The Five Most Innovative Companies in China

According to list of the most innovative companies in the world published by the Boston Consulting Group in 2020, only five Chinese companies made to the top 50 list. These five companies symbolise the most innovative and competitive companies in China. These five companies are Huawei, Alibaba, Xiaomi, Tencent and JD.com respectively.

It is no surprise for a multinational technology company like Huawei to become the most innovative Chinese company in the world. According to China’s National Bureau of Statistics, Huawei spent 131.7 billion yuan ($19.3 billion) in research and development (R&D) in 2019, which accounted for 13.9% of its total revenue in the year. This figure also represents 6% of the total R&D expenditure nationwide. Only with great expenditure on R&D comes great rewards. Huawei has always placed R&D as one of the most important philosophy of the company in which the CEO Mr Ren Zhengfei described as the “culture of the wolves”. Huawei has now become the international leader in 5G technology and in 2012 the company overtook Ericsson as the largest telecommunication manufacturer in the world. In 2020, Huawei has also overtaken Samsung and Apple as the top smartphone brand (number of phones shipped). The total revenue for Huawei in 2020 was US$136.23 billion and the company’s net income was US$11.08 billion.

The second most innovative Chinese company in the world according to BCG is Alibaba. One of the most noticeable thing about Alibaba’s innovation is that the company has been working hard on building an ecosystem. The senior management of Alibaba describes it as a community of organisms in which businesses and consumers play an important role. The community of organisms interact with each other through the environment which is the online platform that Alibaba provides. The main focus of Alibaba’s innovation is to keep making this ecosystem more adaptable to the need of the consumers and also making sure that the ecosystem itself utilises the development of technology. The new technologies that Alibaba hopes to utilise in its ecosystem include artificial intelligence, big data science, quantum physics, 5G and many other things respectively. Alibaba has now become one of the most important retailers and e-commerce companies in the world and the company is also heavily involved in many other areas. In 2020, Alibaba was rated as one of the world’s largest artificial intelligence company and also one of the most important venture capital firm. This accomplishment by Alibaba will not be possible without the company’s desire and emphasis on innovation.

The third most innovative Chinese company in the world according to BCG is Tencent. Since its founding in 1998, the innovation of Tencent has never stopped. From the instant messenger QQ to the social network WeChat, the online services developed by Tencent have connected not just the people in China but also the people from all around the world. WeChat now has over 1 billion monthly active users worldwide out of which 900 million are Chinese. Tencent also plays a major role in the gaming industry of China, Tencent Games which is a subsidiary under Tencent is now the world’s largest video game vendor. Tencent Games now contributes nearly half of Tencent’s total revenue. The success of Tencent is built on its close relationship with young people in China and especially the community who were born after 2000.

The fourth most innovative Chinese company in the world is Xiaomi. The key characteristics of Xiaomi’s innovation is the company’s ability to collaborate with new startups. Xiaomi now forms hundreds of partnership with startups in the areas of drones, air purifiers, power banks, scooters, electric fans, smartwatches and TVs. Xiaomi has now become the fourth largest smartphone manufacturer in the world. The company also secures the leading position in the smartphone market in both China and India. Founded in 2010, the company was ranked as the youngest company on the Fortune Global 500 List in 2019.

The fifth most innovative Chinese company by BCG is JD.com. The most noticeable innovation commitment by JD.com is the company’s determination in the implication of artificial intelligence. Richard Liu, the CEO and Chairman of JD.com has repeatedly emphasised on the importance of AI to the future development of the company. He believes that AI is a core element of the company’s future business strategy. Under this initiative by Richard Liu, JD.com has now formed research institutes with many leading universities in China and also internationally renowned AI companies to push forward this agenda. The main focus of this research is on the company’s supply chain. JD.com's Global Supply Chain Innovation Centre is hoping to develop the future of smart supply chains by using data, natural language processing, image recognition and machine learning. JD.com today possesses the largest drone delivery system in the world as a result of the company’s emphasis on innovation and R&D. The company is now heavily engaged in the implication of robotics in its delivery system and also the development of driverless automobile.