Last month, I was delighted to have had the opportunity to participate in a lively panel discussion with tech giants Tao Zhang (Chairman & Co-Founder, Meituan-Dianping) and Hans Tung (Managing Partner, GGV Capital) during CashShield’s very first global networking event. During the panel, we shared our personal experiences and thoughts on expanding into US and China. Special thanks also to Jason Costa (Entrepreneur-in-Residence, GGV Capital) for moderating and keeping the questions tough!
US and China are the two largest markets in the world. Consequently, cracking both markets are full of opportunities as well as adversity. We gathered some tips during the session that we can learn from when expanding cross-borders:
1. Keep sight of China
“Facebook certainly borrows a lot of inspiration from WeChat.” Jason’s remark certainly encapsulates the conversation on why China can no longer be ignored. Previously, China was notorious for its counterfeit products. However, it has now reached a state of innovation and technological development which rivals the US. Keeping eyes strictly on Silicon Valley neglects the fast-growing Chinese tech giants such as Baidu, Alibaba, Tencent. Together with many others, Chinese tech firms are not only dominating the domestic market but also blazing the global trail with innovations, while the rest of the world follows. As China steadily and stealthily transforms itself into one of the top leaders of innovation, it is crucial that we watch them with anticipation.
2. You can only conquer both local and foreign markets with a good understanding of both
One of the biggest challenges to overcome when venturing into foreign markets is understanding the cultural differences of the foreign market from what is familiar. For instance: working with American companies is a completely different experience from working with Chinese companies. Successful expansion into both US and China requires understanding both markets well and tailoring different strategies localized for the market. This is why that continues to be a mean feat achieved only by a few. Case in point: Musical.ly has successful operations in both US and China. This success can be attributed to their strategic choice to head up local teams with someone familiar with the respective markets.
3. Your people are important
A company’s team determines its success. Understanding the market is important (Tip #2), but recruiting a good local team in the foreign market will greatly help. However, the headquarters must trust the local teams to make the best decisions suited for the local landscape. For example: eBay had early entry into China’s market, but the lack of trust between the local team and headquarters led to several mistakes. This caused lost market share while Taobao was quickly gaining traction at the time. In the battle for market share, the scale on success or failure could sometimes be tipped by the people.
Looking forward for more
Cross-border business opportunities offer immense potential for expansion, and we are thankful towards our speakers for these valuable takeaways. CashShield is definitely looking forward to hosting more global networking events!