The Unknown Chinese Giant...
The Chinese actually invented paper money. They were the first to use it – more than 500 years before the Europeans. But they found something they like so much better today that the use of paper money is now done (for the most part) in China’s major cities. What the heck is going on? It’s nothing short of a technological revolution... It might be the greatest technological revolution that I have seen in my career. It is certainly happening faster and on a larger scale than anything I have ever seen. In a few short years, China has leapfrogged all of our old “legacy” industries... The phone company and the cable company? They’re dinosaurs... You don’t need ‘em. The traditional bank? Irrelevant. Cash? Who needs it? Heck, people in China don’t even answer their mobile phones... Today, in Beijing and Shanghai, you have better luck reaching people on WeChat than by phone. (That’s why Brendan said I needed to get WeChat to do business.) And if you want to split the tab for dinner, don’t reach for your wallet… (They don’t like to carry one anyway.) Instead, one person pays the bill by tapping on their phone – through either WeChat or AliPay (which is like PayPal in China). Then everyone else pays that person using their phones – again through WeChat or AliPay. No wallet needed. Seriously. It’s a lot faster than fumbling over change, or waiting on your server to return with your credit card.
“I don’t carry a wallet or purse,” an executive told me during our first meeting in Beijing. This executive saw that I was a bit confused. So she smiled, held up her mobile phone, and said something shocking: “I do everything through WeChat or AliPay.” It turns out, she’s not alone. Most people in major Chinese cities do exactly the same thing... They don’t carry cash or credit cards, and they don’t use their cellphone number as their primary means of communication. Instead, they use WeChat, which is like having Facebook, PayPal, your phone, and text messaging all in one app. It might be the greatest technological revolution that I have seen in my career. It is certainly happening faster and on a larger scale than anything I have ever seen. WeChat has more than 700 million active users. That’s more than twice the number of people that live in America. “Did you use WeChat or AliPay two or three years ago?” I asked her. “No. Nobody did, really.” Think about what that means... In the last two years, paper money in China has been replaced almost completely... by something that nobody really used just two or three years ago.
58 January 2018
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