The change was prompted in part by China’s tighter regulatory control over technology as well as competitive pressure in some industries, according to Ben Harburg, managing partner of venture capital firm MSA Capital.
“It also forces Chinese companies much earlier in their lifecycle to consider going global,” Harburg said at CNBC’s annual East Tech West conference in Nansha, southern China.
These Chinese companies might find that their business models are working in emerging markets, in particular, Harburg said.
“Our view was that Chinese business models are global best practices, especially for emerging markets, because the way Chinese consumers have evolved with technology is much more reminiscent of how the next wave of consumers in India, in Pakistan, Egypt and Nigeria, and Brazil, will engage in technology, ”he said.
Beijing-based Xiaomi is now the world’s third-largest smartphone player in terms of market share, thanks to big gains in India. Chinese tech giant ByteDance’s short video app, TikTok, has one billion monthly users worldwide.
Chinese fashion brand Shein has also won over young Western consumers.
Meanwhile, giants like Alibaba and Tencent continue to expand their businesses overseas.
“I think there’s maybe the perception that it’s, you know, it’s kind of the pinnacle of China’s expansion into these markets,” Harburg said.
“But our view is that this is only the tip of the spear, and that there is a long tail of Chinese companies dealing with financial services, education, health care and other social applications in emerging markets and even more mature markets. ”