Most of the American internet companies like Facebook still make money through advertising, while their Chinese competitors like WeChat and Weibo make money through selling all you can think of, tells Shanghai-based VC William Bao Bean to AP. They are way ahead of Facebook.
Buoyed by that cash, China’s tech start-ups are experimenting with new models that have the potential to make real money – and influence people around the globe.
“You go on Facebook and you can’t even buy anything, but on Wechat and Weibo you can buy anything you see,” said William Bao Bean, a Shanghai-based partner at SOS Ventures and the managing director of Chinaccelerator, a start-up accelerator.
“Facebook’s road map looks like a WeChat clone.”…
Because mass retail is relatively new here, Chinese e-commerce faces less competition from brick-and-mortar shops. And the middle class is exploding, accounting for 4 percent of the population in 2000 and 68 percent in 2012, according to research by McKinsey. By 2022, it will be 75 percent.
While U.S. firms focus on ad revenue, Chinese companies have become pace-setters in e-commerce. A more recent trend: live-streaming sites where people pay real money to reward performers with virtual gifts. (You sang beautifully, here’s a digital Lamborghini, dear.)
Bean called the amount of money flowing through these apps “significant.” Like their peers in Palo Alto, however, Chinese start-ups need to show they can generate enough revenue to make the model work in the middle term.
Are you looking for more experts on e-commerce at the China Speakers Bureau? Do check out this list.
Earlier this year we discussed with William Bao Bean how Facebook has started to copy its Chinese competitors.