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Why China's tech players are set to dominate

Chinese technology companies are just getting started in their quest to go global and the West should take it very seriously, a veteran Israeli entrepreneur and investor told CNBC.

Speaking on the sidelines of the Boao Forum in China's Hainan province, Yossi Vardi, chairman of International Technologies, said Chinese tech companies such as Alibaba and Huawei have developed strong presence in the West and more are following in their footsteps.

"Chinese companies are working very hard to develop [their] international footprint and by now you begin to see them all over the place," said Vardi , who is one of Israel's tech pioneers with involvement in more than 70 startups.

Visitors crowd the Huawei stand at the 2016 CeBIT digital technology trade fair on the fair's opening day.
Sean Gallup | Getty Images
Visitors crowd the Huawei stand at the 2016 CeBIT digital technology trade fair on the fair's opening day.

Smartphone makers Huawei and Xiaomi made headlines earlier this year with their prominent presence at the Mobile World Congress (MWC) in Barcelona. Xiaomi launched its flagship Mi5 smartphone at the MWC, while a top Huawei executive predicted his company will oust smartphone giant Samsung from its pole position in the industry by 2021.

Data from International Data Corporation (IDC) showed that in 2015, three Chinese companies - Huawei, Xiaomi and Lenovo - were among the top five global smartphone makers by shipment volume.

Vardi added abundance of foreign-educated talent returning to China are helping these Chinese tech companies to scale and approach markets better. The transfer of technical know-how, picked up from their Western peers, are making it possible for China to develop software and user experiences for their domestic market, which usually require advanced skills that have mostly been associated with the West.


"They are going to export it [to global markets] once they have tweaked it," said Vardi. "It's only a question of time, I have no doubt about it."

But Vardi said Chinese tech companies also have China's massive domestic market of 1.4 billion people to lean on, which remains an important "low hanging fruit."

"I think there is still a lot of penetration to be done [domestically]," he said.

Alibaba recently surpassed 3 trillion yuan ($463 billion) in transactions in its fiscal year to March, demonstrating the appetite for consumption among Chinese customers.

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