CHINA: RISING OPPORTUNITIES FOR WESTERN TECH STARTUPS

MAX PEIRO - CO-FOUNDER & CEO AT SANPEI VENTURES

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CHINA: RISING OPPORTUNITIES FOR WESTERN TECH STARTUPS

MAX PEIRO CO-FOUNDER & CEO AT SANPEI VENTURES

SANPEI VENTURES

CHINA: RAISING OPPORTUNITIES FOR

WESTERN TECH START-UPS

SANPEI VENTURES

Max Peiro

9.8 M sqm 9.6 M sqm 4.3 M sqm

1,400 M

490 M

310 M

URBAN AREAS HYPERCONNECTED

RURAL AREAS ISOLATED

668 M 594 M

574 M

270 M

276 M

196 M

74 M

ACTIVE INTERNET USERS

MOBILE INTERNET USERS

89%

97%

46%

45%

MOBILE SOCIAL MEDIA USERS

MOBILE PAYMENT USERS

M-COMMERCE USERSO2O USERS

M2M CONNECTIONS

BUT HOW DID WE GET THERE?

web 1.0 late 90’s

web 2.0 late 00’s

present

build infrastructure path to innovation

1998: B2B portal to connect Chinese suppliers to overseas buyers

2003: C2C marketplace for Chinese market. War on eBay

2004: Escrow payment method

2008: B2C marketplace, reshaping online buyers behavior

2015: Largest Tech IPO in history

✓ From B2B to C2C to B2C

✓ Adapt and conquer: Taobao vs ebay

✓ Localization leads to innovation: Alipay

✓ Education and evolution based on customers’ changing needs

✓ Growth: functionality and engagement

E-COMMERCE and B2C VERTICALS

group buying

flash sales

car-hailingonline travel

financial services

health services

video platform

social media streaming music newspaper

browser and gaming

ENTERTAINMENT

INFRASTRUCTURE

cloud

payment solutions

ad network

mapping solutions

logistics

FULL-SCOPE EXPANSION

1998: QQ messenger (ICQ copycat)

2004: Gaming development, sales of virtual goods - Q coins

2008: Social network

2011: Mobile messaging

2009 2011

moments people nearby walkie talkie

QR code

desktop app group chat video call

2012

taxi booking

Aug 2013 USD 1B

car hailing

Feb 2015

Apr 2016

CAN UBER WIN THIS BATTLE?

✓ Cultural differences

✓ David vs Goliat

✓ Multiple focus vs single focus

✓ Built from scratch vs leverage massive user base

APPLE PAY

360M users

3.8T USD GMV quarterly

70% penetration rate

>50% mobile payments

CAN APPLE PAY WIN THIS BATTLE?

✓ NFC technology faster

✓ backed by BANKS and UNIONPAY

✓ Consolidated market

✓ Functionality

✓ Massive existing user base

OPPORTUNITIES

AI & Deep learning

AR & VR Smart Cities & IoT

Med Tech & Health

Ad Tech & Digital

Marketing

Big Data & BI

CHINA = EARLY ADOPTION + SCALABILITY

Fast growing M&A activity in China

• BAT expected spending 2016 USD 90B

• It’s not all about BAT

Internet Plus

• Innovation top priority for Chinese government

• Improve production through new technologies

• Favorable policies to foster innovation

CONCLUSIONS

• From copycat to innovation

• Execution is king

• Think twice about your business model

• Ecosystems and functionality

• Early adoption and scalability

• Local partners to reinforce your position

• Understand cultural differences and regulations

谢谢 (xiexie)

max@sanpeiventures.com

SANPEI VENTURES

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