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'Uberification' and more in Chengdu's bustling startup scene

Monday, November 9, 2015 - 05:50
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Tianfu Software Park Business Incubator (above) is located in the Chengdu Hi-Tech Zone (a 130 sq km park set up in 1988) and is home to about 180 incubator startups.

Singapore

AS Singapore sets its sights on making one-north - a dusty, industrial site earlier - its future hub for entrepreneurship and innovation, China is looking at Chengdu for its next tech behemoth.

Known as the home of pandas and spicy delicacies defined by the fiery Sichuan peppercorn, this major city in western China is also where the young-at-heart party like everyday's a weekend, according to word on the street.

But behind that facade of a laid-back, unhurried way of life, the tech ambitions of Sichuan's provincial capital are stirring. The Chengdu Hi-Tech Zone (CDHT), a 130-square-kilometre park set up in 1988, plays host to big names in the tech world - like Intel, Dell, Texas Instruments and Foxconn (whose Chengdu facility now produces two-thirds of the world's iPads). There's also a growing pool of young, hungry entrepreneurs who have come from all over the world to build their dream businesses.

"Chengdu has historically been open and inclusive (to new technologies and migrants)," Wang Yi, a Chengdu-based archaeologist and curator of the Jinsha Site Museum, told visiting reporters in October. A case in point today would be Uber.

Despite having welcomed the San Francisco ride-booking service barely a year ago, Chengdu is now Uber's No 1 city globally in daily completed trips, beating even New York. In a recent 100 days, close to 3.6 million requests were made in Chengdu for People's Uber+ (a new feature allowing two users to share a ride if they are going in the same direction) - an average of 36,000 requests per day.

"Chengdu has been at the forefront of developing and testing new products that better serve China, and it has the potential of bringing them to the rest of Uber cities in the world," an Uber spokesman told BT.

He credited this to the local government's support for using innovation to advance traditional industries under its Internet+ national strategy, even though Chengdu is fundamentally a sweet spot for Uber and the like (China's Kuaidi Dache and Didi Dache). The city has 14 million people - but only two subway lines.

The Uber China team, recently invited to a "high-level conference" by the Sichuan provincial government, was "very warmly received", the spokesman added. "We were impressed they all know well of Uber's product features, social benefits, etc."

"Uberification" - the rise of mobile on-demand services - is dominating the Chengdu startup scene. Lai Yi Huo (which in Mandarin means "to bring a fire") is an Uber for hotpot; it delivers everything you need for a steamboat meal to your doorstep. 1919 ("to desire alcohol", in Mandarin) is an Uber for liquors and wines; it even promises delivery within 19 minutes. Llama (which will launch in November) is an Uber for personalised videos, which you can direct and pay for remotely.

Chengdu is also the base of Camera 360, one of the world's most popular camera apps with over 200 million users worldwide. Since 2010, the startup has snapped up over US$23 million in investments. It has opened offices in Tokyo and Beijing. The average age of its 200 employees is 27.

Said a Camera 360 spokeswoman: "Chengdu's startup scene is getting more competitive. Today's young people choose to join startups as their interests are in entrepreneurship and innovation. Many startups too choose to start from here and go global."

Pinguo Tech, Camera 360's parent company, was in fact started in the Tianfu Software Park Business Incubator located in CDHT. It's one of 20 renowned mobile Internet companies to have successfully transited from idea to incubator to accelerator to market - a comprehensive four-stage startup process.

Among the benefits the incubator offers are free office space of up to 70 sq m for a year, access to over 100 million yuan (S$22.3 million) in early- stage venture capital and the opportunity to eventually settle and enjoy industry connectivity in Tianfu Software Park's Industrial Park. It has approved some 700 ventures since 2007, over 180 of which are currently undergoing incubation.

Incubators in Chengdu more than doubled from 84 in 2014 to over 200 this year, according to Wang Yujia of Shi Fei Ka Fei, a private sector-led incubator which runs its own marketing agency and 50-million-yuan angel fund for tech startups. He said: "The investment climate in Chengdu really got better this year, although it's still lagging behind that of Beijing, where startups approach investors at idea stage versus at product stage here."

Asked if there are concerns of a startup bubble, a spokesman from the Municipal Government Affairs Service Center said that as entrepreneurship is a market-driven activity, there will be failures and successes; the government's role is to create a conducive, fair environment in which entrepreneurs can compete. Moreover, entrepreneurship is encouraged as there are not enough jobs for the growing number of fresh graduates in the country - over seven million in China, 200,000 in Chengdu in 2014.

The support for entrepreneurship and innovation is aligned, too, with Chengdu's planned economic shift from "Made in Chengdu" to "Invented in Chengdu" - similar to Singapore's very recent economic transformation strategy to move from value adding to value creation.

Singapore-Sichuan Hi-Tech Innovation Park (SSCIP) is a joint effort towards that objective. The 10.34 sq km park in CDHT to be completed in 2020 has secured commitments from 16 companies (mostly in biomedical sciences and interactive digital media) to set up shop with a total investment value of over 19 billion yuan.