You have probably never heard of Xiamen before, just like us – it is a dynamic medium-size town (by Chinese standards) with a population of “just” 4 million (unlike Beijing, which has a status of Mega City with over 20 million residents). The city of Xiamen was one of the rare harbors open towards the west in the 19th century, and one of the four original special economic zones open for investments and commerce in the early 80-ies in the last century, when China has begun with economic reforms that formed its position as one of the most powerful economic countries in the world.
Why was Xiamen chosen to host Asia Beat?
Asia Beat gathered over 3000 participants and around hundred Asian startup projects/teams, with a few exceptions from around the world (China, Singapore, South Korea, Taiwan, Indonesia, Japan, Israel, USA, Canada – and Croatia). Our project was one of the few projects from Europe, that’s why we were especially interesting to the visitors. The conference hosted representatives of numerous investment companies from China and around the world, accelerators and other institutions important for the development of startup projects, such as Top20, YC, 500 Startups, Blue Startup, etc.
Of course, numerous lecturers who gave lectures on different interesting topics about the specific moment in the development of China were also participating. China has to even more open to the rest of the world to increase or even maintain an extraordinary economic growth that has been achieved over the past years. The Chinese industrial development was based on the intensive working sectors, but is today turned to innovation and creative industries. Also, former business models based on the copycat, are no longer sustainable so the focus must be on the solution to satisfy the specific needs of the customers in an innovative way (especially in the segment of mobile internet where China is already holding the role of the global leader). In that path, the startup culture hold a very important position, with the city of Xiamen marked as one of the major hotspots for the entrance of startup companies to the enormous Chinese market, but also as a place for the exchange of ideas and one of the major platforms for the development of Chinese digital companies which has the ambition for global expansion.
The opportunity to enter the Chinese market – but also for Chinese to expand on the global market
The segments which are especially interesting for the Chinese market, which could have been seen by the grouping of the invited startup projects, are AI/IOT/VR/AR, Fintech/Blockchain, Business to Business and Cross Border eCommerce. These are the categories with the most opportunities to enter the Chinese market, but also the areas where the Chinese see the most room for their companies on the global market in the future. Startup project were presented on the stands, presentations and interviews for Technode TV (the official partner of TechCrunch for the Chinese market). Also, speed dates with the investors were organized, in order to enable easier presentation, networking and the exchange of additional informations.
Our main motivation for the participation on the conference was the research of the market and the reaction of the potential Chinese clients on the concept of MemoAngel application. Also, one of the goals was to create contacts and find partners that will help us understand and bypass cultural diversity and open the doors of the Chinese market (which currently has around 1.4 billion people). Even though finding and connecting with the Chinese partner is not a legal and administrative obligation, because of the many specifics it is almost impossible to enter the market otherwise, thus it is highly recommended to create any form of cooperation with local companies.
The specifics of the Chinese market
First of all there is language and writing. The Chinese have every reason to be very proud on their thousands-years old culture and heritage, so, in general, the use of English language in business communication, and especially in everyday life, is not as developed as someone from the western part of the world would expect. In other words you can expect a lot of “technical” obstacles (like signalization in the streets which is exclusively in Chinese, taxi drivers in general don’t speak English so it’s good to have printed addresses an maps of locations in Chinese, etc.). Also, you can expect complications with the usage of mobile phones (based on our experience China Unicom is the only telecom with compatible system) and various web and mobile applications.
You are probably already familiar with Great Firewall of China, the project of the Chinese government, which have been censoring different digital services and contents from the West, protecting the Chinese society from influence from foreign policies, but also Chinese companies from the competition. Google Apps, Facebook, Twitter and Dropbox are some of the services which are partially or completely blocked. The Chinese, of course, have very good substitute apps for all aforementioned, but they are all – in Chinese. One of the few exceptions is WeChat, an excellent communication application (and more) which you simply must use if you want to do business in China (the topic is already well covered on Netokracija).
The most important specific on the business in China is so called Guanxi. In plain words, it is a development of business and private relationship based on common interest and trust, which results in connection through the recommendation of the business partner which in some way guarantees your integrity and quality. Without proper Guanxi, in a large and regulated country such as China, it is extremely difficult to get in contact with the right persons and open the gates for the entrance on the market. Besides, it is useful to master some other details in relation to the business communication and customs, of which you can find out more on this link.
Feiju and Meitu as excellent examples of new China
The conference itself lasted for two days, while on the third day AtWork company (local organizer of the event) organize a visit to Xiamen tech-park to gain even more perspective on the opportunities and specifics of business in China. Amongst other, we have had an opportunity to visit companies Feiju and Meitu.
Feiju is developing web and mobile game applications and is founded by merger of the two most powerful Chinese gaming companies in 2014, which have begun with their work around seven years ago. The business philosophy on the company is summarized in a motto “simple and interesting”. In the middle of 2014, they had around 200 million active registered users. Currently they have around a dozen gaming titles with hits such as Carrot Fantasy, Shenxiandao, Jiongxiyou, Luanshi, Battery Run, etc. The focus of future development of the company are mobile games and the development of additional channels of monetization and promotion through the licensing of the themes and characters from the games in various product categories such as books/picture books, toys, clothing, paper confection and other similar products.
Meitu is a company specialized in the development of photo and video application. In the beginning of 2015 it had over 800 million (!!!) registered users. Their flagship application is called Meitu Pic (Meitu Xiuxiu in Chinese). It is and application for editing and sharing photos which has over 400 million users (mostly of younger female population). Meitu Pic is a simplified version of Photoshop which enable quick and simple embellishment of selfie photos. The secret of this application lies in its possibility to create desired image and instant-beauty in just a few clicks, which is much appreciated amongst Chinese teenagers (who are not very different from their peers in the West).
Meitu began with the distribution of hardware in 2013, MeituKiss Android smartphones, which have built-in high-end cameras adjust for selfie fans and are loaded with various Meitu apps. That way they are expanding their user base, but also use an effective way to protect their core business.
Both companies represent the new China, which is entering the phase of the development of innovative and creative products and services competitive on the global market, in opposition to the era of duplication and adaptation of other solutions and business models for their local market. They are only several years old and are developing in an incredible rate. Their strength is their amazing user base – mostly it is consisted of hundreds of millions of people and billions of downloads of certain apps. They are very successful and highly profitable companies with many young (average age of 24!), and extremely hard-working and competent employees, which are working by western standards, while respecting the specifics of their own culture.
And the Chinese?
For the end – the most pleasant surprise (for someone who had no experience at all in relation to China) are the people themselves. The Chinese are very hospitable, kind and ready to help in every moment. What is even more important, they have highly developed work ethic and are very professional, which is in any case a big plus for anyone planning an entrance to the Chinese market or the start of cooperation with the Chinese companies. In the end, for MemoAngel team, this was an extraordinary experience and we are looking for a quick return back to China.
P.S. I would like to use this opportunity to thank Ivan Livić (who is for many years living in Singapore and has offered us his unselfish support through initial advices and contacts), Damir Firšt (only Croat in Xiamen, who is finishing his doctorate at the local university in Anthropology and has helped us in the conference with his knowledge of the Chinese culture and customs in the communication with the investors, media and visitors of the event) and the whole AtWork team (very professional Chinese organizers who have provided us with maximum support in the business part of the conference, but also through informal socialization during the town visit, in dinners and unforgettable Karaoke party).