Gartner has identified the top 10 digital disruptors in the Asia Pacific region. Lesser known than their Silicon Valley counterparts and rapidly expanding, Australian business leaders ought to familiarise themselves with these companies.
“Ignoring them is not an option,” warned CK Lu, research director at Gartner, who presented the list during the Gartner Symposium on the Gold Coast yesterday.
“As Chinese and American digital giants battle to disrupt global markets, you can’t afford to sit on the sidelines.”
To rank the disruptors Gartner’s model considered three factors scale, reach and richness of its products and services.
The analysts started the list by screening 500 Asia/Pacific companies that created their businesses based on digital initiatives — such as the internet, social, ecommerce, search and fintech. They then identified the top 100 by market cap as a measure of scale. Incumbent, or traditional businesses were excluded from the analysis.
“They [the disrupters] don’t stop at where they are now. Everyone of them is aggressively expanding to more countries and more businesses in this region,” Lu said.
The Top 10 Digital Disruptors in Asia/Pacific:
Tencent was ranked the most disruptive thanks to its product WeChat’s ability to “helps people organise their entire life.” Lu noted that the first thing brands do that want to do business in China, is set up a public WeChat account. Today in Australia there are already 4 million WeChat users and Westfield, David Jones, Qantas have public WeChat accounts to build awareness and manage customer loyalty, Lu said.
In ecommerce, Alibaba and JD.com make the list as they are becoming global trade platforms, allowing global businesses to sell into China.
Search giants Baidu (which is now making big bets on AI, AR and autonomous driving) and Yahoo Japan make the list for their ability to reach enormous numbers of consumers across the region.
Also strong in search is Korean company Naver, the owner of messaging app Line. Its strengths also lay in map data and self-driving technologies.
In financial services, Alibaba affiliate and operator of AliPay Ant Financial aims to provide services to people who are unbanked or without a credit card. Specifically it wants to serve 2 billion customers globally within the next 10 years.
Digital finance service Lufax is an online marketplace in China that was founded by Ping An Insurance. It began as a peer-to-peer lending company in 2011 and is now planning to launch a wealth management platform in Singapore.
Meanwhile Chinese ride sharing company Didi Chuxing “is forming a global anti-Uber alliance” Lu said. As of August 2017, Didi has entered investment/technology partnerships with six other ride-hailing leaders across the world, including Grab (Southeast Asia), Lyft (North America), Ola (South Asia), 99 (South America), Taxify (Europe) and Careem (the Middle East and North Africa). The partners also hope to introduce intelligent transportation technologies to empower smart city/smart transportation initiatives in each region.
Device-maker Xiaomi is known for its affordable and feature-rich smartphones and wants to be the “Apple of China.” Today at mi.com — Xiaomi’s online store — there are more than 50 categories of products available, from accessories, clothes, air puri ers, bikes, water lters, routers and TVs.
Leverage, Cooperate or Compete
According to Gartner, CIOs have three options for responding to the rise of Asia’s digital giants.
1) Leverage: Businesses with operations in Asia/Pacific can be at a disadvantage using US or European suppliers and partners, and should redesign IT infrastructures by leveraging Asian digital businesses if their revenue, customers or clients are weighted toward Asia. For example, CIOs should consider switching to China-based cloud services that can operate in China instead of using global services that may face limitations, either from regulation or localisation.
2) Compete: So far, most Asia/Pacific digital disruptors have sought to take over consumer areas, such as homes and transportation. However, digital giants are now moving beyond B2C to B2B, government and enterprise areas, such as the industrial and medical industries. This gives enterprises a window of opportunity to build a digital platform or lead a digital ecosystem. If the enterprise has a very strong brand and relationships with customers and partners, it can re-evaluate old enemies and build an ecosystem to jointly compete against the digital disruptors.
3) Cooperate: Global enterprises have some advantages they can use to build a cooperative relationship with digital giants in Asia, such as their own valuable internal data, global expertise and business presence outside the Asia/Pacific region. Enterprises should build a special task force to transform their businesses into digital to cooperate with digital giants in Asia. CIOs must recognise the cultural and working model differences because these companies are often more agile — and operate at a much smaller business scale.