On Oct. 29, TechNode’s second annual flagship conference successfully came to a close at the Shanghai Exhibition Center.
Emerge was a central stage event of the Inno Match Global Technology Transfer Fair, organized by the Pujiang Innovation Forum. It attracted an audiences of more than 300, consisting of investors, business executives, diplomats, media outlets, tech professionals, large enterprises, and startups. We discussed in-emerging technology trends in depth, through our six panels on stage with professional analysts and industry experts, as well as two workshops on decentralized finance and China’s data privacy framework, conducted by Sino Global Capital and Control Risks, respectively.
During the conference, we also co-hosted the Shanghai Makers Awards Ceremony with Shanghai Makers to announce the winners for the EdgeX awards, the Open VINO special awards, and the Healthtech Special Track awards. Among the 11 winners are i-Design, HYD Miracle Innovation, AI Cooling, Power Blazers, Huiyanshi Energy, Jiangxing Intelligence, JD Xinglian, Baowuzhiwei, CTC Jujishou, Xueyi jiu deliao hao jiemei, Yizao Medicine.
The following are the highlights of each panel at Emerge.
Keynote Panel: World still open to Chinese tech amid tensions
Beyond geopolitical tensions, Chinese tech companies expanding overseas also face obstacles in the form of privacy regulations, marketing, and localization. To answer the big question of the year: “Is the world still open to China tech?”, We invited William Bao Bean, general partner at investment firm SOSV, and Kiran Patel, the senior director at China-Britain Business Council, to share their thoughts.
“You have to adapt to the local market. You have to follow the local law. And half the time, people [startups] don’t even know that they’re breaking the law when they go across the border,” said Bao Bean.
Chinese companies have been successful in exporting hardware to overseas markets, but there are trust considerations when they are exporting software that holds personal data, said Patel during the discussion. “That is the challenge that companies like Tiktok and Wechat have to meet when moving into a new market,” Patel said. “The first challenge that must be overcome is building trust.”
Healthtech after Covid: The future of healthtech in China is B2B
The Covid-19 pandemic has brought users and funding opportunities to healthtech startups, but the industry is shifting away from B2C models due to high user acquisition costs, according to an early-stage investor speaking at TechNode’s Emerge 2020 conference on Thursday.
Many B2C healthtech startups, like Ping An Good Doctor, have followed a model popularized by China’s e-commerce platforms: They don’t care how much capital they spend on user acquisition, thinking that eventually it will pay off, said Linda Li, managing director and co-founding partner of investment firm Vickers Venture Partners.
Mark Zhang, partner at law firm King & Wood Mallesons, said during the discussion that a major inflection point for China’s healthtech boom came two years ago in the form of comprehensive regulation.
“Before 2018, there was no nationwide framework to regulate online healthcare,” even though the industry had been growing for 10 years, he said. Platforms couldn’t really go into healthcare so the industry was focused on tasks like making appointments with hospitals.
Starting in 2018, three pieces of regulation cleared the way for healthtech innovation: online platforms, online solutions, online hospitals.
China’s EV battery reliability a lingering question
China will maintain its leadership in the global clean energy vehicle industry powered by its mass production of cheaper electric vehicle (EV) batteries, according to an industry expert, though it will struggle to surpass technological advances from Asian peers.
“Technically, Chinese battery makers are catching up to the Korean and Japanese battery suppliers. The technology gap is getting smaller, though reliability is still sometimes a question compared with Korean and Japanese batteries,” Stephen Dyer, managing director of global consultancy AlixPartners, said Thursday on the sidelines of the TechNode Emerge 2020 event in Shanghai.
“Nickel, cobalt, and manganese (NCM) batteries, including CATL’s NCM 811 battery, are naturally more unstable. A growing number of automakers in China are thus turning to lithium-iron-phosphate (LFP) batteries from a safety and cost perspective,” said Daniel J. Kollar, head of Automotive & Mobility Practice at business development consultancy Intralink Group.
“We’ve seen a lot of companies came in and failed in the Chinese steel and solar industries, and the battery sector is going to follow that trajectory,” Tu T. Le, founder and managing director of business intelligence firm Sino Auto Insights, said during the panel discussion.
Not just a hard sell, livestreams help build a brand image
Applications for livestream are various and it is a matter of what merchants or brands want to achieve by leveraging the format, Pablo Mauron, partner and managing director of Digital Luxury Group (DLG), said during the panel discussion. He cited a recent example from Louis Vuitton which staged and streamed its Spring/Summer 2021 Show in Shanghai as a typical non-sales-driven approach for livestreaming.
Michael Norris, research and strategy manager of Agency China, agreed. “Larger brands, such as SK-II and Aptamil, use elaborate branded sets to broadcast their livestreams. These broadcast studios become the home of product information, Q&A with the audience, celebrity cameos, as well as special offers and promotions.”
Speaking from her own experience, Maggie Fu, an internet influencer and co-founder of social media brand Melilim Fu, said livestreaming allows users to get a sense of being close to hosts. “People can see what you are doing, feel your personality through real-time interactions.”
Fu said that the key is to actually understand what the consumers want, rather than forcing consumers to buy. The entertainment aspect of watching the livestream and nice discounts are also crucial factors to attract eyeballs.
Central mandates are China’s edge for decentralized ledgers
“China is in the driver’s seat” of blockchain development as blockchain adopters look for solutions to connect different chains, Fudan University professor Michael Sung said at the TechNode Emerge 2020 conference held on Thursday.
Cross-chain integration, called “interoperability” in the blockchain world, is a key challenge for the emerging technology. Blockchain promises a decentralized, largely tamper-proof way to store and share data. But as different users adopt different chains, there is a rising need for good ways to exchange data between them.
China’s blockchain developers are riding a wave of state support since the technology was “anointed” by top leaders, following the pattern of artificial intelligence and 5G, Matthew Graham, CEO of blockchain-focused investment fund Sino Global Capital, said during the panel discussion. This support means “huge investment, probably overinvestment,” he said. “But out of that, innovative things will emerge.”
China’s blockchain ecosystem has weaknesses, the panelists said, naming public blockchain and token-based business models as examples. The country restricts much cryptocurrency activity, and is known for favoring more controllable permissioned or consortium chains over decentralized chains.
But this preference is not absolute, said Harriet Cao, co-founder of Bianjie, a Shanghai-based startup that has developed both public chains and enterprise-oriented consortium chains. “Public blockchain is highly supported” as long as companies are working on the technology and not banned activities like initial coin offerings, she said. Cao said she has been invited to universities around China to introduce public chains.
Young consumers and buzz boost foodtech in China
The term “plant-based meat” became a buzz word in China with the entry of Beyond Meat and Impossible Foods to the market. Plant-based proteins are not a new thing in Asia, but with new technology behind the trend, China is taking a fresh interest in the food industry. Venture capital investors are also assessing potential in foodtech.
More than 80% of investment in the sector has been downstream from foodtech, such as e-commerce, delivery, and brands, said Dee Zhang, principal at Bits x Bites, during a discussion at TechNode’s Emerge 2020 conference. However, she said that the trend will shift upwards to upstream segments to secure the food itself.
Rich cultures and vast territory has made China a country with diverse food choices. Therefore, the constant exchange of demographics has created a relatively dynamic market in China, said Sam Lee, manager of projects and operations at Analytical Flavor System. There have been some successful cases of a new food or flavor from overseas that were welcomed among the younger generation in China. However, whether all new foods and flavors brought to the Chinese market will be fully successful is debatable, Lee said.
Plant-based protein maker Just Egg has conducted a lot of research and customized recipes to fit Chinese consumers’ eating habits, according to Gary Zhang (no relation), head of its regional marketing. Some 90% of shoppers who buy its products are flexitarians, who opt for plant-based products from time to time for sustainability and health reasons. He said the awareness of plant-based dining among the Chinese consumers is growing very quickly.
“We can see that more and more young groups and post-90s are embracing this kind of plant-based dining very actively,” he said.