How they breached the GREAT FIREWALL OF CHINA
China is often regarded by foreign companies as impregnable. InMobi
has demonstrated that it isn't.
The Indian ad network has become one of the leaders in its space in
China, perhaps the first Indian company to make an impact of that intensity.
The way it has done it, has lessons for all
Naveen Tewari is now a regular invitee to what China calls the
G20, a select group of internet companies that come together to discuss the
future of the internet. He represents InMobi, the Indian mobile ad network that
he co-founded in 2007, at these meetings, sitting alongside the heads of some
of the biggest internet companies in the region, including Tencent, Alibaba,
Baidu, Huawei, and SoftBank.
The G20 is a quasi-government initiative, and InMobi is invited
because it is the second biggest mobile ad network in China; Tencent's WeChat
is the Goliath in the space. InMobi entered China in 2012, and reached the No 2
spot in barely two years. But since WeChat is an app that serves ads within
itself, InMobi is seen as China's biggest independent ad network, one that
serves ads across a multitude of apps.
Tewari says he has never felt in the G20 meetings that China wants
to keep out external folk. “The preconceived notion is China is hard to crack.
But China has evolved a lot since the early days of banning Google. They feel
they have to open up or be left behind. All the big Chinese companies are
coming to India Alibaba, Tencent, Baidu, Xiaomi and they have global
ambitions. They realize it cannot be one-sided ambition,“ he says.
Build
a Chinese mindset
Globally, InMobi has a network that rivals Google and Facebook,
but Tewari describes the company's success in China as unbelievable. “We have
grown ten-fold in China in the last three years. Our popularity in China is ten
times that in India. All big customers there know what InMobi does. And it
shows the openness of China,“ he says.
Tewari and others in the InMobi leadership are convinced other
Indian companies can be similarly successful, but they note that it has to be
tackled differently from many other parts of the world.
The most important element is to acquire a Chinese mindset. It's a
very different culture and we just don't know the language, says Abhay Singhal,
InMobi co-founder and chief revenue officer. He remembers the first time he
landed in China. “Nothing that I was used to could be accessed in China no
Gmail, no Hotmail, no Yahoo, no Google; most of the familiar apps don't work.
Customers would invariably ask for my QQ number, which was the biggest
messaging service (now it's called WeChat). They don't work with email, or
phone numbers,“ he says.
The Chinese are hierarchical. The boss is God. So communications
have to be top-down.
The whole system is extremely aggressive and everything moves
fast. Indian systems and processes cannot handle that. “The sales folk are so
aggressive that in China we give commissions for every transaction, not
periodic bonuses as elsewhere,“ Tewari says.
Singhal notes that Chinese work at least one-and-a-half times more
than Indians.“China knows that the only way to succeed is to move fast. So you
have to multiply all your definitions of scale by 10x in China,“ he says.
Singhal is clear: Never send Indians to build your business in
China. I have seen IT services companies trying to do that. The business has to
be built by the Chinese. And trust the local person to take the right decisions.
For the launch of its latest product Miip in China earlier this
week, all invites went out on WeChat. At the event, Tewari spoke his entire
seven minutes in Mandarin, something that the company put a lot of effort into.
And unlike in the Miip launches in the US and India, where Tewari hogged the
show, in China, most of the time was given to Jessie Yang, head of China
operations, and Bill Qiu, head of business development & publisher
relations.
Leader
must be global-local
Given the need to localize, the leaders you choose for your
Chinese ops have, obviously, to be Chinese. It must also be global quality
talent, says Tewari. Yang has an MBA degree from MIT and has worked at several
global companies, including McKinsey . Qiu studied at MIT, and worked at McKinsey
and Baidu.
“There are lots of such talent. They are expensive, but extremely
ethical, aware of Western ways of working, and have good control over the
English language,“ says Singhal.
Yang says she lived in the US for ten years, so she has a global
view. “But that's not good enough. You have to also know the local market
really, really well. China is the most dynamic mobile market in the world.
Alibaba and Tencent are among the world's biggest internet companies, so
there's huge local competition. This means we have to move very fast, adapt,“
she says.
Create
for China
Mobile is by far the most dominant screen in China, which is the
world's biggest and most dynamic mobile market. No wonder the product you
deploy in China has to be hugely customized. Piyush Shah, InMobi's chief
product officer, says initially the company would launch products and services
for the English-speaking audience, and then take it to China. “But we realized
quickly that doesn't work. The Chinese appetite for trying out new things is
very high. So we started launching new products and services in China at the
same time as we did globally, and in some cases, like with our native ad
service, we launched first in China,“ he says.
The payment infrastructure in China is dominated by mobile wallets
like Alipay and WePay. So partnering with wallet players is critical for
commerce. For tracking and analytics in the domestic market, Chinese
advertisers are most comfortable with local players.So again, InMobi had to
identify the best of these local analytics players, and build deep technical
partnerships with each of them, allowing them to extend their targeting and
optimization capabilities to advertisers working with them.
“Our product and technology has always been ahead of competitors.
Every quarter we bring a new product,“ says Yang, explaining why InMobi has
been the most successful international internet company in China.
JV
not a good idea
The company says you should avoid a joint venture if you can. In
some areas like media, communication, messaging, and money transactions, the
country will not allow an independent business, and you will necessarily have
to do a joint venture. But in all other areas, it is feasible. “It becomes easier
to execute if you are independent. Few JVs have been successful in China,“ says
Tewari.
But you will require a license if you plan to go as an independent
company. “This delayed our entry by 5-6 months, made it a little uncertain. But
eventually, you are masters of your own destiny,“ Singhal says.
No
government interference
The common perception is that the Chinese government is like a big
brother constantly watching over you. Tewari says nothing can be farther from
the truth. “We have never met government officials, except at the time we
needed a license to set up the company,“ he says. He goes on to note that
India-China collaboration is a big new trend. “It's a new world order. We are
similar countries, hungry, aggressive, mobilefirst. So China is a land of huge
opportunities for Indians,“ he says.
|
Sujit
John
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TOI21AUG15
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