Future Watch, China's Big Data Ecosystem Update
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OTSIKKOALAOTSIKKO, KUUKAUSI VUOSI
CHINA’S DIGITAL LANDSCAPE AND RISING DISRUPTORSMODULE 2.9 BIG DATA
AUTHORS
Dr. Edward TseFounder and CEO
Team Finland Future Watch Report, December 20172
Mr. Bill RussoManaging Director and Auto Practice Lead
Mr. Alan ChanAssociate
BIG DATA AND ANALYTICS
TOPICS
Team Finland Future Watch Report, December 20173
1. WHAT IS BIG DATA?2. CHINA’S BIG DATA INDUSTRY AND INNOVATORS3. FUTURE OPPORTUNITIES AND IMPLICATIONS FOR TEAM FINLAND
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 20174
WHAT IS BIG DATA: THE 5V’S CHARACTERISTICS OF BIG DATA
Source: Literature research, Gao Feng analysis
BigData
Volume
Value
Veracity Variety
Velocity
The massive amount and growth of data can overtake traditional storage solutions
Data is continuously generated at a unprecedented speed, making it harder to manage and analyze in real-time
Traditional data management fails to handle different types of unstructured and structured data
Data monetization – extracting business insights and revenue from data
Trustworthiness of data in terms of data consistency, completeness, authenticity, availability and accountability
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 20175
DATA WILL CONTINUE TO GROW EXPONENTIALLY
Note: 1 petabyte = 1 million gigabytes; 1 zetabyte = 1 million petabytesSource: IDC Data Age 2025 Study, Gao Feng analysis
Information Created Worldwide
Zeta
byte
s (Z
B)
Key Drivers
Proliferation of mobile devices and digital sensors
24/7 digital lifestyle Advances in computing
power and data storage capabilities
Data as a new competitive advantage for companies
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 20176
DATA HAS BECOME ONE OF THE MOST STRATEGIC ASSETS FOR LEADING TECHNOLOGY COMPANIES
Source: Literature research, Gao Feng analysis
Facebook Google
Facebook collects 500 terabytes of data daily, including 2.5 billion pieces of content, 2.7 billion likes and 300 million photos
Google processes over 40,000 search queries every second on average (equivalent to over 3.5 billion searches per day worldwide)
Alibaba 2017 Double 11
Shopping Day
Recorded RMB 168 billion gross merchandise volume (GMV)
Alipay processed 1.5 billion payment transactions during the event (up 41% from 2016)
Personalized newsfeed; Targeted ads
Personalized search results; Targeted ads
Shopping recommendations;
Targeted ads
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 20177
DIFFERENT TYPES OF DATA REPRESENT DIFFERENT LEVELS OF VALUE CREATION
Source: Literature research, Gao Feng analysis
When
How
What
Who
Where
Breadth of Data
Proprietary response data & transactional data, and individual consumer triggers such as life event
Known purchase behaviors – tags and shopping history
Likelihood to make a purchase, shopping attitudes, personal preferences and mode of consumption
Self-reported hobbies, interests and activities
Home ownership, duration of residence, home, value, purchase amount and date, asset value
Household life-stage segmentation, socio-economic, and household characteristics
Includes age, income, marital status, children, education, net worth, occupation, etc.
Contact information, physical & virtual appearance
Most Predictable
Baseline
DescriptionEnables Answers to
Key Questions:
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 20178
BIG DATA HAS ENABLED MANY PERSONALIZED CONSUMER SERVICES
Source: Literature research, Gao Feng analysis
Usage-based Insurance:Costs are dependent upon type of vehicle used, measured against time, distance, driving behavior and location
Personalized Newsfeed:Stream of content based on the user’s interests, browsing history, demographics, and friends
Targeted Ads:Ads that are targeted to specific micro-segments
Micro-segmenting
Consumer/User Data
CASE EXAMPLE
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 20179
BIG DATA IS ALSO RESHAPING THE INDUSTRIAL SECTOR
Source: Literature research, Gao Feng analysis
Mass customization:C2B customer-driven small-patch manufacturing based on customer personality, preference and use cases
Predictive Maintenance:Reduce process flaws, save time and costReal-time fraud detection
Digital Plant:Real-time factory performance analysisReal-time factory reschedulingProduction quality and yield management
Machine-generated Data
CASE EXAMPLE
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201710
THE PUBLIC SECTOR IS ALSO EMBRACING THE BIG DATA OPPORTUNITIES
Source: Literature research, Gao Feng analysis
Public health and transports:National database of individual’s health for future healthcare policy planningTransportation data for designing better cities
Public security:Surveillance cameras with face recognition system for public security purposes
Opening up of tax data:Accelerated the credit investigations of local banks and their lending efficiency to small companies
Government institutions Policymakers
City Data
CASE EXAMPLE
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201711
IN PARTICULAR, BIG DATA HAS BECOME THE BACKBONE OF SMART CITY
Source: Literature research, Gao Feng analysis
ApplicationsAnalyticsDataConnectivity and Sensors
(IoT)
V2X connectivity
Embedded modem
On-board diagnostics (OBD)/ telematics
GPS sensors
In-car cameras
Temperature/ environmental sensors
LIDARS
Accelerometers
Smart Cities Value Chain
Location
Speed
Origin-destination
Images
Videos
Weather
Precipitation
Pollution
Noise
Charging data
Big data
Data fusion/ amalgamation
Visualization tools (e.g. heatmaps)
Computer vision
Machine learning
Artificial intelligence
Sense-making
Real-time traffic conditions
Congestion prediction and avoidance
Automatic incident/ exceptional event detection
Parking availability
Seamless intermodal public transport
Dynamic pricing
On-demand mobility
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201712
FUTURE TRENDS IN BIG DATA
Source: Literature research, Gao Feng analysis
Better Data Analytics
Software
More non-coder-friendly data analytics tools will be developed, such as Microsoft and Salesforce
Demand for real-time streaming insights into data will grow, served by contemporary tools like Kafka and Spark
More artificial intelligence technologies will be built-in to data analytics software to enhance its predicative capabilities
Organizational Readiness
Most of the companies will become data businesses Chief Data Officer will see a rise in prominence Continued shortages of data professionals
From Big Data to “Fast Data” and
“Actionable Data”
Fast data - processing of massive data in real time to gain instant awareness and detect signals of interest on the spot
Actionable Data - predictive analytics and what-if analysis to prescribe recommendations to enable businesses to take actions with feedbacks
Others Data privacy will become a core issue for business ethics Growing threats of biased data for AI applications Further opening up of government data
BIG DATA AND ANALYTICS
TOPICS
Team Finland Future Watch Report, November 201713
1. WHAT IS BIG DATA?2. CHINA’S BIG DATA INDUSTRY AND INNOVATORS3. FUTURE OPPORTUNITIES AND IMPLICATIONS FOR TEAM FINLAND
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201714
THE CHINESE GOVERNMENT HAS SET AMBITIOUS GOALS IN BIG DATA INDUSTRY DEVELOPMENT TO FOSTER NEW ECONOMIC DRIVERS
Source: Literature research, Gao Feng analysis
China's 2016-2020 Big Data Industry Development Plan By the Ministry of Industry and Information Technology (MIIT)
as part of the nation's 13th five-year plan
To increase annual sales of China’s big data industry (including related goods and services) to RMB 1 trillion by 2020 from an estimated RMB 280 billion in 2015To target a compound annual growth rate of around 30 percent for the industry's sales in 2016-2020To cultivate 10 world-leading big data companies by 2020 and 500 big data application and service enterprisesTo establish 10-15 experimental zones to speed up the industry's development
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201715
GUIZHOU IS ONE OF THE PIONEERING PILOT ZONES POSITIONED AS CHINA’S “BIG DATA VALLEY”
Source: Literature research, Gao Feng analysis
Development of Guiyang as China’s leading big data hub
Guiyang, the capital of Guizhou Province, was typically known for poverty Gui’an New District, a 1,795 sq km suburb area established in 2014, is the strategic heart of Guiyang’s technology aspirationIncentives have attracted companies such as Foxconn, Microsoft, Huawei, Hyundai Motor, Tencent, Qualcomm, Alibaba, Apple, China Mobile, China Unicom and China Telecom28 big data scientific research institutions, and 23 incubators and investment organizations
"The big data industry is a perfect opportunity for Guizhou to develop its economy without introducing polluting industries, while helping its poor population shake off poverty. Big data has also become a magnet for talent, enabling more young people to settle here"
- Jing Yaping, Deputy director of the provincial big data development authority
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201716
THE CHINESE GOVERNMENT IS DEVELOPING A REVOLUTIONARY SOCIAL CREDIT SYSTEM TO RATE THE “TRUSTWORTHINESS” OF ITS CITIZENS
Source: Literature research, Wired Magazine, Gao Feng analysis
Plan for a national social credit systemIn June 14, 2014, the State Council of China published an ominous-sounding document called "Planning Outline for the Construction of a Social Credit System“The system is designed to measure and enhance "trust" nationwide and to build a culture of "sincerity"To launch in 2020 and participation is mandatory
Two leading “experiments”- China Rapid Finance, partnering with
Tencent WeChat (850 million active users)- Seasame Credit, run by Ant Financial
Services Group (affiliate of Alibaba)Rewards and "special privileges" are given to those citizens who prove themselves to be "trustworthy" on Sesame Credit, for example:
- Rent a car without leaving a deposit- Faster check-in at hotels - Use of the VIP check-in at Beijing Capital
International Airport- Apply for Singapore travel without
supporting documents such as an employee letter
- Fast-tracked application to a coveted pan-European Schengen visa
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201717
SESAME CREDIT COLLECTS A HOLISTIC RANGE OF DEMOGRAPHIC, BEHAVIORAL AND TRANSACTIONAL DATA FROM ALIPAY USERS
Source: Literature research, Wired Magazine, Gao Feng analysis
Individuals on Sesame Credit are measured by a score based on five categories
Credit History Does the citizen pay their electricity or
phone bill on time?
Fulfilment Capacity
What is the user's ability to fulfil his/her contract obligations?
Personal Characteristics
Verifying personal information such as someone's mobile phone number and address
Behavior and Preference
What is the user’s shopping habit? What types of products does the user buy?
Interpersonal Relationships
What does their choice of online friends and their interactions say about the person being assessed?
CASE EXAMPLE
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201718
TOUTIAO IS A DISRUPTIVE NEWS PLATFORM PROVIDING HIGHLY PERSONALIZED CONTENT
Source: Toutiao, Financial Times, Literature research, Gao Feng analysis
CASE EXAMPLE
Augmented Reality (AR)Competitive advantages in content generation, distribution and monetization
Toutiao’s exponential growth
Basic facts:By analyzing the features of content, users and users’ interaction with content, Toutiao’s AI-powered algorithm models generate a tailored feed list of content for each individual userNow valued at USD 20Bn (from USD 500M in 2014)Launched in August 2012 based in BeijingFounder: Zhang Yiming100M daily active users in 2017Q1Average daily usage time: 76 minHired Ma Wei-Ying, former assistant managing director of Microsoft Research Asia, to lead its AI Lab
User-generated and professional-generated content in various media forms: text, short videos, Q&As
Provide incubator and media lab services for curated content makers
AI-generated content live feed
Understand user’s emotions and behavioral characteristics through machine learning, analyze and predict user’s profile
Personalized news content – “Thousand people, thousand interfaces”
Technology barrier: Leverage big data to accumulate user understanding overtime
4611
335
107
507
141
2016H22015H2
Total length of read (Billion mins)
Total no. of read (Billion)
No. of articles (Million)
Content Generation
Content Distribution
Content Monetization
Business model: Targeted ads, re-direct traffic to E-commerce sites
Earned USD 869M in 2016 from in-app ads with the goal to reach USD 10Bn by 2020
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201719
DAYIMA IS A LEADING FEMALE HEALTH MANAGEMENT MOBILE APP LEVERAGING DATA-DRIVEN INSIGHTS FOR CROSS-SELLING
Source: Literature research, Gao Feng analysis
CASE EXAMPLE
Company Overview User Big Data Analytics
Launched in 2012, most popular female health management app in China
Basic functions: recording and predicting periods
Also offers customized services, E-commerce platform and online communities
Raised Series E funding in 2015 with 130 Million RMB
Properties and Tags Pyramid (PTP) system
Who is she?
Properties Behavior Tags
24 Years Old
Beijing
Period Cycle 34 Days
Preparing for Pregnancy
Read post: Dysmenorrhea Syndrome
Purchased: Black Sugar Tea
Search: Dysmenorrhea
Data Collection and Cleaning
Big Data Analytics
Customize d Product Recom
me ndation
Dayima
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201720
ZHOUHEIYA, A SPECIALIZED FAST FOOD CHAIN, SPOTTED A NEW PRODUCT OPPORTUNITY BY LEVERAGING BIG DATA INSIGHTS
Source: Literature research, Gao Feng analysis
CASE EXAMPLE
By using Alibaba’s big data analytics service, Zhouheiya discovered that the keyword “crayfish” is searched most during April to August and its sales peak is between May and June
Zhouheiya found out that the target customer portfolio of crayfish highly overlap with their existing one
Consumption of crayfish usually do not cannibalize the demand of other snacks
Historically, braised duck are sold least in spring and July. The gap could potentially be filled by launching new crayfish products
Sold 20,000 units of crayfish within 10 days with a unit price of 69.9 RMB
A Chinese fast-food chain famous for its spicy braised duck
Expanded the product line to crayfish in May 2017
Zhouheiya (周黑鸭 )
Market insights through big data analytics
BIG DATA AND ANALYTICS
TOPICS
Team Finland Future Watch Report, November 201721
1. WHAT IS BIG DATA?2. CHINA’S BIG DATA INDUSTRY AND INNOVATORS3. FUTURE OPPORTUNITIES AND IMPLICATIONS FOR TEAM FINLAND
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201722
FINLAND HAS LEADING ADVANTAGES IN ENERGY, CLIMATE AND TAX TO BECOME THE WORLD’S POWERHOUSE OF DATA CENTER
Source: Invest in Finland, Copenhagen Economics Report: Finland’s economic opportunities from data center investments, Gao Feng analysis
Finland’s leading advantages:Cold weather to chill servers and keep costs down (Invest in Finland indicates that it is easy to save up to 50% on energy costs in Finland compared to other European locations)Over 180,000 lakes in Finland - plenty of water available for renewable energy and cooling needsSpacious country with many potential sites for data center investments (Invest in Finland has identified 36 investment-ready locations )Electricity tax for data centers was reduced to the same level as industrial electricity tax - the most competitive in northern EuropeStrategic location between Asia and EuropeUltra-fast submarine cable
World’s leading tech companies with data centers set up in Finland
According to a Copenhagen Economics report, Finland’s data center industry has the potential to support as many as 32,900 jobs and contribute EURO 2.3 billion a year to the national output by 2025 (3x from now)
Google’s advanced data center in Hamina
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201723
THERE ARE ALSO LEADING BIG DATA SOLUTIONS PROVIDERS IN FINLAND
Source: Literature research, Gao Feng analysis
BIGDATAPUMP is a leading analytics company specialized in big data and cloud transformation
Founded in 2012 based in Turku; by ex-Nokia experts in Microsoft Azure and cloud analytics
Over 100 customer cases in Europe, North America, Asia and Middle East
Turnover in 2016: EURO 3.4M Acquired by Affecto (a leading company for data
and business intelligence solutions in Finland) in Dec 2016
Core competencies: Advanced analytics, data visualization and exploitation of big data
Services: Customer analytics, profitability management, and IoT solutions
Founded in 2009 based in Helsinki
CASE EXAMPLE
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201724
ALIBABA HAS RECENTLY SET UP A JOINT INNOVATION CENTER IN FINLAND TO PROMOTE LOCAL BIG DATA DEVELOPMENT
Source: Literature research, Gao Feng analysis
CASE EXAMPLE
Alibaba Cloud, a cloud computing company affiliated to Alibaba Group, and Eficode Oy, a leading Finnish digital company based in Finland, jointly opened an innovation center in Helsinki in Dec 2017
Alibaba and Eficode formed strategic partnership in Nov 2017 to bring a comprehensive range of Alibaba Cloud offerings to Northern Europe and Nordic companies in the Chinese market
Goals:- To provide a platform to enhance the
collaboration between Nordic and Chinese businesses, researchers and education institutes
- To provide R&D resources and workspace to the local big data sector and related businesses
- To develop solutions that will help enterprises address the digital challenges in business expansion and digital transformation
BIG DATA AND ANALYTICS
Team Finland Future Watch Report, December 201725
POTENTIAL SINO-FINNISH OPPORTUNITIES ON BIG DATA
Source: Literature research, Gao Feng analysis
To attract Chinese tech players to set up data centers in Finland
From China to Finland
Value propositions for Chinese tech companiesFinland’s technical know-how in data centersFinland’s talent pool of data professionalsFinland as a strategic platform supporting the internationalization of Chinese tech companies
Value propositions for FinlandCross-border investmentsJob creationStrengthen Finland’s reputation as the world’s epicenter for data center
From Finland to China
Value propositions for FinlandTo establish Finland’s global technology leadership in big data industryTo form Sino-Finnish cooperation projects and build government connections
Value propositions for ChinaTo benefit from Finland’s best big data technologies and talentsTo accelerate the development of China’s big data industry
Finland’s leading big data companies to establish presence in China’s big data hubs
Remarks: Finnish companies can purchase data from data service providers in China for market intelligence purposes – but China’s cybersecurity law requires foreign technology firms to store certain “important business data” locally, including personal data
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