Opportunity awaits. A window is open and it may not stay open forever. In short, the timing is ripe for Canadian startups and entrepreneurs looking to break into the Chinese market, says Dr. Dongsheng Sun, President of Shenzhen Capital Group.
“I can say firmly that this is a good time for Canadian companies to go to China,” said Dr. Sun, one of a delegation of nine Chinese investors and technology leaders who visited Waterloo Region and Communitech Friday, the start of a multi-city tour of North American startup centres.
Dr. Sun said a combination of government policy, availability of money, enormous market size and an appetite for innovation have created conditions that are ripe for the kinds of tech that Canadians do well.
“Right now what’s lacking in China is original innovation, original technologies,” said Dr. Sun, speaking through an interpreter. “That’s why the [Chinese] government is putting effort into encouraging that kind of development. I think most of the original innovations are in Canada and North America.
“Another reason the timing is good is because with the government’s effort to encourage innovation in China, there may soon be a lot of home-grown innovation in China. So now is the best time to land in China and grab market share.”
Shenzhen Capital is a major state-owned VC firm based in Shenzhen, a city of 12 million with a total of 20 million people in the surrounding area. The company specializes in investments in manufacturing, enterprise software and biotechnology.
The visit by officials from Shenzhen follows up on a visit paid to the region last October by a delegation from Waterloo Region, including Communitech Vice-President Steve McCartney.
Shenzhen Capital is also the sponsor of the Shenzhen Star Competition for entrepreneurs. Friday at Communitech Dr. Sun served as one of the five judges for the competition’s Toronto-Waterloo regional pitch event. A total of 10 companies from Toronto and Waterloo Region – five of them early-stage and five that are more advanced – took part. Four were selected to move on to the next stage of the Shenzhen Star competition, including: O2 Canada, which makes a wearable mask that filters pollution; Medella Health, which makes a smart contact lens that monitors blood glucose levels; Cyclica, which uses Big Data to improve the development of pharmaceuticals; and AOMS Technologies, which makes a fibre optic sensing cable able to generate data in harsh environments.
“Our primary goal here today is this competition,” said Dr. Sun, who served as one of the five judges. “The Star Competition is really going bigger and global.
“By being here, we can see first hand what the companies are like, and we can see if we find any interesting investment opportunities, and perhaps help some enter the Chinese markets.”
Dr. Hongwei Wang, Chief of Talent Investment at Shenzhen Capital
Group. (Communitech photo: Phil Froklage)
Dr. Hongwei Wang, Shenzhen Capital’s Chief of Talent Investment, said Canadian companies shouldn’t be intimidated by the size of the Chinese market or the challenges of operating overseas. Help exists.
“Although the Chinese market is huge and complex it is not particularly hard to enter the Chinese market, said Dr. Wang. “Companies need to take a gradual, step-by-step approach. First establish an office and then collaborate with local partners. A key is to localize products for the Chinese market.”
Certainly O2 Canada qualifies in that regard. O2 Canada’s masks are specifically engineered for the size of faces in Asia, as opposed to those in North America. It has specifically targeted areas in northern China, where air pollution is notorious and people commonly wear masks to cope.
“We were shocked at how bad the [existing] masks are,” said O2 Canada’s founder and CEO, Peter Whitby Jr.
“They look bad and they don’t perform well. So we thought there’s got to be something better.
“I’m super excited [about moving on to the next stage of the competition]. I love our product and think it’s a great fit for China.
“These investors, they get the problem. To win with them judging, it’s validation.”
