The startup journal II – Foreign copycats can’t satisfy Chinese consumers

To feel the heat of the IT scene in Beijing, you need to go to some of the conferences and forums taking place around town. Sometimes there are just too many of them and they’re not always good.

Last week my colleague and I went to different conferences and our experiences were quite different. Hers was good. Mine was only so-so.

I went to a meeting about Slush, northern Europe’s largest startup forum. Founded in 2008, the organization said it has attracted more than 15,000 entrepreneurs, mostly from Europe and Asia, to participate in their annual meeting.

This year Slush opened its branch in China and organized a smaller-scale conference in Beijing in October. According to them, 1,500 entrepreneurs attended it. When asked why Slush wants to be in China, one organizer only commented that the Chinese market is too big to miss.

It not a right or a wrong answer, but simply shallow, showing that the person didn’t know very much about China’s IT industry.

In reality, Slush Helsinki is known for Slush 100, a startup pitch competition for a seed fund of 500,000 euros. Slush China had a similar pitch competition with a chance to compete in Slush 100 in Helsinki as a reward. Slush 100 holds three rounds to choose a winner out of 100 startups. In contrast, about 350 entrepreneurs took part in Slush China last week.

Imagining 350 talking heads at a two-day event – how fast and how well they must speak to clearly communicate their ideas and win over the audience. What Slush should do in order to succeed in China is to introduce high-quality programs to Chinese entrepreneurs and show them something they don’t know.

The Chinese IT market does not lack funding. Data showed that during the first half of 2015, at Beijing’s Zhongguancun hub, where thousands of startups are located, one startup landed RMB five million (USD 780,000) every day on average. But with the right kind of inspiration, startups can incorporate new ideas to push their business to the next level.

daydayup office space-1
DayDayUp co-working space. By Catherine Lai.

When I talked to Bo Yiqun, founder of DayDayUp, a startup building a community of entrepreneurs and providing office rentals, he said that many Beijing startups have copycatted the same foreign incubator model. But he is passionate about building a community that fits well in China. That’s why he invested heavily to build a real international office space with purified air “as clean as in the Silicon Valley”. His team is also organizing a series of events for startup entrepreneurs.

As many foreign companies enter China for its enormous market scale and inexhaustible flow of money, they rely heavily on their successful experience at home. But China is such a complicated market and Chinese consumers are maturing each day with particular, individual demands – “foreign copycats” will hardly survive.

That’s why even though Weibo initially took its inspiration from Twitter, it soon moved beyond “retweet” and “like”. Now it has social network functions allowing users to build their own community of friends and even to do Internet banking. Twitter hasn’t changed much since it was founded in 2006. It only lifted the 140-character limit for direct messaging this August. The limit still applies to public tweets despite demands for diversity. Weibo has attracted about 200 million monthly active users (MAU) in China, while Twitter has about 300 million MAU worldwide.

China’s largest social network Wechat claims to have more than 500 million MAU and has far more complicated functions than its original model, Whatsapp. Today’s Wechat is a combination of Facebook, Skype and Whatsapp. The convenience it provides goes beyond most people’s imagination.

I. It’s a mobile business card. You can get hold of everyone, no matter if they’re a startup CEO or an apartment rental agent.
II. It’s a real-time multimedia sharing tool. Many times, I’ve been invited to live press conference broadcasts such as the launch of a wearable bracelet in Hangzhou or a smartphone release in Beijing.
III. It’s the cheapest and best communication platform. If you have wifi, you can leave voice messages and make voice or video calls for free.
IV. It’s wildly entertaining. Animated emoji stickers make you laugh out loud and the “Lucky Money” feature can win you some cash from friends on a bet or a favor.
V. It’s life saving. If you’re lost, your date can share a real-time map with you. Or you can use Wechat’s payment service if you forget your wallet. I just bought a dozen eggs with the feature on Sunday.

I’m not writing an advertisement for Weibo and Wechat or bragging about how good they are. I just want to make the point that Chinese consumer habits and the Chinese IT scene are far more complicated than you think. So much so that foreign copycats cannot win our hearts anymore.

If you want to win in China, first understand what Chinese people like. We are very particular – just like how often we’ll choose Peking duck and “Erguotou” for dinner over foie gras and champagne.

Go figure!

(Top photo from DayDayUp)

Read the previous piece: The startup journal I. — From journalist to business co-founder

Wu Nan
Wu Nan

Nan is the Founder and Editor in Chief of AllTechAsia. She is an award-winning journalist with honors from Foreign Press Association in New York and Hong Kong Journalists Association. For years she worked for top-notch media outlets including South China Morning Post and the Wall Street Journal. She co-founded the NetEase Annual Economist Conference (NAEC), a leading economic forum in China. She holds a master's degree in Journalism at U.C. Berkeley and is a 2012 Nieman Fellow at Harvard University. Write to her: nan[at]alltechasia.com

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