Innovation in China is accelerating and fast, as the country tops Boston Consulting Group’s recently releasedGrowth Tech 100.
China claims the top three spots in the Growth Tech 100 (GT100), a list that ranks global high-growth, tech-enabled companies founded within the last two decades.
Among the top three companies on the list are Pinduoduo, Meituan and ByteDance, all of which hail from China, while companies headquartered in China account for 20% of the GT100. And more than half of electric car companies on the list are Chinese ones.
Even as the pandemic’s destructive impact on global stock markets took hold, these three tech giants, and other companies on the list, outperformed the rest of the market.
In fact, last year (2020), even as the pandemic raged on, proved to be an innovation milestone for China as it attracted US$163bn in foreign direct investment, surpassing FDI inflows to the US, according to the Wall Street Journal.
Such a milestone is a growing indication of the innovation we can expect from China in the future, in spite of the current regulatory restrictions being placed on tech companies in the country.
Why innovation in China is likely to rise
Thanks to the rapid pace of urbanisation and rising consumerism in China over the last few decades, there has been considerable growth in consumer and mobile commerce with super apps such as Meituan, ranked #2 in the GT100,
The growing power of younger consumers who value personalisation underscores the importance of tailored offerings to the success of these companies.
China’s massive, mobile-savvy population has also led to innovations in social media platforms focused on the mobile experience, such as TikTok owner ByteDance (ranked #3) and Kuaishou (ranked #28).
Government sponsorship and subsidies have helped boost Chinese innovation in AVs and IoT, too. In fact, more than half of the GT100 in this category are headquartered in China including NIO (#11), Li Auto (#23), Xpeng Motors (#24) and Roborock (#59).
Top 10 high-growth tech-enabled companies in China
We profile the China-headquartered tech firms that have seen the highest growth over the last 20 years, according to BCG’s Growth Tech 100 ranking.
Average annual valuation growth:US$16.9bn
Founded in 2012, social media platform ownerByteDance, most known for owning TikTok, has grown into the world’s most valuable privately held companies with a valuation of US$140bn. The company won widespread global popularity with TikTok,which launched in 2017 and really took off during the height of the pandemic lockdowns. TikTok lets people easily create, edit, and share 15-second videos on a mobile device, feeding users an addictive, personalised video-watching experience. ByteDance owns several other social networking apps operating within China including FlipChat and Duoshan. Billionaire co-founderZhang Yiming stepped down from the CEO rolein April 2021, handing the leadership reins to co-founder Liang Rubo, and two months later stepped down as chairman stating he wanted to help formulate the company’s longer-term strategy but from a distance.
Average annual valuation growth:US$9.1bn
Considered a rival to Tesla, Shanghai-based electric vehicle startupNIOhas grown quickly since its launch in 2014, securing big backing from tech giants such as Tencent, Baidu and Xiaomi. The startup designs, jointly manufacturers and sells smart and connected premium EVs, driving innovations in next-gen technologies in connectivity, autonomous driving and AI. While its first model developed was a supercarin 2016, NIO unveiled itsfirst volume manufactured electric vehicle, the ES8 – an electric seven-seater SUV – in 2019 followed by the ES6, EC6 (a coupe-style SUV) and the ET7 sedan. Founded by Chinese entrepreneur William Li, the EV startup went public on the NYSE in 2018 becoming the third-biggest US listing by a Chinese firm that year. It has delivered some 140,000 cars to customers in China to date and is expanding to Europe. It is nowvalued atUS$64bn.
Average annual valuation growth:US$7.2bn
Founded just over a decade ago, consumer electronics company and smartphone manufacturerXiaomihas grown exponentially with its global smartphone shipments reaching record heights in thesecond quarter of 2021, beating Apple sales in Europe, and ranking number 2 globally for the first time with a global market share of 16.7%. The company also has the world’s leading consumer AIoT platform with 324.8 million smart devices connected to its platform. Xiaomi products are sold in more than 100 countries. The company, which is now valued atUS$79bn, has recently announced plans to enterthe smart electric vehicle market.
Average annual valuation growth:US$4.8bn
An innovator in China’s new electric vehicle market and direct competitor of NIO, Beijing-headquarteredLi Auto(aka as Li Xiang) was founded in 2015 by millennial Chinese entrepreneur Li Xiang. In 2020, the company launched its only vehicle, the Li One, a plug-in hybrid electric vehicle that comes with a fuel tank for charging the battery – marking a different approach for this EV startup. Ranked among the top 10 high-end SUVs sold in China in 2020, it has sold nearly 100,000 since deliveries began that year. The startup listed on the Nasdaq raising US$1.1bn and today is valued atUS$29bn. Li Auto has been generously backed by Meituan and ByteDance.
Average annual valuation growth:US$4.8bn
Founded in 2014 by two former senior executives of GAC Group, both with expertise in automotive technology and R&D,XPeng Motorshas secured backing from global investors including Alibaba, Foxconn, Xiaomi and IDG Capital. The company has three models under its EV belt, including the Xpeng G3, a 5-passenger SUV; the Xpeng P7, a sedan; and the Xpeng P5, also a sedan. They also launched a ride-hailing platform, Pengster, in 2019 with its network continuing to expand. The firm is valued atUS$34bn.
Average annual valuation growth:US$4.2bn
Founded in 2012 by Cheng Wei initially as a smartphone app for people who wanted to immediately hail taxis,DiDi Chuxinghas grown exponentially and now dominates the Chinese ride-sharing market. The platform has expanded both geographically – now operating across APAC, Latin America, Russia and Africa – and in its services, and now offers other forms of shared mobility including bikes, buses and chauffeurs, as well as food delivery and financial services. Valued atUS$38bn, the company which has itself invested in similar startups including Singapore-based Grab and Uber rival Lyft, boasts 13,000 employees worldwide. It went public in June 2021 in a bigger than expected IPO, marking one of the largest listings by a Chinse company in the US since Alibaba went public in 2014.
Average annual valuation growth:US$3.8bn
Social media companyKuaishouwas born in 2011 as a Chinese short video-sharing app. Co-founded by Chinese tech entrepreneur Su Hua and Cheng Yixiao, the Tencent-backed tech company tried to buy TikTok in 2017 but was beaten to it by Bytedance. The company offers an array of video-sharing and live-stream platforms, including Kuaishou (aka Kwai internationally). The tech firm went public in Hong Kong in February 2021, marking the world’s biggest IPO since 2019 and is now valued atUS$38bn. In October 2021, co-founder Su Huastepped down as CEO, with co-founder Cheng Yixiao stepping in, as Hua wanted to dedicate more time to the company’s long-term strategy.
Average annual valuation growth:US$2.4bn
Founded in 2010 by a handful of scientists and developers, each committed to discovering new oncology treatments, Beijing-headquarteredBeiGenenow boasts a global team of 7,000, a rich pipeline, strong partnerships, commercial products and a valuation ofUS$26bn. The first biotech to go public on the Nasdaq in 2016, BeiGene is a clinical-stage biotech firm engaged in the discovery and development of molecularly targeted and immune oncology drugs for the treatment of cancer. It has developed a proprietary cancer biology platform that addresses the importance of tumour-immune system interactions and the value of primary biopsies in developing new models to support its drug discovery effort.