The top Chinese tech companies in 2015 will continue pushing the development of the tech industry in China, Asia, and the global marketplace.
According to Battelle Memorial Institute, Research and Development, China’s annual tech spending is increasing much faster than that of the United States. In 2018 and 2022, that spending is projected to surpass that of both Europe and the United States.
Here are some of China’s leading tech companies to watch in 2015:
Huawei Technology Companies Ltd., a multinational telecommunications equipment provider, is second only to Ericsson in terms of revenue. In 2010, Gartner reported that the company’s revenues accounted for almost 16% of the carrier-network-infrastructure market. Over the past decade, the company has increased its expenditures 1400%, to almost $5.5 billion in 2013.
The company has built its business around three core services: telecommunications networks and services, enterprise business equipment and software, and the manufacturing of electronic communications devices. Huawei offers everything from fiber optic solutions to white-label computer accessories.
Through its competitive pricing and aggressive expansion strategy, the company has become China’s largest telephone-network manufacturer and the globe’s largest maker of telecom equipment.
Lenovo, based in Beijing, now ranks as the top maker of PCs worldwide. The company first edged its way into the United States’ market by purchasing IBM’s PC business in 2005. The company continues to expand by purchasing shrinking US-based companies.
Recently, Lenovo purchased IBM’s failing server business and Google’s Motorola smartphone company. The result of the second purchase is that Lenovo has become the world’s third-largest smartphone maker.
Lenovo has big ambitions, but can its profit margin keep up? In the past two years, the company has had a slim bottom line. So 2015 will tell if the company is on its way to the top or if it has bitten off more than it can chew.
Alibaba made waves with its public offering in the US. The IPO claimed the title for the largest global IPO ever, raising around $25 billion. This landmark public offering brought in almost $10 billion in pre-tax dollars for Yahoo, who offloaded 140 million shares.
The company, a mish-mash of Amazon, eBay, and PayPal, has almost 14,000 employees worldwide. Profits have slipped in 2014 versus 2013, but the company is still predicted to do well in 2015. In the first months after the IPO, stock prices have stayed above their initial offering.
Alibaba ranks 6th in revenue among the top Chinese tech companies. And in 2014, it has gobbled up dozens of other companies, from game developers to fashion companies, app companies, social networks, movie studios, and more.
Tencent tops the income chart for Chinese tech companies. Though many people outside of Asia have never heard of the company, it is the fifth largest internet-only company in the world, behind the likes of Google, Facebook, and Apple. The company controls a widely-used messaging app, with 650 million users – compare that to WhatsApp’s 500 million users.
Unlike Huawei, Lenovo, and other companies, Tencent has yet to expand beyond Asia. Its revenue is generated from its messaging app, through online games, an auction site, and mobile apps.
With a valuation of $150 billion dollars, Tencent is nothing to sneeze at. If they do decide to expand beyond Asia, the rest of the world will certainly take notice.
Google isn’t the top search engine in China – Baidu is. Baidu has a major ad platform, a collection of mobile apps, mobile app stores, an online encyclopedia, and more. It has the third-highest income of all Chinese tech companies.
Like Google, Baidu’s constellation of services makes it the go-to online service provider for many Chinese citizens. Its business model, which is based on advertising, is also similar to Google’s. The company offers pay-per-click advertisements that appear throughout the Baidu Union.
Baidu controls almost 65% of the search engine market in China, and has begun investing in other research, such as deep-learning technology and a system to prevent copyright infringement.
The Chinese Tech Industry in 2015
The future of the Chinese tech industry is a mixed bag. Some of the companies are aggressively expanding into other markets, and will directly compete with major Western companies. Huawei, Lenovo, and Alibaba, for example, clearly have their sights set on global penetration.
Others, such as the little-known Tencent Holdings and Baidu, will likely focus their efforts on the Chinese marketplace in 2015 and the foreseeable future.
As the global marketplace becomes more and more integrated, however, it will pay to keep an eye on the elephant in the room. Alibaba, for instance, a name unfamiliar to many in the Western world, came out of nowhere to hold the largest IPO in history. Other top Chinese tech companies may come out of the woodwork to compete with more familiar tech giants.