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Every smartphone-carrying person in China knows what to do at Café Ruhe: open WeChat, the country’s ubiquitous mobile chat app, and scan the code.

Adam Dean/Adam Dean

At Café Ruhe in Beijing's swish Shuangjing district, a small placard is glued to the table in front of each seat. "Order So Easy," it says.

Next to the text is printed a black and white code. Barely bigger than a postage stamp, it's a portal to a new world flourishing in China, where a wave of innovation has created new ways of doing business on phones that has eclipsed Western rivals. In the process, it has turned on its head much of what has long been thought about China. In this space, no longer are Chinese entrepreneurs copying others. Now, others are copying China, as the country seeks to build Internet commerce into a new platform for growth in a slowing economy.

These made-in-China products are becoming more common as entrepreneurs, foreign and domestic, build a new generation of services now leapfrogging what's available elsewhere.

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"This is a place where we're getting a head start on the rest of the world, because WeChat is really the beachhead of where messaging is going, and everyone is fast following them," Andrew Schorr, an entrepreneur based in Beijing, said recently on the China Startup Pulse podcast. His startup, Grata, allows companies to conduct customer service through WeChat in powerful new ways. An insurance company, for example, could receive car accident photos from a user's phone, and then send that person turn-by-turn directions to the nearest service centre.

The innovation is driven in part by Chinese consumers, many of whom have never had a desktop computer and until recently had no alternative to the plodding bureaucracy of the country's banks, hospitals and shops – many of them state-owned, few of them eager to improve customer service.

Fully 96 per cent of Chinese online shoppers now make a purchase monthly, well ahead of the 54 per cent in Canada and 72 per cent in the United States, according to a PricewaterhouseCoopers survey. Far more people in China use phones to trade stocks, book restaurants and shop online than in the United States.

"Chinese users were less used to previous technologies, so they moved faster to the next step," said Thomas Graziani, co-founder at WalktheChat, a WeChat marketing agency.

Every smartphone-carrying person in China knows what to do at the Cafe Ruhe table: open WeChat, the country's ubiquitous mobile chat app, and scan the code. Moments later, the menu pops up, complete with pictures and an order button. There is no other app to download and payment happens on the phone, with a fingerprint scan to authenticate WeChat wallet, which for many in China is already linked to bank-card information. It takes roughly five seconds.

The order arrives minutes later, each latte and espresso delivered to the seat from which it was ordered. The code is tied to that precise location.

What has started in China is already placing the country's companies in the lead elsewhere. In India, five of the top 10 mobile-phone developers are Chinese, according to AppAnnie statistics. Only three are American. Brazil's top 10 has four Chinese companies, while Russia has as many Chinese companies as Russian on its leaderboard.

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Chinese Internet innovation has percolated inside an online space heavily stifled by the state. China is a global leader in tracking and censoring its online users – but some of that content-blocking has a dual purpose in barring Western Internet titans from gaining a foothold. Facebook, Twitter and Google are all inaccessible to most Chinese users.

That has provided Chinese companies a playground for experimentation, and WeChat has surged ahead of Western rivals such as Facebook in providing a platform for businesses to operate.

On WeChat, other services let users book doctor appointments, pay traffic tickets, load subway cards, locate public bicycles, report environmental problems and view traffic cameras. This, all from the same app service used to share cat pictures, birthday invitations and job applications.

Beijing has sought to capitalize on what's happening, seeing e-commerce as a new pillar of economic growth, with hopes that WeChat and its rivals can be China's new factories. Online spending is already up 36 per cent in the first nine months of this year, making it the brightest light in an otherwise dim economic landscape.

Premier Li Keqiang recently announced $22.1-billion (U.S.) in new spending to bring better Internet to the Chinese countryside, in hopes of sparking even more.

"The government realized they don't want to be a low-value manufacturing economy, so there's an awful lot of emphasis on innovation, particularly in tech," said Mark Tanner, founder of China Skinny, a Shanghai-based marketing and research agency.

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Still, innovation continues to be a major problem for China, which lags on an array of fronts, from electronics to design and engineering. And it's not clear China will retain its position amid foreign competition. Facebook's eye-popping $22-billion acquisition of WhatsApp is seen as a bid to close the gap with WeChat.

For now, the Chinese lead offers a chance to figure out new business models that can one day be exported. Magnet Technologies, a small startup in Shanghai, is building software on the WeChat platform to let customers at Mercedes-Benz Arena preorder and pay for hot dogs and hamburgers, skipping long lines.

At Café Ruhe, meanwhile, the company is already building new ideas.

"In the future, our customers may be able to see on their phones where the main ingredients in their food are from," said Yin Qigao, who manages the Shuangjing location. There are other benefits, too. He figures the app will let him cut labour costs by 10 per cent to 15 per cent, while at the same time serving up a few more smiles with his caffeine.

"We want to be more competitive – and have our customers get joy out of this."

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