On November 12, TechCrunch Shenzhen 2019 successfully came to a close in Shenzhen. The two-day summit attracted more than 300 startups, 200 investors, and 10,000 entrepreneurs, media outlets, students, large enterprises, and governments from more than 160 countries and regions around the world. We invited nearly 100 industry leaders from leading companies such as Huawei, Airbus, QQ Music, Ping An Technologies, HSBC, Insta360, and Lime to discuss 55 in-depth topics such as how would technology change the online music industry, the innovation of mobile phones in the 5G era, the innovation of smart mobility, cloud gaming, coding education, Japanese innovation, and investment in Southeast Asia and Asia, through the Main Stage and six side stages.
We were honored to invite Min Huang, the Deputy Mayor of Shenzhen; Hong Wei, the Deputy Director of the China Copyright Protection Center; Qiang Wang, the Secretary of Nanshan District Committee, and other government leaders to TechCrunch Shenzhen 2019. Yahoo! Hong Kong, Sina, Phoenix Technology, Toutiao, Sina Technology, LinkedIn, Chinalab, Reuters, and Tencent were among the 200 top domestic and foreign media outlets that participated in and reported on the TechCrunch Shenzhen 2019.
On the first day of TechCrunch Shenzhen 2019, we invited Changhua Zheng, the Deputy Director of the Science and Technology Innovation Bureau of Shenzhen Nanshan District; Chen Hu, General Manager of QQ Music; Wei Zhou, the Founding Partner of Chuangshi Partners Capital; Jianjun Wang, the founder and CEO of MakeBlock; Erhai Liu, the Founder and Executive Partner of Joy Capital; and other top industry entrepreneurs and government innovation leaders to participate in the Main Stage. The next day, the dialogue among many guests at the Main Stage brought the summit to a climax. TechCrunch Shenzhen 2019’s Main Stage focused on 5G, smart transportation, aerospace, artificial intelligence, IoT, breaking into the Southeast Asian market, and other hot topics while bringing together leading professionals from various industries and fostering in-depth discussion between many tech industries.
Young and tech-savvy internet users make up the bulk of paid subscribers on music-streaming platforms in China. “The traditional way of consuming music is not enough to satisfy younger users. They are looking for more opportunities to engage with their idols, as well as the opportunity to become a create music themselves,” said Oscar Hu, the General Manager of QQ Music, at TechCrunch Shenzhen 2019 on Monday.
When 3G was first launched back then, people assumed that its biggest impact would be enabling video call, but in fact, video call did not become the key application scenario of 3G. After the large-scale deployment of 4G, developers did not realize that there would be so many 4G-based services and applications, including those that help consumers order meals and call taxis. However, with continued improvements in mobile phone positioning abilities and experiences, more applications and services continue to be created on mobile phones, which benefitted consumers. The high network speed and low latency of 5G enable consumers to have multi-faceted experiences. Gang believes that with the deployment of 5G infrastructure and capabilities, there will be more excellent developers and service providers who will develop a better ecosystem and provide consumers with greater value.
“We all understand that in order to build an internet ecosystem, the winning differentiation lies in the builders: who can best provide the functions that consumers prefer and who can best meet the constantly changing needs of consumers. This is the key point in future competition. In the future, differentiation will be a smart internet. Our phones took the first step toward smart internet. Our phones have the largest screen, intelligent rotation, and many of the world’s “firsts.” Firstly, we are the first ones to enable 100% access to the mobile phone ecosystem and allow other developers to participate in our projects. In the future, we will adhere to the concept of openness in terms of differentiation and unleash the power of the internet. At the same time, as a company that has genes of both automobile electronics and IT, we will continue to develop this field. We hope that we will continue to refine our products, put the needs of consumers first, and expand the needs of consumers to make them fans of our cars. We will also integrate multi-screen interactions into our cars and build intelligent security systems to create an ecosystem of smart internet and security. Such goals are not limited to BYD but apply to the entire internet ecosystem. When building this platform, those with the most open-mindedness and the most inclusive will be able to create the best product.”
The Japanese economy is still highly focused on the manufacturing industry, with over half of the top 500 local companies coming from the manufacturing sector. In contrast, Japan is home to only three unicorn startups, or private firms with a valuation of $1 billion, according to a long list of 415 such firms globally from CrunchBase Insights.
Unlike in China and the US, where startups mainly drive tech entrepreneurialism, Japanese corporations are taking a more prominent role in pushing tech innovations, according to Shimizu Kenji, director general at the Japan External Trade Organization (JETRO).
“China’s artificial intelligence (AI) is like a kid with an IQ of 120. The US’ is a child with an IQ of 140. But in the US, the kid hasn’t left the laboratory,” according to Zhou Wei, founder and managing partner of China Creation Ventures.
Zhou said that China’s AI industry could overtake that of the US given the country’s move toward mass implementation of the technology and the fast rates of business model iteration.
Transforming Smart Robots into household items
“My goal is to think about how to transforms robots into household items, but how do I do that? First of all, we need to reduce the industry’s multi-million-dollar robots to a price tag that middle-class families could afford. If this cannot be done, even if other technologies are developed, consumers would not be able to afford the robots. We focus on several robot technologies, such as control, vision, voice, and operating systems – it’s an on-going process. We think about robots as an integrated framework, and we integrate the surrounding technologies into this framework to develop into a new product –– this is how we are going to develop moving forward.”
Investing in the Future
On the question of “Why robotics is still a sound investment despite many failures (in the industry), Peter Barrett said: “ The robotics category includes things which are entirely software, includes things which are in very broad deep businesses that haven’t had their industrial revolution yet, that need capital to be able to build their companies to make those categories really shine…I think it’s a mistake to conflate the entire breadth of category and avoid things that are incredibly important, which are getting overlooked. I think that’s general truth about robotics and also generally truth about the category of AI where companies that are deferred by kind and not degree are sort of lumped into the same capital bucket and stuff which could be absolutely transformative doesn’t get funded because people are afraid about a toy that went out of business.”
“We have to invest somewhere in between improbable and impossible. If it’s obviously going to work, they can get money from anybody. We like stuff almost certainly won’t work, but if it does, it’s going to be consequential. So, risk has to be completely one side of the ledger, but I think we are completely-suited to be able to measure, track and help these deeply-technical companies to succeed.” he said.
The “Fast and Slow” Way of Xiaopeng Motors
The sales and growth that new energy vehicles really need to generate come from their own product competitiveness and infrastructure improvement. The biggest anxiety point for people who buy electric vehicles is mileage. Where can they charge and how far can they drive? These will limit the purchase of many people because they are not used to charging but they are used to re-fueling. The change in their habits needs to come within a certain period of time through the popularization of education and infrastructure. If the popularization rate surpasses 10%, a turning point will occur. In the past, smartphones, PCs, and many other industries faced an explosion in popularity as soon as they reached a penetration rate of more than 10%.
“If you want to deal with the fragmented market in Southeast Asia, you may have to deal with five countries, such as the Philippines, Thailand, and Indonesia. It is very difficult to get rid of the vortex in these countries. The first thing we need to do is to form a common platform. The main challenge is for technology companies to bring together these scattered markets, as well as different cultures and languages. Sometimes the same country has different languages and cultures. We need to form a local team, so as to help us make better use of local resources and understand the local culture. It is also a challenge for Chinese enterprises to go to Southeast Asia. The strategy of dual access is also very important. Chinese enterprises need to consider whether to enter by themselves or to establish a partnership with domestic business. The next successful company in Southeast Asia will be a Pan-Asia company that is able to form strong local teams.”
Aerospace Innovation in the Era of Science and Technology
“From the perspective of the aerospace industry, innovation is growing, but it has not yet reached the point of disruption. Our comprehensive product portfolio serves the needs of the market very well. Of course, the technology has not reached a very mature level that can let us create new products. What we need to do is to reduce energy consumption by 50%. It may take five, seven or ten years for such technology to mature. We haven’t seen disruptive innovation yet, but we are promoting innovation and changing our customer interaction methods. At the same time, we will also improve our system, including the production system, so that it can have more powerful capabilities and develop better in the future.”
“From the perspective of ticketing, we seem to be very big, but from our positioning, we are still very small. The full-text entertainment industry is estimated to reach a market scale of 23 trillion next year. Movies are only a small part of it. We have dramas, we have VR content and so on, which are all in the category of entertainment. I think the demand for content consumption will expand day by day and will be a very fast-growing industry in the future. There are endless opportunities for this industry. We all hope to see a variety of new technology innovation methods that emerge with the explosion of demand, which is the perfect opportunity for us to start a business.”
Chinese companies may have filed the most patents globally last year, but that doesn’t necessarily equate to breakthroughs in innovation, said Ryan McCarthy, the principal and chief representative at the Shenzhen office of intellectual property (IP) law firm Fish & Richardson. He called for efforts to boost the quality of these filings.
“When you see more patents filings, that’s typically a very clear sign of innovation,” he told TechNode in an interview at TechCrunch Shenzhen 2019 on Monday. “But the number of patents that are actually issued is probably a better sign of quality.”
“This year’s capital winter is colder than usual, but the cycle will likely soon pass,” said Duane Kuang, founding managing partner of Qiming Venture Partners, during a fireside chat at the event. Kuang explained that venture capital funding in China’s tech space has always followed the natural cycles—cooling, freezing, heating up, and overheating. But each cycle is becoming shorter. The Shanghai-based venture capital firm is a prominent backer of Chinese tech giants including Xiaomi, Meituan Dianping, and Bilibili.
Emerge Side Stage
At Emerge by TechNode, we discussed, in-depth, the emerging technology trends through professionals’ analysis, namely on how the cloud-based games reshape the video game industry, mass customization in China––the next outlets for retail and manufacturing industries and how Chinese tech investors are increasingly looking for a way to gain access to India’s untapped potential.
Cloud games have the potential to revolutionize China’s gaming industry. China is one of the largest gaming markets in the world, with nearly 700 million users. In this forum, we invited Technical Director of Tencent Cloud Games Yu Yang and long-time analyst of Asia’s internet industry David Dai to discuss the biggest challenges and room for growth that face cloud games in China, including the current state of the internet, the launch of 5G, and the dynamic changes that cloud games can bring to the Chinese gaming industry.
Cloud gaming connections tend to be stable as long as people stay still. Yang said that switching base stations means users could experience a jitter. But even when users are in taxis or riding the subway, he believes that 4G will be enough. “The strategy for cloud gaming is little to no buffer, so users will see a jitter scene and jump to the latest scene,” said Yu Yang, the technical lead at Tencent Cloud Gaming.
In China, the Customer to Manufacturer (C2M) business model, which connects manufacturers and consumers to produce customized products at a lower price, is on the rise. Through cooperation among manufacturers, online retailers, consumer brands, and artificial intelligence companies, China’s mass customization will become a reality. Victor Tseng, Vice President of Corporate Development at Pinduoduo, and Dan Kong, Senior Investment Director of Beifeng Capital, attended Emerge at TechCrunch Shenzhen to discuss the current C2M landscape in China.
“C2M is essentially evolving traditional manufacturing from an R&D and marketing-driven process into a consumer-driven process,” explained Victor Tseng, vice-president of corporate development at Pinduoduo.
From smartphones to smart apps, Chinese companies and entrepreneurs are paying more attention to the India market. Of course, this isn’t a one-way street: Indian entrepreneurs, like much of the developing world, are also looking to China for lessons on business model innovation. As the domestic market cools, many Chinese VCs are also eager to invest in Indian companies. So, what are the opportunities for China-India tech? What are the challenges? How will this relationship develop over the next 5 years?
“From 1990 to 2014, aggregate Chinese [foreign direct investment] in India was less than $2 billion. From 2012 to 2016 or 2017 that number was $6 billion to $7 billion,” mostly led by China’s tech giants like Alibaba and Tencent, said Dev Lewis, a researcher at Hong Kong-based think tank Digital Asia Hub during a TechNode Emerge panel at TechCrunch Shenzhen on Monday.
New Media Marketing Side Stage
Technology and Sports Side Stage
Emerging Markets: Investment Opportunities
Companies Going Abroad Side Stage
Even on the second day, we saw VC Meetup continued to boom with enthusiasm and vigor. Nearly 100 well-known investment institutions considered the market attraction, product differentiation, management ability, risk management ability, and potential of over 400 participating startups. The industries of participating startups run the gamut, spanning from artificial intelligence, TMT, IoT, enterprise services, big data, cultural and creative categories, sports and health, and game and entertainment, to biomedicine, fintech, new retail, e-commerce, blockchain, VR/AR, and high-end manufacturing.
About 300 startups from China mainland, Hong Kong, Taiwan, the United States, Japan, South Korea, Singapore, and Israel attended Startup Alley. The startups brought the latest high-quality innovation in fields such as intelligent hardware, healthcare, incubators, enterprise services, 5G applications, internet, and intellectual property. Min Huang, Deputy Mayor of Shenzhen, Hong Wei, Deputy Director of the China Copyright Protection Center, Qiang Wang, Secretary of the Nanshan District Committee, and other government leaders also attended Startup Alley.
Special HSBC Booth
At the two-day Startup Alley, HSBC brought the open innovation workshop experience to event participants. The participants of TechCrunch Shenzhen 2019 and entrepreneurs who pay close attention to digital trade transactions and financial solutions discussed with the HSBC team closely the hot topic of the first day, “how to deal with the fluctuation of the RMB exchange rate,” and the professional knowledge of the second day, “cross-border financing of enterprises and fund managers.” Through face-to-face communication, the entrepreneurs explained their comprehensive capital management and financing services to HSBC. The more excellent enterprises at the HSBC booth launched the “HSBC new plan,” which aims to provide fast-growing enterprises with advanced-stage financial solutions. The HSBC booth served as a unique fintech center throughout the two-day Startup Alley.
Special BMW Booth
Special LinkedIn Booth
The central stage was located at the center of the exhibition area. Some entrepreneurs introduced their latest products to the audience, gaining exposure and attention, and also held Q&A sessions with their audience.
With the support of TechCrunch, Hardware Battlefield brought together startups from all over the world that competed to show their innovative hardware products to investors, media outlets (including TechCrunch USA), entrepreneurs, and industry experts. Ten excellent teams from around the world competed fiercely in the hardware arena, and in the end, Team OKRA from Australia won the championship and took home the $25,000 prize. Yu Liang, General Manager of HSBC’s Industrial and Commercial Finance Technology Business, served as one of the judges at this year’s Hardware Battlefield.
Held on the evening of November 11, the VIP Dinner was sponsored by HSBC, TechCrunch’s financial partner. About 150 industry leaders, start-up founders, investment institutions, and well-known domestic and foreign media outlets attended the event, covering topics such as hardware smart manufacturing, new medicine, new retail, new economy, and lifestyle. While enjoying delicious food and wine and participating in interactive games, industry leaders strengthened their ties and their commitment to continued cross-border cooperation.
Media Day took place a day before TechCrunch Shenzhen 2019. Hundreds of start-ups and nearly 50 journalists discussed in-depth the developments in and the future of various technological fields. On the second night of TechCrunch Shenzhen 2019, we worked with partners La French Tech and HAX and presented a relaxed and happy after-party for participants.
TechCrunch Shenzhen 2019 has come to an end. We sincerely thank all speakers, sponsors, partners, volunteers, and participants for all your support. No matter where technology is, we believe our shared love for technology will guide us to meet again.
We hope to see you again at TechCrunch China International Summit next year!