows you to exchange messages without having to pay for SMS. Website: whatsapp.com
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
Awareness of the sourcing of materials for fashion has been on the rise in the past decade. Concerns about how the global fashion industry functions and its impact on the environment have given rise to savvy retailers who take care over the sourcing of their materials and the working conditions of their employees. Consumers have shown a willingness to pay a little more to know that a garment is sustainably produced and has the lowest possible impact on the environment.
The global textile industry is the second biggest consumer of water in the world. The dyeing processes used by these manufacturers do extensive damage to the water table that is used for drinking water.
In China, there have been violent demonstrations over working conditions and increasing concern over the health consequences of many modern manufacturing methods. In order to get change, new business models need to emerge, and consumers and customers need to be educated and to demand better-quality, low- or non-polluting products.
One business has accomplished something remarkable: it has succeeded in producing high-quality, ethically sourced products while also employing vulnerable people who have significant care duties and need a flexible and understanding employer.
NuoMi (http://www.nuomishanghai.com) has three stores and a store/design studio in Shanghai, China. NuoMi means “sticky rice” in Mandarin (http://en.wikipedia.org/wiki/Mandarin_Chinese). It was founded by Filipino fashion designer Bonita Lim, a mother of four, who uses her business to help single mothers and the less fortunate.
NuoMi is also pioneering sustainable and green goods for the Chinese market. This is unusual in a country more known for its sweatshop, low-wage manufacturing industries that have propelled the country into an economic powerhouse.
NuoMi sells women’s clothing made from sustainable sources while creating jobs for people from disadvantaged communities. There are organic cotton, bamboo, silk and wool garments, and no artificial dyes or synthetic materials are used.
The design team works on colourful knitwear, dresses and baby clothes. They also offer a custom order service.
“When I was 13 or 14 years old, I dreamed of building a special company that could help people who have trouble finding a job,” Lim told the Global Times.
“I called the name of my brand NuoMi, which is (the) Chinese name for sticky rice … Our company works like sticky rice; we support and love each other.”
Born in the Philippines and educated in Canada, Lim had become frustrated while working with the Filipino government and wanted to help the poor. She started NuoMi in 2006 in Shanghai, a city booming as China’s economy continues to grow. It is also a city with a population with long-standing sophisticated consumer tastes. Shanghai had been home to various foreign concessions before the Communists took power and its population was exposed to foreign languages, cultures and tastes.
Lim became a single mother after she divorced, and this experience made her sympathetic to how hard life is for single mothers. Drawing on her passion for fashion, she hired a designer to work with her on designing a line of clothing.
“I was surprised that many of my friends really liked my designs, so they asked me to design clothes for them and introduced some clients to me,” Lim told Global Times. “I tried to design and sell clothes abroad. I got a lot of good feedback, but it exhausted me so I decided to work in Shanghai.”
Despite starting out as a hobby, the business had built a network of 20 clients. It had become impossible to just do it part-time so she formalised the business as NuoMi. She began hiring single mothers in prison in the Philippines and designed clothing that could be easily made by them.
“Those single mothers in prison were very anxious because they had no way to help their children. Most of them committed crimes because they needed money for their kids,” Lim said.
By 2008 she had built a professional design team and now had 60 clients. With the brand NuoMi growing, she opened its first store. This has grown to four stores in Shanghai. Most of the company’s workforce is now in Shanghai but they are still people living in a vulnerable situation.
Nuomi’s newly opened store in 2008 carried a spring and summer collection of long dresses made from bamboo, cotton and soya. These fabrics were chosen for their breathability in the hot, steamy Shanghai weather.
One of the employees is 52-year-old Zhu Linfang, who takes care of a stroke-damaged father and a mother with liver cancer. “I was introduced through a friend. They paid me more than other companies. At my age almost no company wants to hire me, but working for NuoMi, I earn between 2,000 yuan (US $300) and 3,000 yuan per month,” she said.
Other employees look after ill children and have care duties that occupy much of their time. They do sewing and make toys for NuoMi.
Lim takes the time to train the employees to make sure they can do the work to a high standard.
“I tried to design products that were both suitable for them to make and could be sold in the market,” she said.
NuoMi also sells environmentally friendly glycerine soaps in flavours from mango to chocolate, jewellery made from recycled industrial materials and bathwear, pillows, and purses. The stores even carry matching mother-daughter and father-son clothing.
Wisely, service is offered in Chinese and English to customers – Shanghai is a popular destination for tourists. NuoMi is clearly a trail-blazer and a business to watch.
Resources
1) Ecodesignfair: Eco Design Fair is a bi-annual grass-roots community event whose purpose is to showcase eco-conscious designers and products to general consumers. Website:http://www.ecodesignfair.cn
Drones – unpiloted aircraft, formally called Unmanned Aerial Vehicles (UAV) or Unmanned Aircraft Systems (UAS) – have long been used for military purposes. The U.S. military claims to have 7,500 drones – a massive growth from just 50 a decade ago – and has used them for surveillance and combat in conflicts from Afghanistan to Iraq.
Drones can cost anywhere between a few thousand and millions of dollars depending on their size and sophistication. Some weigh as little as half a kilogram, and the largest can reach 18,000 kilograms (19 tons).
It is estimated 40 countries around the world are working on drones in one capacity or another.
Military drones come with ominous-sounding names such as Predator, Fire Scout, Global Hawk and Hunter. But many pioneers and innovators are setting out to prove drones can be a technology of peace and development and not just of fear and war.
In Shanghai, the InCake bakery has used drones to deliver cakes (http://www.youtube.com/watch?v=fXwgwSkujOY). The service was brought to a halt after complaints from citizens, worried the drone would crash into someone.
These may prove to be novelty experiments – or the early days of a revolution. Time will tell.
But serious thinking about drones is taking place in the area of development.
One pioneering company thinks it has a solution for two big problems common to many developing countries: the chaos, congestion and crowding that clog urban areas; and the poor or non-existent infrastructure in rural areas. Both problems make it expensive and time-consuming to move goods around.
A billion people in the world do not have access to all-weather roads, says the World Bank. Some roads are being upgraded in parts of sub-Saharan Africa but many are in worse shape than they were decades ago. Modern infrastructure is expensive to build, and the funds to do it often must be borrowed.
A startup called Matternet thinks it has the solution to getting around this problem in Africa, and in rapidly growing cities of the global South. It believes drones can come to the rescue where infrastructure is poor or non-existent, and save valuable wealth that can be diverted to real improvements in human development, or used to reduce congestion in crowded urban areas.
The Matternet (http://matternet.us/) is billed as “the next paradigm for transportation.” Matternet is offering a system and a concept for deploying drones as a scalable solution to overcome the problem of poor transportation networks in developing countries.
The artist’s vision on Matternet’s website shows drones buzzing their way through an urban high-rise landscape as they go about their business.
The Matternet drone design has two wings with three fans in each wing to allow it to take off and land vertically as well as flying in a straight line. There is a 10 litre space for packages and a rechargeable battery at the bottom of the drone. The drones can fly at 40 kilometres an hour, at an altitude of up to 121 metres and are guided by GPS (Global Positioning System) (http://en.wikipedia.org/wiki/Global_Positioning_System).
The drone moves in and out of a ground-station landing pod, where it is recharged, picks up new packages to deliver, and connects electronically to receive instructions. An entry and exit slot sits on top of the pod while there is a place at ground level for people to pop in packages for delivery.
Each vehicle costs US $1,000 and can last 10 years, the makers claim. Matternet believes the drones could transport 2 kilograms over 10 kilometres for just 24 US cents a trip.
Matternet’s Andreas Raptopoulos (https://www.solveforx.com/moonshots/physical-transport) hopes to push Africa away from simply upgrading its infrastructure along the lines of what is already in existence in developed countries. It is estimated it will take Africa another 50 years to have an infrastructure equal to North America. But why wait so long? Why not, he argues, just use drones or UAVs to knit a transport infrastructure criss-crossing the continent delivering goods and services to people?
Radical drone advocates like Matternet are very ambitious. They believe drones are to infrastructure what mobile phones have been to telecommunications: an advanced, 21st-century technology that enables countries to leapfrog ahead of old-school 20th century infrastructure and connect people up for much less cost and effort.
Imagine a city in the global South 15 years from now: canyons of high-rise buildings stretch from the central business district out to the suburbs where apartment towers replace office buildings. And whooshing through these canyons will be the drones carrying everything from takeaway food to medical supplies to the latest fashion items.
Anywhere in Africa can currently contact Matternet to arrange a trial of the technology (http://matternet.us/get-matternet/). The concept had field trials in the Dominican Republic and Haiti in the Caribbean. A large field test trial is being arranged for Lesotho, where the drones will help with delivering supplies to clinics serving patients with HIV/AIDS. The 47 clinics are spread out over a 138 square kilometre area and will be served by 50 ground stations and 150 drones at a cost of US $900,000. In comparison, building 2 kilometres of a single lane road would cost US $1 million.
Matternet is based in Palo Alto, California and founded by partners Andreas Raptopoulos, Paola Santana, Dimitar Pachlov and Darlene Damm.
It was conceived at the Singularity University (http://singularityu.org/) whose mission is to educate, inspire and empower leaders to apply exponential technologies to address humanity’s grand challenges.
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
Southern Innovator was initially launched in 2011 with the goal of – hopefully – inspiring others (just as we had been so inspired by the innovators we contacted and met). The magazine seeks to profile stories, trends, ideas, innovations and innovators overlooked by other media. The magazine grew from the monthly e-newsletter Development Challenges, South-South Solutions published by the United Nations Office for South-South Cooperation (UNOSSC) since 2006. A selection of books and papers citing stories from the magazine are featured below to aid researchers, in particular those interested in health and human development and the role of innovators in international development.
The first five issues of Southern Innovator from 2011 to 2014. Called a “Beautiful, inspiring magazine from UNDP on South-South innovation.”
“Innovation is critical to growth and development in Africa. In the context of a continent characterized by fast growing economies as well as an array of socioeconomic challenges, such as high levels of poverty and inequality, innovation in Africa must be understood in an encompassing manner. Africa needs to support the emergence of its own Silicon Valleys, but it must also foster the invention and adoption of cleaner technologies that limit respiratory illnesses, deforestation and combat climate change. This book contains a number of analytical case studies that examine the nature and origins of emerging high-end innovation hubs in Africa. These “hubs” or ecosystems are both understudied and little known inside and outside the continent. With this analysis, the book highlights and draws lessons from some of the most promising and successful innovation cases in Africa today, exploring the key factors driving their successful emergence, growth and future prospects. Relevant for scholars, policymakers, and business leaders, the book provides both inspiration and useful policy advice that can inform strategies and concrete measures to speed up the pace of innovation in Africa today.”
“Research on gated communities is moving away from the hard concept of a ‘gated community’ to the more fluid one of urban gating. The latter allows communities to be viewed through a new lens of soft boundaries, modern communication and networks of influence.
The book, written by an international team of experts, builds on the research of Bagaeen and Uduku’s previous edited publication, Gated Communities (Routledge 2010) and relates recent events to trends in urban research, showing how the discussion has moved from privatised to newly collectivised spaces, which have been the focal point for events such as the Occupy London movement and the Arab Spring.
Communities are now more mobilised and connected than ever, and Beyond Gated Communities shows how neighbourhoods can become part of a global network beyond their own gates. With chapters on Australia, Canada, Europe, South America, Asia, Africa and the Middle East, this is a truly international resource for scholars and students of urban studies interested in this dynamic, growing area of research.”
“The economic, political and social situation in Chile shows a country in transition. Some observers anticipate a broad “reboot” of the nation. While Chile is still seen by many as an example of progress in South America and of developmental potential in the global South, it faces a complex political constellation, particularly in the aftermath of the re-election of Michelle Bachelet. Many wonder how social and institutional innovations can be incepted without interrupting the country’s remarkable success over the past decades.
This book provides an interdisciplinary analysis of Chile’s situation and perspectives. In particular, it addresses the questions:
What is Chile’s real socio-political situation behind the curtains, irrespective of simplifications?
What are the nation’s main opportunities and problems?
What future strategies will be concretely applicable to improve social balance and mitigate ideological divisions?
The result is a provocative examination of a nation in search of identity and its role on the global stage.
Roland Benedikter, Dr., is Research Scholar at the Orfalea Center for Global and International Studies, University of California, Santa Barbara, Senior Research Scholar of the Council on Hemispheric Affairs Washington D.C., Trustee of the Toynbee Prize Foundation Boston and Full Member of the Club of Rome.
Katja Siepmann, MA, is Senior Research Fellow of the Council on Hemispheric Affairs Washington D.C., Member of the German Council on Foreign Relations, and Lecturer at the Faculty of Interdisciplinary Cultural Sciences of the European University Frankfurt/Oder.
The volume features a Foreword by Ned Strong, Executive Director of the David Rockefeller Center for Latin American Studies, Harvard University, and a Preface by Larry Birns, Director of the Council on Hemispheric Affairs, Washington D.C., and Former Senior Public Affairs Officer of the United Nations’ Economic Commission for Latin America (Santiago, Chile).”
“A Sociological Approach to Health Determinants investigates how the social works in determining health and health inequity. Taking a global perspective, the book shines a light on how experiences of health, illness and health care are shaped by a variety of complex social dynamics. Informed primarily by sociology, the book engages with the WHO’s social determinants of health approach and draws on contributions from history, political economy and policy analysis to examine issues such as class, gender, ethnicity and indigeneity, and the impact they have on health. A Sociological Approach to Health Determinants is a comprehensive resource that provides a new perspective on the influence of social structures on health, and how our understanding of the social can ensure improved health outcomes for people all over the globe. Toni Schofield is Associate Professor at the University of Sydney. She specialises in research and teaching in sociology, and public policy and administration.”
New Directions in Children’s and Adolescents’ Information Behavior Research edited by Dania Bilal and Jamshid Beheshti (Emerald Group Publishing: 2014)”This book comprises innovative research on the information behavior of various age groups. It also looks at special populations such as ethnic minorities, indigenous peoples, and users with disabilities. The book presents research and reflections on designing systems that help the new generation cope with a complex knowledge society.
Economy Reports for APEC Economies on demographics, policies & ICT applications for people with Special Needs (Seniors and People with Disabilities), Asia-Pacific Economic Cooperation, APEC Telecommunications and Information Working Group, January 2013
If you would like to either sponsor an issue of Southern Innovator or place an advertisement in the magazine, then please contact southerninnovator@yahoo.co.uk.
David South Consulting 
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