Here we share the second episode of Chinaccelerator MD William Bao Bean’s podcast with Adam Bao, founder of the emerging technology media The Harbinger, where William pointed out:
I think it is like the next World War. It’s not going to be fought with the tanks and bullets and guns, but between global companies.
Check out the first episode here
Commerce, Payments, Facebook
Q1: Given that in China you have this ability to buy stuff so easily on your phone, can you talk about how that might impact the overall commerce – the immersive commerce, the social commerce – space, and could you compare that to the U.S. For example, where you don’t really have payments linked on everyone’s mobile phones?
But it’s all advertising based and if you think about basic economics, advertising drives behavior. And usually people want to drive purchasing behavior so advertising revenue is actually a subset of the actual commerce revenues. Advertising drives game revenue; advertising drives commerce revenue.
Cash is already pretty much dead in China, CNBC
So we will see an interesting battle played out in other countries like India, where Facebook and WhatsApp are strong and where Chinese players have backed local commerce companies and local payment companies. So it’ll be the Indians backed by the Chinese against U.S. heavyweights like Facebook and Amazon. And that’ll be interesting to see how things play out, especially in comparison to China, because the Chinese retail industry is under a huge amount of pressure since people don’t carry wallets or buy offline anymore.
Q2: Given that Facebook is entering new markets like India, and with the other Chinese-backed providers which have payments attached to the virtual and social experiences, how do you think Facebook might localize their products or customize in those particular markets in terms of payments?
Chinaccelerator and MOX, at the Crux of Cross-Border Opportunities
Q3: Let’s talk more about Chinaccelerator. For both Chinaccelerator and MOX, you have an emphasis on cross border entrepreneurship. Can you speak to that?
However, there are awesome entrepreneurs making really cool stuff in other countries. Unfortunately, their home markets are not large enough to support a global minded business interesting enough to secure VC funding.
We believe that startups are about solving problems. As early stage startup investors, through SOSV and 7 accelerators, we are vertically focused to better solve problems for those startups. And the problem that we are solving is helping companies go global – maybe not from day 1 but to year 1. They get product market fit, users, revenue and people that love them in one country, and our role is to take them cross border.
MOX Friday Happy Hour
This is where the future is. There are a billion users on mobile and the next billion users will be in these markets. We call this the last 4 billion. That’s where we see the opportunity over the next 20 years: getting these users who don’t make 10 or 15 thousand dollars a year. They’re closer to the 5-to-8-thousand range. But the this is where the growth is. They have different needs and requirements than an American user or a Chinese user, and that’s the focus for MOX.
From: We are Social & Hootsuite
Q4: Back in the day, a lot of the companies, especially tech giants, try to enter China. Obviously they’ve encountered many difficulties. Google was operating in China before being shut down, and a lot of social networks cannot enter China. Companies like Uber, Groupon, eBay did have some level of success but ultimately acquiesced to local competitors. So can you speak to experiences some of your early stage companies going from abroad entering China?
This is only moderately successful for LinkedIn because business social networks are perhaps not really appropriate for China. I invested into startups trying to solve the same problem before LinkedIn came to China. They both failed.
LinedIn中国 （Earliest Version 最早版本，2014）
In other words, we take the special sauce, the unfair advantage that this company might have internationally, and apply it to a specifically Chinese problem. The problem that 99% of the companies around the world are trying to solve is not necessarily a Chinese problem. But first you need to have a Chinese problem, and then an international solution that can be applied to it.
We also look at cross border commerce, where international brands might not be as trusting as a Chinese partner, so cross border companies with local roots but an international point of view can have an unfair advantage.
We focus on the health industry, including food and nutrition, which has gained increasing attention. 90% of the water in China is polluted, so where’s your food coming from? – we can play upon this. It’s been it’s been a fun, wild ride.
Q5: We’ve talked about going from abroad to China, and now let’s also talk a little more about China going to other markets, because it’s increasingly the case that Chinese companies are developing core abilities and innovative business models you don’t see in other countries. So can you talk a bit more about what’s happening in that direction?
A Chinese product might not necessarily solve an American problem. China is largest mobile first mobile only market in the world, so the user requirements and experience users expect are different. These companies are not necessarily going to the U.S. or Western Europe first, but have gone into the other mobile first mobile only markets, where the user requirement is a bit more similar to China. Also there’s a lot less competition and the capital that the Chinese startups in the Chinese companies can bring to bear can be put to use.
Chinese advertising in India
Q6: For folks in the U.S., you know we don’t hear too much about Chinese companies entering and selling their products there. For example, Xiaomi is doing very well in China and in India in particular as a global market, but hasn’t quite entered the U. S. just yet. Can you tell us a bit more about some of these are more established Chinese technology companies, and how they might enter the US market eventually?
It’s going to be very interesting to watch. I think there will be a lot of carnage. The international companies like Amazon, Facebook, and Google are struggling in the emerging markets. Amazon is trying to reenter India right now.
Xiaomi’s CEO talked with the President of India
In India you can, and we’ve been pretty successful doing that in southeast Asian and India. The marketing techniques and products layout that works in China tends to work in Southeast Asia as well. In the U.S., you have to localize, which is not happening right now.
Who’s going to do it first? Hardware, obviously. A drone is a drone. China is very strong in consumer apps, and some of the consumer apps are starting to creep into the U.S., but they’re very good at disguising themselves. You don’t recognize that the apps on your phone are Chinese. It’s not just cool karaoke video apps like Musical.ly, but also a lot of the utilities such as Meitu. You will see a lot of those consumer apps come in, but you are not going to know that their Chinese.
Thanks to the Harbinger.