The Chinese market is increasingly attractive to US technology companies

Tencent Technology Zhu Xu Dong reported on June 4

The attractiveness of the Chinese market to US technology companies is growing. Although so far no U.S. Internet company has really succeeded in China, a new wave of U.S. technology companies has arrived in China.

From the second half of last year to the first half of this year, it is almost the most concentrated period for emerging technology companies in the United States to enter China. This includes both social giants such as LinkedIn and mobile internet stars such as Uber. In addition, the superstar technology company Tesla also formally started sales of cars in China in the first half of this year.

In addition, Airbnb, Duolingo and other companies did not officially announced their entry into China, but the Internet community in China has been very active or has achieved good results. Facebook also plans to open a sales and service office in China. Flipboard, which entered China by the end of 2011, recently announced the resumption of its investment in the Chinese market and started its recruitment in China.

The biggest feature of this wave of U.S. technology companies entering China is that they are closely linked to the mobile Internet. In the era of PC Internet, no American Internet company has succeeded in China, but in the mobile Internet era, the opportunity has come again.

Mobile Internet opportunities and challenges co-exist

In her 2014 internet report, Mary Meeker, the Internet, specifically listed China separately and introduced the development and opportunities for China's mobile Internet. From the mobile Internet point of view, China's mobile Internet users account for 80% of Internet users, ranking first in the world.

Such a big market is China's biggest attraction for the U.S. mobile internet company. These U.S. companies tend to be mobile first, and now they need to be "China first."

In the era of PC Internet, localization is a term often spoken by Internet companies in the United States, but in the mobile Internet era, product localization is just a very basic job. Behind the localization of products, more importantly, the localization of operations and services. This challenge has not changed because of the mobile Internet.

For example, LinkedIn's products are fundamentally for everyone in the world and only require some fine-tuning of the Chinese market. But in operation and service, you need to be very localized. So LinkedIn in China carried out offline activities - LinkedIn influence, but also has been trying to improve the speed of access for Chinese users.

Another example is Evernote. With its strong brand capabilities, Evernote entered China in mid-2012 and is well-positioned to operate locally. Although Evernote is not the leader in terms of market share, as a U.S. mobile Internet company, its performance in China is still remarkable.

For U.S. companies, the biggest change in the mobile Internet era is the channel. Apple's App Store makes it easy for developers to distribute mobile apps to every market in the world. For example, after more than one million users a week in China, many neighboring countries launched English learning courses for Chinese users in their iOS applications.

However, the decentralization of the domestic Android market, multi-neighbor CEO Louis is very troublesome. Google Play is not working in mainland China, and China has a large number of third-party application stores, to maintain multiple channel applications at the same time for US companies is very difficult. And because this is too troublesome, even appeared AppInChina this kind of help overseas company uploads the application to each big domestic Android application store's company.

Different companies have different strategies to enter the Chinese market

In the past, technology companies often set up their Chinese affiliates in China, but their products and services are not particularly beneficial to Chinese users. And this wave of mobile Internet into China, most companies have found one or more user pain points.

Take LinkedIn as an example. Before it entered China, it had nearly 300 million users in the world and could have a strong network effect on the Chinese market. At the same time, LinkedIn has its own unique value to Chinese companies looking to recruit overseas staff or to overseas companies looking to recruit Chinese employees.

LinkedIn founder and chairman of the board, Reid Hoffman, told Tencent Technologies in an interview that the reason LinkedIn was so late to enter the Chinese market is to do a good job in other markets to pave the way for entering China Good network effect. As an Airbnb investor, he said Airbnb's reason to enter China now is that travel itself is a global one, while China has a large number of outbound travelers.

Nate Brechik Jack, an Airbnb CTO, also told Tencent Technologies that their first step in China was to do outbound travel first. It also takes advantage of its more than 600,000 spaces in 192 countries around the world.

In addition, although ordinary users can not access Facebook in mainland China normally, as a global advertising platform, Facebook can find a large number of advertisers in China, such as game companies, foreign trade e-commerce companies and popular tourist attractions. So Facebook set up offices in mainland China has become a way to enter China.

Chinese internet companies march into the United States

While Internet companies in the United States are entering the Chinese market, Chinese Internet companies are also aggressively marketing the global market, especially the U.S. market.

A partner at a well-known investment company in the United States told Tencent Technologies that although many U.S. companies are on the Chinese market, the bigger trend now is for Chinese companies to seize the U.S. market. Among the ways in which Chinese companies enter the United States are investment, cooperation and even direct product launches.

From an investment perspective, the most obvious examples are Tencent and Alibaba, both of which have invested in a number of Internet companies in the United States in recent years. Among them, Tencent invested in Fab, the game video recording company Kamcord and several game companies in the United States. Alibaba's investments in the United States include ShopRunner, a logistics service company, and Tango, a mobile social application.

In terms of cooperation, at present, Chinese companies have not had any very good cases in the United States. WeChat has some U.S. partners, but it is only currently trying out water. However, on the product, China already has a number of Internet companies began to enter the United States market.

The long-established state-owned 3G portal parent company, which was listed in the United States last year, has become very popular in the Android market in the United States and has long been at the forefront of the Google Play application ranking. Cheetah Mobile, which is listed in the United States this year, also has a Clean Master, which is very popular in the U.S. market.

The reason why these products can enter the US market, it is important to take advantage of Google Play distribution channels, and many of these products are tools, there is not much of the geographical user habits differences.

Overall, the mobile Internet has made the world a lot more flat, giving the Chinese and US Internet companies plenty of opportunities in each other's markets. However, if you can not find your own characteristics well and solve the problems of product operation and localization of services, chances may always be just a beautiful vision that you can see but can not achieve.