China’s Unicorns Concentrated in Four Cities: Ren Zeping


A new report says that China’s unicorn start-ups are primarily concentrated in the four cities of Beijing, Hangzhou, Shanghai and Shenzhen, and primarily dependent upon Internet-based business models.

The term “unicorn” has risen to the fore of international finance since it was first coined by venture capitalist Aileen Lee in 2013, to refer to a startup company valued at more than USD$1 billion.

The term has also become a commonplace in China’s financial media, given the comparatively large number of unicorns in the world’s second largest economy.

Data from CB Insight indicates that there were a total of 237 new unicorns during the period from 2013 to March 2018, of which China accounted for the second largest share (26.16%, or 62) after the United States (49.78%, or 118).

In a new report Ren Zeping ( 任泽平), vice president and chief economist with Evergrande, says that Chinese unicorns are primarily concentrated in the four cities of Beijing, Hangzhou, Shanghai and Shenzhen.

According to the report as of March 2018 China was host to a total of 126 unicorns in 15 different industries scattered across 10 cities. They had a total value of USD$625.3 billion, for an average value of 4 trillion yuan.

“Looking at the list of industries, there is a high level of concentration in culture and entertainment, e-commerce, vehicle transportation and fintech,” said the report.

“The foundation for these enterprises is the use of the Internet as a carrier for development. Number one on the list are entertainment and e-commerce, each with 18 enterprises accounting for 14.17%.

“In terms of geographic distribution over 80% of unicorns are concentrated in the four cities of Beijing, Shanghai, Shenzhen and Hangzhou.”

Beijing is currently host to the largest number of unicorns, with 58 in total and a total valuation of USD$336.1 billion.

While Shanghai is host to twice the number of unicorn companies as Hangzhou, their total valuation is still lower than that of unicorns in the Zhejiang province capital.

Shenzhen ranks last out of the four cities in terms of the valuation of its unicorns, at USD$19 billion in total.

Over 65% of Beijing’s unicorns are concentrated in “cultural content,” big data and artificial intelligence, while around 50% of Shanghai’s unicorns are “Internet Plus” enterprises such as Yiguo, Xiaohongshu and

In Shenzhen 45% of unicorns are tech driven, while most of Hangzhou’s 14 unicorns are concentrated in e-commerce and Internet finance, and over half have developed within the “Alibaba ecosystem.”

Ren says that the distinguishing feature of the Chinese unicorn is “technological innovation + (Internet) platform ecosystem + hi-tech area + policy support.”

“In terms of innovation, [Chinese unicorns] can be divided into platform ecosystem types and technology driven types,” said the report.

“The platform ecosystem type creates platforms on the Internet, and does not directly make contact with the actual business, similar to a third party establishing a linking bridge between real life businesses and consumers.

“The technology-driven types employ technology as their key driver, such as big data, cloud computing, artificial intelligence, or the blockchain.”

According to the report pproximately 50% of Chinese unicorns are affiliated with tech giants Alibaba, Baidu or Tencent to varying degrees. 27 have some ties to Alibaba, 37 are affiliated with Tencent, while 16 are involved with Baidu.