Ben Harburg, managing partner at MSA Capital talks with CNBC’s Evelyn Cheng at the annual East Tech West retreat in the Nansha district of Guangzhou, China on December 1, 2021. Harburg discussed its ambitions to reach out global exposure of Chinese technology companies.
CNBC
GUANGZHOU, China – Chinese tech companies are considering expanding abroad much earlier in their lifecycle, a venture capitalist told CNBC – marking a shift in attitudes among companies company in the world’s second largest economy.
According to Ben Harburg, managing partner at venture capital firm MSA Capital, that shift is driven in part by China’s tighter regulatory scrutiny of technology as well as competitive pressures. competition in certain areas.
“It also forces Chinese companies earlier in their lifecycle to think about going global,” Harburg said at CNBC’s annual East Tech West conference in Nansha, southern China.
Harburg says that a few years ago, his venture capital firm worked with social media or more mature cross-border e-commerce companies. But today, early-stage companies in fields from artificial intelligence to healthcare are going global or are “thinking about their globalization strategy,” he said.
Harburg said such Chinese companies may find that their business model works in emerging markets.
“Our view is that China’s business models are best practice globally, especially for emerging markets, because of the way Chinese consumers evolve with evocative technology. remember more of how the next wave of consumers in India, Pakistan and Egypt and in Nigeria, and Brazil, will engage with technology,” he said.
There are only a handful of examples of Chinese tech companies succeeding abroad in the past. But in recent times, there has been an increase in China-based technology companies developing their international businesses.
Beijing-based Xiaomi is now the third-largest smartphone maker by market share globally – thanks to huge profits in India. The Chinese tech giant’s short video app TikTok has a billion monthly users globally.
Chinese fashion brand Shein has also attracted young Western consumers.
Meanwhile, giants like Alibaba and Tencent continue to expand overseas business.
“I think there can be a perception that this is the culmination of China’s expansion into these markets,” Harburg said.
“But our view is that this is just the tip of the iceberg and there are plenty of Chinese-founded companies that are dealing with financial services, education, healthcare and other social applications in China.” both in emerging markets and even in more mature markets.”
