The world has become so used to following the lead of the United States in marketing and payments technology that we U.S. marketers tend to take our leadership for granted. A spate of recent reports reveals, however, that even if China still has a ways to go before becoming the global leader in marketing and payments tech, the country certainly has become a dark horse. Welcome to the future – which is looking increasingly like China’s future.
By Rick Ferguson
Recent reports reveal that China is becoming the global leader in arguable the two most important fronts in marketing technology: mobile payments and AI. Here’s the latest:
Mobile Payments: Granted, mobile payment adoption in China is driven largely by a lack of other alternatives to non-cash payments in the country. Still, the future of payments – and their intersection with loyalty – is mobile, and China is now the clear global leader in mobile payments. A few stats:
- The South China Morning Post revealed recently that mobile payments reached $5.5 trillion dollars in 2016 – more than half of China’s total GDP and more than 50 times the value of mobile payments across all services in the U.S.
- CRI reports that the Asia-Pacific region leads the world in mobile payment services, with 53 percent of Internet consumers paying for goods and services through apps, compared to 35 percent of European consumers and 33 percent in North America.
The China-to-West comparison on mobile payments insn’t precisely apples to apples, as most mobile payments in China are made via QR code, which works across the wide variety of Chinese mobile devices, rather than via mobile wallet. Still, it’s only a matter of time before sophisticated mobile payments arrive in China – and with the market established, it may well be that China sets the rules for mobile payments and loyalty globally, rather than the US.
Meanwhile, the New York Times reports
that the Chinese government is pouring vast sums of money into AI research to fund private-government partnerships, start-ups, and academic research. While much of the research into AI is designed to fuel such social activities such as predicting crime and alleviating traffic jams – as well as fueling such peculiarly Chinese governmental activities as censoring the internet – it isn’t a stretch to believe that much of this research will find its way into marketing activities as well. European AI researchers who may once have thrived in Silicon Valley are now conducting their work in Shanghai – and it may very well be that Chinese companies who set the pace in marketing AI rather than US firms. For example, the Times reports that Baidu, China’s answer to Google, has opened a joint government-company AI laboratory.
Right now, China remains a step behind the US – but may take first place before to much longer, if the Trump administration has anything to say about it. Money quote from the Times:
Beijing is backing its artificial intelligene push with vast sums of money. Having already spent billions on research programs, China is readying a new multibillion-dollar initiative to fund moonshot projects, start-ups and academic research, all with the aim of growing China’s AI capabilities… China is spending more just as the United States cuts back. This past week, the Trump administration released a proposed budget that would slash funding for a variety of government agencies that have traditionally backed artificial intelligence research. ‘It’s a race in the new generation of computing,’ said James Lewis, a senior fellow at the Center for Strategic and International Studies. ‘The difference is that China seems to think it’s a race and America doesn’t.'”
With mobile payments and AI becoming an increasingly important part of the marketing mix, the question begs: Will America lead the way to the next generation of marketing technology, or will China? The answer to that question may rely just as much on the ballot box as it relies on the boardroom.
Rick Ferguson is CMO and Editor in Chief of the Wise Marketer Group.