Internet gives companies a web of possibilities, report Shen Jingting in New Delhi and Chen Limin in Beijing.
Overseas expansion and global-player status may no longer be a pipe dream for China’s Internet companies as several have already taken steps abroad and a small number have tasted a modicum of initial success.
On a sunny day in New Delhi, Duan Wei, a manager at the Chinese mobile browser manufacturer UC Mobile, rose early in preparation for an important conference at one of the city’s most luxurious hotels.
The meeting had been arranged to announce encouraging news: The Beijing-based company was planning to take its most audacious step overseas by setting up an Indian subsidiary in New Delhi.
UC Mobile will invest at least $5 million in India this year, according to CEO Yu Yongfu. The company aims to become the number one player in India’s mobile Internet browser market by 2015, with a user base of 100 million. It currently holds market share of 20 percent in India, second only to Norway’s Opera Software.
The announcement was a reward for Duan and his teammates, who had been working in India for nearly two years. Born in the central province of Hunan in 1984, Duan has had a bittersweet experience in India. He found the country’s working environment harsh because of poor infrastructure and constantly battled feelings of loneliness.
On nights when he was unable to sleep, Duan sought solace in xiangsheng, which translates as cross talk, a popular type of comedic dialogue. He said he listened to the audio downloads so often that he almost became a master of the art form. However, his enthusiasm for his job remains undimmed. “Although life is tough, I am determined to stay, because the time (for UC Mobile’s expansion) is ripe. This is the chance of a lifetime.”
Duan and his team achieved unexpected success over a very short period. They introduced the UC browser to India in 2010 and by the end of last year the number of registered users had risen to 20 million. More than 500 local companies have forged partnerships with UC Mobile, including the media giant Network 18 and the instant messaging provider RockeTalk.
“I would say that the progress UC Mobile has achieved in India is amazing,” said Yu, who was initially encouraged by a number of striking similarities between user behavior in India and China in terms of handset operating systems, applications and networks.
Those similarities prompted Yu to dip a toe into the water. That early foray gradually became a serious business and he decided to set up a subsidiary in the country. “I firmly believe that it’s time for Chinese Internet companies to expand overseas. UC Mobile has demonstrated that Chinese enterprises have the ability to achieve global success, similar to that of giants such as Facebook and Google,” he said.
Competition at home
One of the reasons UC Mobile is pushing to expand overseas is the intense competition in its home market. Last year, the number of registered websites in China declined by 29 percent to 2.3 million from 3.23 million in 2009, according to the China Internet Network Information Center.
Small Internet start-ups are highly vulnerable to the rapidly changing environment in China. Richard Ji, managing director at Morgan Stanley Asia, pointed out that the average life span for Chinese Internet companies is three to five years, much shorter than in many other countries.
One solution to this limited life span is for Internet companies to explore opportunities abroad instead of fighting in the fiercely competitive home market, especially as the country’s Internet giants, such as Tencent and Alibaba, have not yet made major moves overseas, leaving some openings for Chinese start-ups.
UC Mobile also plans to enter the North American market in the first half of this year, by setting up an office in California’s Silicon Valley and launching localized products. However, it’s just one of a number of Chinese Internet companies that have jumped on the bandwagon to snap up business opportunities overseas.
NetQin Mobile, a mobile security company listed on the New York Stock Exchange, said overseas business currently accounts for almost 45 percent of its total revenue. That figure is likely to rise to more than 50 percent by the end of the year, according to Henry Lin, the chairman and CEO.
The US has become the company’s fastest-growing overseas market since it hired its first local employee in 2009. More than 5 million people use its products in the US, ranking NetQin among the top five providers in the market, according to statistics. “We expect to gain the top spot in the US smartphone security market in less than three years,” Lin told China Daily in an exclusive interview in September.
Meanwhile, Hainan Tianya Online Network Tech Co, the operator of one of China’s best-known online forums, Tianya.cn, set up two overseas branches last year, one in Silicon Valley and the other in Singapore, to attract users and advertising clients from Southeast Asia and North America. Twenty percent of Tianya’s traffic originated overseas last year, according to CEO Xing Ming.