Execs Jump On China Tech Train From Google, CICC
Two high-profile executive moves are highlighting the recent attraction of China’s tech story to both domestic Chinese and foreigners, lured by breakneck growth that produced the world’s biggest-ever IPO last month with the $24 billion IPO of e-commerce leader Alibaba (NYSE: BABA). The first move has seen former Google (Nasdaq: GOOG) executive Jai Mani leave his position in a California-based start-up to take an India-based job at fast-rising Chinese smartphone sensation Xiaomi. The other has seen well-known Chinese financier Levin Zhu jump ship from the top post at CICC, China’s oldest investment bank, reportedly to start his own company involved with Internet-based finance.
Both of these moves also highlight the big potential for homegrown Chinese tech start-ups, which are rapidly gaining on their older and larger multinational rivals. That element of the recent high-tech rush was evident last month, when a longtime top executive at Microsoft’s (Nasdaq: MSFT) China operations jumped ship to take a high-level position at domestic homegrown search leader Baidu (Nasdaq: BIDU). (previous post) Such defections are likely to become more common as opportunities increase in China’s tech space, or at least until the current wave of tech euphoria eases.
All that said, let’s jump right into the latest stories of high-tech executive moves with Jai Mani, a former up-and-coming Google manager who was hired to work at Xiaomi by the company’s international operations chief Hugo Barra. Many may recall that Barra himself made headlines last year with his own high-profile defection from Google. (English article) According to the latest reports, Mani left Google about a year ago to join a start-up, but has now joined Xiaomi to head its India sales operation. His move comes just months after Xiaomi formally launched its mid- to low-end smartphones in the market.
Barra’s defection to Xiaomi last year drew attention to the lure of fast-growing Chinese tech start-ups. Xiaomi hired Barra specifically to lead its global expansion, following big success in its home China market. That expansion has taken the company into Southeast Asia and India so far this year, and is likely to move to other developing markets as well. Mani is likely to have a big challenge ahead, as India is a highly competitive and price-sensitive market.
Next let’s look at Levin Zhu, whose Chinese name is Zhu Yunlai and who is also the son of former Chinese Premier Zhu Rongji. CICC announced the resignation of the younger Zhu in a press release, even as the investment bank is reportedly working on a plan to make a multibillion-dollar IPO in Hong Kong. (English article; Chinese article) Reports on the move say Zhu’s departure could delay the IPO, but I’ll focus instead on his future plans after leaving CICC.
A major newspaper in his hometown of Shanghai has reported that Zhu wants to combine his background in finance with the rapid rise of online and electronic technology to start a high-tech finance firm. Such companies have been springing up like weeds in China lately as Beijing opens the sector to private investment. New firms run the range from P2P platforms that let individuals lend money to each other, to savings products like Alibaba’s web-based Yu’ebao, which lets customers put idle cash from their electronic payments accounts into money market funds.
Zhu is fairly well respected in the finance sector, though it’s worth noting that CICC has been losing its market-leading position recently despite the huge advantages it enjoyed for years. The younger Zhu probably isn’t quite as financially savvy as his father, who was the architect of many of China’s early economic reforms. But his strong family and business connections in China’s financial hub will certainly give him some nice advantages if and when he decides to start his own company.
Bottom line: New moves by a US and Chinese executive spotlight the growing attraction of China technology start-ups due to their big growth potential at home and abroad.
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