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Overseas ventures reap dividends

2017-December-7       Source: Chinadaily.com.cn

Overseas expansion seems to be the new buzzword for Chinese internet startups as the industry looks to reap the rewards of the rapid development in the last two decades. The huge market potential also saw the emergence of Chinese internet behemoths like Baidu Inc, Alibaba Group Holding Ltd and Tencent Holdings Ltd.

Local residents ride Mobike Technology Co's shared bikes in Berlin, Germany. Bike-sharing titan Mobike announced on Nov 22 that it has launched services in Berlin, meeting its goal of expanding to 200 cities globally by the end of this year. [Photo/Xinhua]

Overseas expansion seems to be the new buzzword for Chinese internet startups as the industry looks to reap the rewards of the rapid development in the last two decades. The huge market potential also saw the emergence of Chinese internet behemoths like Baidu Inc, Alibaba Group Holding Ltd and Tencent Holdings Ltd.

Unlike the internet giants which are focused on the domestic market, startups are looking to overseas expansion. These include bike-sharing platforms like Mobike Technology Co and Ofo Inc, tool and photography app developer Meitu Inc and live-streaming platform Yixia Tech.

What is of interest, though is that most of the founders of these firms are from the post-80s and post-90s generation, who are more clued on to the global markets.

Song Yuheng, an analyst at internet startup service provider 36Kr said in a report: "China is now at the forefront of mobile internet development, which is fast emerging as a driver of economic growth."

International expansion has become a critical component in the growth strategy for Chinese internet entrepreneurs, as well as a golden opportunity to export industries with competitive advantages to foreign countries, the report said.

Bike-sharing startup Mobike is a typical example. Currently, its orange-hued dockless bikes can be found in 200 global cities, with the company owning 7 million bikes, as well as having over 200 million registered users, according to the company.

Li Yuxian, vice-president of Mobike said the company aims to operate in more cities around the world by the end of the year.

Apart from China, the firm's cycles can be found in Singapore, Malaysia, Thailand, South Korea, Japan, England, Italy and the United States. Last month, it announced its operations in Berlin, Germany.

For now, even profit has been put on hold as the company continues its global push.

"If we want to make money, we can, but making money is not our top priority," said Hu Weiwei, co-founder and president of Mobike. "Profit is not the most important goal for us at the moment. We are focused on market expansion," she said.

Prior to entering a new city, Mobike said it will first conduct a detailed survey of the urban environment and communicate with the local government and transportation management departments to create a development plan.

The reason for its internationalization strategy is obvious. By July, major Chinese cities had reached a saturation point. There were up to 70 bike-sharing brands with 16 million cycles on the roads for a customer base of about 130 million, according to data from the Ministry of Transport.

Mobike's rival Ofo has also accelerated its expansion in overseas markets. It has more than 10 million bikes in 13 countries and in September officially launched services in the Czech Republic, Italy, Russia and the Netherlands.

Founded in 2014, the Beijing-based company is valued at more than $2 billion after raising $700 million in its latest round of financing in July.

The company aims to roll out 20 million bikes in 200 cities across the world by the end of the year after moving into markets in the United States, the United Kingdom, Singapore, Kazakhstan, Thailand, Malaysia, Japan and Austria.

"Our platform was created with the ambition of improving the environment globally by introducing low-carbon transportation to urban dwellers," said Dai Wei, founder and CEO of Ofo.

Statistics from Beijing-based market consultancy iResearch showed that Chinese internet companies have expanded their presence in Japan, South Korea, Europe, the United States, Southeast Asia, Latin America, Middle East and North Africa. The number of these enterprises has surpassed 6,000, with over 10,000 products in overseas markets.

As a global mobile internet platform and innovator in mobile video and photography, Meitu's apps are used by more than 450 million monthly active users worldwide, generating more than 6 billion photos and videos each month. The company's internationalization has highlighted the huge market potential for Chinese mobile apps outside the country.

Its photo and video editing apps use patented facial recognition and machine learning algorithms to map each user's facial features, offering a precise and natural virtual makeup application and retouching for each user's unique skin tone and facial structure.

Established in 2008, the Xiamen-based company made its debut on the Hong Kong bourse last December. Currently, it has expanded into 26 countries and has more than 10 million active users in countries like India, Indonesia, Japan, Malaysia and Thailand.

The company is also stepping up efforts to gain more overseas users, said its chairman Cai Wensheng, adding the expansion will entail opening new offices, possibly in Europe, and offering localized versions of its products.

"It is the best time for online video and entertainment industry to go global as the contents are interlinked," said Han Kun, CEO of Yixia Tech, the provider of the live streaming application Yizhibo.

Editor: Jasmine

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